Chapter 4

• Ethics - code of moral principles and values that govern the behaviors of a person or group with respect to what is right or wrong
• Codified law - values and standards written into the legal system and enforceable in the courts
• Free choice - behavior not covered by law and for which an individual has complete freedom
• Three Domains of Human Action

  1. Domain of Codified Law (Legal Standard)
  2. Domain of Ethics (Social Standard)
  3. Domain of Free Choice (Personal Standard)
• Ethical dilemma - situation concerning right or wrong when values are in conflict
• Utilitarian Approach - moral behavior produces the greatest good for the greatest number
• Individualism approach - acts are moral if they promote the individual's best long-term interests
• Moral-rights approach - humans have fundamental rights and liberties that cannot be taken away by an individual's decision
• Justice approach - moral decisions must be based on standards of equity, fairness, and impartiality
• Distributive justice - different treatment of people cannot be based on arbitrary characteristics

  Procedural justice - rules must be administered fairly

  Compensatory justice - individuals should be compensated for the cost of their injuries by the party responsible
• Practical approach - bases decisions on prevailing standards, society, and all stakeholders
• CSR - management's obligation to make choices and take actions that will contribute to the welfare and interests of society, not just the organization
• Stakeholder - any person or group within or outside the organization that has an investment or interest in the organization's performance
• Stakeholder mapping - a systematic way to identify the expectations, needs, importance and power of stakeholders
• Greenwashing - company tries to portray itself as more environmentally minded than it actually is
• Sustainability - ability to generate wealth with environmental responsibility and social stewardship
• Triple bottom line - measurement of an organization's social, environmental, and financial performance
• Three P's - people, planet, and profit
• Benefit corporation - a for-profit organization
• Ethical leadership - managers are models of honesty and trustworthiness
• Volunteerism - actively giving time and skills to a volunteer or charitable organization
• Code of ethics - formal statement of a company's values concerning ethics and social issues
• Ethics committee - group of executives appointed to oversee the organization's ethics by ruling on questionable issues and disciplining violators
• Chief ethic officer - company executive who oversees all aspects of ethics and legal compliance
• Whistle-blowing - employee disclosure of illegal, unethical, or illegitimate practices on the employer's part