Chapter 2- Business Ethics

Building relationships- strong relationships associated with organizational sucess

Helps identify internal and external stakeholders

helps monitor and respond to needs, values, and expectations of stakeholder groups

The formal system of accountabilty and control of ethical and socially responsible behavior

Those who have a stake or claim in some aspect of a company's products, operations, markets, industry, and outcomes

customers, employees, government agencies, investors, suppliers, communities

Those whose continued association is necessary for a frim's survival

employees, customers, investors, goverment, and communities

Are not essential to a company's survivl

media, trade associations, and special interest groups

The degree to which a firm understands and adress stakeholder demands

1. generation of data about stakeholder groups
2. distributiion of the information throughout the firm
3. Organization's reponsiveness to this intelligence

An organization's obligation to mazimize positive impacet on stakeholders and to minimize its negative impact

4 levels of social responsiblity

1. ecenomic- maximizing stakeholdre wealth/ and or value
2. legal- abiding by all laws and goverment regulations
3. Ethical- following standards of ethical behavior as judged by stakeholders
4. Philanthropic- giving back to society

The extent to which business stragically meet their ecenomic, legal, ethical, and philanthropic responsilbities

4 interlated dimensions
1. strong sustained economic performance
2. Rigourous Compliance
3. Ethical actions beyond what is legally required
4. Voluntary contributions to advance reputation and stakeholder commitment.

One of an organizations greatest intangiable assets with tangible values

1. difficult to quanitify
2. very important

Formal systems of accountability, oversight. and control

accountability- how closely workplace decisions align with a firm's strategic direction

oversight- a system of checks and balances to minimize opporunites of misconduct

control- the process of auditing and imporiving prganizational decisions and actions

Founded in classic ecenomic concepts

the maximization of wealth for investors and owners

A broader view of the purpose of business

includes satisfying the concerns of stakeholders

Holds final responsilibity of its firm's sucess, failurs, and ethicality of actions

- increased demands for accountability/ transparency

- trend toward "outside directors" chosen for expertise, competence, and strategic decision making

- executive compensation is a growing convern- how executives are compensated for their leadership

That boards are answerable for their actions and transarent.

- directors chosen for expertise, competence, and diverse persectives

- qualified, knowledgeable, unbiased boards can prevent misconduct

interlocking directorated- board members linked to more than one company- not illegal unless it involves a direct compeitior