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ADMS3660 Summary-Business Ethics


  • ADMS 3660 Business Ethics Notes

    Ch 1- Business and Society Relationship

    -aside from corporate wrongdoing, many common issues include

    -corporate abuse of the environment, toxic waste disposal

    -sweatshop conditions, sexual harassment in the workplace

    -corporate power, minority rights

    -drug testing, insider trading, whistle blowing, product liability crises

    -lack of concern for the welfare of consumers (eg. Fast food industries)

    Business and Society

    Business- the collection of private, commercially oriented orgs, ranging in diff sizes

    -big businesses are more widely known in the public eye

    -people in our society often associate size with power

    -when referring business in relation to society, all different business sizes must be kept in mind

    Society- a community, nation or broad grouping of people that have common traditions and values

    -is composed of numerous interest groups, formalized orgs, and a variety of institutions

    Society as the Macroenvironment

    Macroenvironment- the total env outside a firm; is the societal context in which the organization resides

    -composed of four segments

    Social environment- focuses on demographics, lifestyles, social values of the society

    Economic env- nature and direction of the economy in which business operates

    Eg. GNP, inflation, unemployment rates, global trade

    Political env- processes by which laws get passed and officials get elected

    Technological env- total set of tech-based advancements taking place in society

    Our Pluralistic Society

    Pluralism- the diffusion of power among societys many groups and organizations

    -a pluralistic society is one in which there is wide decentralization and diversity of power concentration

    -the power is dispersed among many individuals

    Strengths- prevents power from being concentrated in the hands of a few

    -maximizes freedom of expression and action

    -no single group will dominate

    Weaknesses- diverse institutions pursue own self-interests; no central direction to unify these pursuits

    -there is confusion as to which orgs best serve which functions

    -conflicts among groups when they each try to pursue their own objectives

    -the system isnt very efficient

    Business and Multiple Publics, Systems, and Stakeholders

    -when we speak of business and society relationships, we usually refer either to particular segments, or

    to business and some system in our society

  • Our Special-Interest Society

    Defn- the idea of pluralism to an extreme in which thousands of special interest groups each pursues its

    own limited agenda

    -specialization on the part of interest groups representing all sectors of society

    -including consumers, communities, natural environment, the government

    -these groups have increasingly become active, committed, intense and diverse

    -each of these groups have been able to attract many members, thus increasing revenues

    -at the same time, they also increase the complexity for businesses to operate with them

    Business Criticism and Corporate Response

    Factors in the Social Environment

    Societal Beliefs Regarding Success in Business

    -the belief that material success is derived from some kind of dishonesty

    -tv has suggested that in order to succeed, one has to engage in some kind of dishonesty, manipulation

    -essentially, to get ahead, one needs to step on other people

    Affluence and Education

    -as a society becomes more affluent and better educated, there are also higher expectations

    Affluence- the level of wealth, disposable income, standard of living of society

    -reflects both economic welfare and social elements

    Education- how much one receives in their environment

    -the combo of affluence and education forms the underpinning for a climate where societal criticism of

    businesses arises

    Awareness through the Media

    -newspapers, magazines, television

    -through tv, the audience gets a variety of info that contributes to a climate of business criticism

    Straight News and Investigative News Programs

    -straight news shows that often portray businesses in a negative spotlight/bias

    -journalists see it differently though, they say that when asked, businesses ignore qtns&downplay issues

    Prime-Time TV Programs

    -business people are often cast as evil and greedy

    -is also shown through movies as well


    -are a double edged sword; in SR they may sell more products, but if products are promoted in a

    deceptive way, then LR they will lose credibility

    -the media therefore should be seen as only one major factor that contributes to the env in which the

    business now finds itself

  • Revolution of Rising Expectations

    Defn- belief that each succeeding generation has a standard of living higher than the one before

    Social problem- the gap b/n a societys expectations of social conditions and the actual social realities

    -the nature of rising expectations is such that they outpace the responsiveness of businesses, thus

    creating a predicament that is conducive to criticism

    Entitlement Mentality

    Defn- the general belief that someone is owed something because theyre a member of society

    -the current context of workplace has contributed to making the issue of entitlement more prominent

    Rights Movement

    Defn- comes from the revolution of rising expectations, entitlement mentality, and more

    -activism for rights of other groups, like blacks, women, ethnic minorities, disabled

    Criticisms: Use and Abuse of Power

    -common issue that runs through all complaints is the use and abuse of power

    -the reason that Canadians are less trusting of companies is they feel mistreated and ignored as both

    citizens and consumers

    -some points of friction include CEO pay, high gas and drug prices, poor airline service

    Business power- ability or capacity to produce an effect or to bring influence to people

    -in the context of business criticism, power is perceived as being abused

    Levels of Power

    Macro level corporate system

    Intermediate level groups of corps that act in concert in an effort to produce a desired effect

    -could be to raise prices, control markets

    Micro levellevel of the individual firm; any one major corporation

    Individual levelindividual corporate leader that exerts power; one person

    -as one analyzes corporate power, they should keep in mind the diff levels of power

    Spheres of Power

    -economic power, political power are most common

    -social and cultural; power over the individual; technological; environmental

    Balance of Power and Responsibility

    -the power/responsibility relationship is the foundation for CSR

    Iron law of Responsibility- in the LR, those who do not use power in a manger which society considers

    responsible will lose it

    -when power is out of balance a variety of forces come to bear on business to be more responsible;

    including governmental actions

  • Business Response: Concern and Changing Social Contract

    -social env is also seen as a collection of conditions, events, that reflect how people think and behave

    Social contract- two way understandings that characterizes the r/n between business and society

    -social contract has been changing to reflect societys expectations of business

    Social contract can be articulated through:

    -laws and regulations that the society has established

    -shared understandings to each groups expectations of the other

    -creates more confusion and room for misunderstandings though

    Ch 6- Business Ethics Fundamentals

    The Publics Opinion of Business Ethics

    -there is just a fine line between a business exec and somebody who lies

    Gallup Poll Ranks Business Ethics

    -the poll surveys public opinion of social and political issues

    -quizzes the public on its perceptions about the ethics of business execs

    -honesty and ethics of business execs arent thought to be highly ranked

    -those lower are real estate agents, salespeople, stockbrokers

    -nurses are highly ranked

    -business execs ranks in the middle

    Are the Media Reporting Ethics More Vigorously

    -the media are reporting ethical issues more frequently

    -ethics questions among all institutions are subjects of growing and sustaining interest

    Is It Society that is Actually Changing

    -illegal corp activities can be traced to changes that have taken place in society, and to the unwillingness

    of many in business to adjust to these changes

    -what has changed are the contexts in which decisions are made, the demands that are being made, and

    the nature of whats considered proper corporate conduct

    Business Ethics: What Does it Really Mean?

    Ethics- deals with what is good and bad and with moral duty and obligation

    -is a set of moral principles or values

    -moral conduct refers to the principles of right and wrong in behaviour

    Business ethics- good and bad, or right and wrong practices within a business context

    -fairness, justice, equity

    Descriptive ethics- characterizes the morality of people, culture, society

    -compares moral codes, systems, beliefs, values, practices

    -focuses on what is the prevailing set of ethical standards

    -some people adopt the view that since everybody is doing it, its acceptable

    Normative ethics