Ethics and Corporate Social Responsibility

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Questions and Answers

What are ethics?

Standards of moral behavior that are accepted by society as right versus wrong.

What are compliance-based ethics codes?

Ethical standards that emphasize preventing unlawful behavior by increasing control and penalizing wrongdoers.

What are integrity-based ethics codes?

Ethical standards that define the organization's guiding values and support ethically sound behavior.

Who are whistleblowers?

Insiders who report illegal or unethical behavior. Signup and view all the answers

What is corporate social responsibility (CSR)?

A business's concern for the welfare of society. Signup and view all the answers

What is corporate philanthropy?

The dimension of social responsibility that includes charitable donations. Signup and view all the answers

What are corporate social initiatives?

Enhanced forms of corporate philanthropy directly related to the company's competencies. Signup and view all the answers

What is corporate responsibility?

The dimension of social responsibility that includes everything from hiring minority workers to making safe products. Signup and view all the answers

What is corporate policy?

The dimension of social responsibility that refers to the position a firm takes on social and political issues. Signup and view all the answers

What is insider trading?

An unethical activity in which insiders use private company information to further their own fortunes. Signup and view all the answers

What is a social audit?

A systematic evaluation of an organization's progress toward implementing socially responsible and responsive programs. Signup and view all the answers

How is legality different from ethics?

Ethics goes beyond obeying laws to include abiding by moral standards accepted by society. Signup and view all the answers

How can we tell if our business decisions are ethical?

By asking three questions: (1) Is it legal? (2) Is it balanced? (3) How will it make me feel? Signup and view all the answers

What is management's role in setting ethical standards?

Managers set formal ethical standards and lead by example through their actions. Signup and view all the answers

What's the difference between compliance-based and integrity-based ethics codes?

Compliance-based codes focus on avoiding legal punishment, while integrity-based codes define guiding values and promote shared accountability. Signup and view all the answers

What is corporate social responsibility?

The concern businesses have for society. Signup and view all the answers

How do businesses demonstrate corporate responsibility toward stakeholders?

By satisfying customers, making money for investors, creating jobs, and promoting social justice. Signup and view all the answers

How are a company's social responsibility efforts measured?

Through a corporate social audit that evaluates progress toward social responsibility. Signup and view all the answers

How can U.S. companies influence ethical behavior and social responsibility in global markets?

By demanding socially responsible behavior from international suppliers. Signup and view all the answers

Executives at Enron and Tyco were found guilty of ____ behavior that damaged their companies' reputations.

unlawful Signup and view all the answers

Study Notes

Ethics and Standards

Ethics refers to societal moral behavior standards that distinguish right from wrong.
Compliance-based ethics codes focus on preventing illegal actions through control and penalties.
Integrity-based ethics codes promote organizational values and a shared accountability among employees.

Whistleblowers and Responsibilities

Whistleblowers are insiders who report unethical or illegal activities within an organization.
Corporate social responsibility (CSR) represents a business's commitment to societal welfare and ethical practices.

Corporate philanthropy involves charitable contributions as part of social responsibility.
Corporate social initiatives relate directly to a company's core competencies and philanthropic efforts.
Corporate responsibility encompasses various practices, including hiring diversity and ensuring product safety.
Corporate policy reflects a firm’s stance on social and political issues affecting its operations.

Ethical Practices in Business

Insider trading is the unethical use of confidential information for personal benefit.
A social audit evaluates an organization's progress towards social responsibility initiatives.
Ethics surpass legal compliance, involving moral standards and relationships among individuals.

Evaluating Business Decisions

An ethical check for business decisions includes legal considerations, balance, and personal feelings about the decisions.

Management and Ethical Standards

Management's role in setting ethical standards is crucial; actions often speak louder than formal guidelines.
Tolerance or intolerance toward ethical misconduct by management heavily influences employee behavior.

Corporate Responsibility and Stakeholders

Businesses show responsibility to stakeholders by providing valuable products, profitability, job creation, and contributing positively to society.

Corporate social audits measure the effectiveness of a company’s social responsibility efforts and the overall net benefit to society through positive and negative impacts.

Global Influence and Standards

U.S. companies often require international suppliers to adhere to human rights and environmental standards, refusing to partner with non-compliant vendors.

Case Studies in Corporate Ethics

Executives at Enron and Tyco were found guilty of unlawful behaviors that tarnished their companies' reputations.

Financial Crisis and Accountability

Ethical failures in financial practices, exemplified by mortgage bankers and real estate entities, contributed to the financial crisis of 2008, demonstrating the importance of ethics in business.

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Description

This quiz covers essential concepts of ethics, including compliance-based and integrity-based codes, as well as the role of whistleblowers. It explores the aspects of corporate social responsibility, such as philanthropy, initiatives, and hiring practices. Test your knowledge on ethical standards and societal responsibilities in organizations.