Business Ethics & Society DSST Exam Full Review Q&A

Business Ethics & Society DSST Exam Full Review Q&A Deontology - ANS-Strict adherence to rules regardless of consequences, moral duty moral absolutism - ANS-same standards apply regardless of situation or the culture virtue ethics - ANS-not a person's actions, but his character determines morality ethical behavior - ANS-acting consistent with business' moral principles/values Major ethical problems in business - ANS-lack of integrity, organization relational problems, misleading advertising Ethical code of conduct - ANS-guidelines on how EEs act at work Ethics - ANS-beliefs about right and wrong in workplace characterized by social expectations of people's moral actions, different than law b/c ethics has multiple outcomes and alternatives while the law is either legal or illegal Laws - ANS-rules of behavior sanctioned by government for workplace, 4 elements: universal, published, accepted, enforced, define boundaries of what is legal and written guidelines Fraud - ANS-company hides truth from public knowledge. Other unfair business practices include insider trading and bribery. Bhopal Disaster - ANS-leak led to cloud of poison gas, Union Carbide Co. Utilitarianism & John Stuart Mill - ANS-ethical if it results in greatest amount of happiness, # of people helped vs. harmed, degree of benefit vs. degree of harm, rule or act Ethical Nihilism - ANS-acts are neither intrinsically moral or immoral Jeremy Bentham - ANS-people act according to self-interest Social contract of business - ANS-businesses have special responsibilities to society including philanthropy (giving money) and social responsibility CSR - ANS-use business resources to solve social problems and achieve goals, acting as trustees to protect stakeholders, balancing stakeholder needs Service principle - ANS-service society through creation of profitable business CSR levels - ANS-1. Economic: fulfill needs with G or S 2. Legal 3. Ethical 4. Philanthropic Sustainability - ANS-creating a G or S to fulfill a need, they will then profit Stakeholder Theory - ANS-Central focus of CSR is giving attention to every stakeholder Arguments against CSR - ANS-main purpose is to make $, companies exist to make G or S and don't have knowledge to actual help society, less competitive globally b/c extra expense Arguments for CSR - ANS-right to do, government intervention decreases, success Corporate citizenship - ANS-balance stakeholder need & protecting envirionment, bene: good EE relations, improved customer relations, enhanced marketing Corp Citizenship Stages - ANS-1. Elementary: comply with legal regulations, building profits, jobs, pay taxes 2. Engaged: w/ community stakeholders, philanthropy 3. Innovative: stakeholder management, bus. development while organizing crossfunctional teams 4. Integrated: proactive partnerships with all stakeholders 5. Transforming: MKT creator, transparent with all issues. Corporate Social Performance Model - ANS-1. Social responsibility categories: economic, legal, ethical, philanthropic 2. Mode of social responsiveness: reactionary, accommodating, defensive 3. Social issues of stakeholders: product safety, discrimination, occupational safety, environment Global responsibility - ANS-Environmental & Social. Climate change, green trade practices, sweatshops, social pressure drive this. Environmental movement, internet, and grassroot campaigns have made this a big deal, also is free marketing. Customers are likely to pay for goods of globally responsible companies. Bottom of Pyramid - ANS-poorest but largest group within capitalism, global rising class, ethics in this? possible short sighted sales techniques, ex: China Mo Ibrahim - ANS-made billions building cell network in Africa, an African telecom mogul B Corporation - ANS-Do good for society, receives goodwill form community, shareholders can sue company for proof of performance, secretary of state receives proof, founders of company set this up not current owners, do NOT have to file public paperwork Sherman Act - ANS-1890, fair competition, monopolies are illegal Robinson-Patman Act - ANS-1936, illegal to offer different price to different buyers of same good Federal Trade Commission - ANS-1914, regulates competitive environment, government has more power to approve corporate mergers and maintain competitive business balance, deals with false advertising, notice of collection of personal information, choice of sharing information (opting out option), security of information enforcement, investigate unethical business practices, violations of antitrust statutes, recommend new legislation to protect act, holds trials to handle disputes Consumer Product Safety Commission - ANS-CPSC, safety standards for products, product recalls FDA - ANS-regulations about distribution and selling hazardous foods/drugs Business ethics - ANS-determine everyday conduct Morals - ANS-rules developed from cultural norms/values Lawrence Kholberg - ANS-ethical development, Pre-conventional (self-centered, rewards and punishment), conventional (societal rules/expectations, social acceptance), post-conventional (universal moral principles, internal moral path) Ethical target market - ANS-analyze consumers to see predisposed ways (preferences, cultural norms, habitual purchasing), unethical to target easily manipulated consumers. It's ethical to persuade, inform, ask, & advise. Vulnerable population - ANS-Psychological or lack of maturity, children Deceptive advertising - ANS-ambiguity, weasel words, puffery, hiding facts Controversial advertising - ANS-shockery to gain consumer attention, scare tactic Cause related marketing - ANS-team marketing efforts for-profit and non-profit business, creates public relations & happy customers, can cause consumer burnout from constant donation requests Persuasive messages - ANS-to change individual intentions, actions, beliefs, ensure legally & ethically sound by FTC legal communications - ANS-EE have understanding to not violate ethics, standards, laws pertaining to business communications (disclaimers, disclosures, marketing communications, reporting of finances, internal communications) Disclaimer - ANS-written documents to prevent harmful litigation Disclosure - ANS-honest with practices, deals with conflicts of interest, revealing business proprietary rel., research claims Marketing comunicaitons - ANS-product claims must be fact based Internal communicaitons - ANS-with state agencies, outside stakeholders & EEs Ethical communications - ANS-goals, means, outcomes, a pillar of how businesses maintain integrity, truthful & accurate & respectful actions Financial privacy proteciton - ANS-held by financial institutions, laws to protect consumer information Gramm-Leach-Bliley Act - ANS-GLBA, 1999, information securely stored, consumers well-informed on use of their information, allowed to opt-out of certain information sharing, applies to all financial institutions, only non-public personal information, NOT info from commercial activity/business transactions (limits info not publicly available like list of credit card customers) Three Elements of GLBA - ANS-1. Financial privacy rule: privacy notices, opt-out right 2. Safeguards rule: security plan, physical & technical safety 3. Pretexting provision: individuals & companies can NOT obtain customer information from financial institutions under false pretenses - ANSConsumer protection - ANS-laws & regs to protect consumer rights, FTC protects by enforcing product safety, distributing consumer related information, preventing deceptive MKT Product Liability - ANS-three types are design flaws, manufacturing defects, failure to warn consumers of danger Strict Liability - ANS-liable if defective product causes injury, regardless of fault 6 Governmental Regulatory Agencies - ANS-CPSC, FTC, EPA, SEC, CFPB, NHTSA Consumer Financial Protection Bureau - ANS-CFPB, ensures information shared for consumers to make best credit card, loan, and mortgage decisions (financial services) Consumer protection safety commission - ANS-CPSC, 1972, evaluates products, makes standards, conduct research, recalls Continues...