Ch 5

A set of moral principles or core values for deciding right vs. wrong.

They both have an overarching notion of justice, and the law strives to encode justice in business.

Consciousness of what is right/wrong in the workplace and commitment to ethical business operations.

Business owners, investors, employees, customers, suppliers, etc.

Primary stakeholders feel a direct impact from business decisions (e.g., customers, employees), while secondary stakeholders are indirectly affected (e.g., government agencies, media).

The bare minimum standard of ethical behavior—avoids harm as long as the business remains profitable.

Striving to make as much money as possible without breaking any laws.

Focuses on universal moral principles, religion, virtue, and natural law.

Utilitarianism—decisions based on outcomes that maximize overall happiness.

People negotiate ethical principles behind a "veil of ignorance" to ensure fairness.

Morals are external (socially accepted standards), while ethics are internal (personal or professional principles).

Prioritizing moral values in an organization to align employee and manager behavior.

A question to determine if a business is acting ethically.

Ethics can't be managed or taught—people develop them based on personal values (e.g., influenced by religion).

1. Articulating a clear vision of ethics at all levels. 2. Rewarding ethical behavior through policies and incentives. 3. Enforcing ethics individually.

1. Identify ethical values required by law. 2. Identify ethics relevant to specific positions. 3. Consider employee values. 4. Identify values important to stakeholders.

Google chose not to provide AI for the U.S. Department of Defense, reflecting an internal ethical struggle between shareholders and employees.

To ensure businesses operate responsibly by considering the impact of their actions on stakeholders and society.

Laws establish a minimum standard for ethical behavior, but true business ethics go beyond legal compliance.

Individuals or entities that own shares in a company and have a financial interest in its success.

Shareholders own part of the company, while stakeholders include anyone affected by the company’s decisions.

A thought experiment where people design fair ethical principles without knowing their own social status, ensuring impartiality.

Even though they are indirectly affected, secondary stakeholders (e.g., government, media) can influence public perception and regulations.

Decisions should be made to create the greatest overall benefit, even if it means sacrificing individual interests.

Fundamental ethical rules, such as honesty and fairness, that apply across cultures and societies.

It ensures consistency in decision-making and helps create an ethical workplace culture.

Businesses may avoid ethical responsibility by doing the bare minimum, which can lead to reputational damage or legal issues.

By providing ethics training, enforcing policies, and rewarding ethical decision-making.

A company choosing between maximizing profits and ensuring fair wages for employees.

They can lead to legal consequences, loss of consumer trust, and damage to brand reputation.

Leaders set the ethical tone of a company and influence employees through their actions and decisions.

Ethical decisions are influenced by social, economic, and cultural factors, making context essential.

A business’s commitment to contributing positively to society beyond profit-making, such as environmental sustainability and fair labor practices.

They build trust with consumers, attract loyal customers, and avoid legal fines or scandals that could hurt profits.

A situation where personal interests interfere with professional responsibilities, leading to biased decision-making.

It argues that businesses should act in their own self-interest, but in a way that aligns with long-term success and reputation.

The act of exposing unethical or illegal behavior within an organization to authorities or the public.

It builds trust with stakeholders by ensuring honesty in financial reporting, decision-making, and corporate practices.

They establish clear policies, enforce consequences, and provide training to prevent unethical behavior.

Ensuring truthful advertising, avoiding manipulation, and respecting consumer rights.

To prevent exploitation, ensure fair labor practices, and avoid sourcing materials unethically (e.g., child labor, environmental harm).

Companies must navigate different cultural standards, labor laws, and ethical expectations across countries.

When a company falsely promotes itself as environmentally friendly to attract customers without making real sustainability efforts.

By integrating ethical considerations into decision-making rather than prioritizing short-term financial gains.

The belief that ethical standards vary across cultures and should be judged within their cultural context rather than by universal principles.

A legal and ethical obligation for executives and board members to act in the best financial interest of shareholders.

Ethical businesses ensure product safety, fair pricing, and honest advertising to protect consumer interests.