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MGMT 1040 Key Terms and definitions.pdf

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York University
MGMT 1040
Walter Perchal

Ethics Notes - Definitions Categorical Imperative: Kant`s idea that we must act in ways that we can wish every person would act. Every person should treat each other as persons, not as tools that can help them someday. Example: “Lying whenever necessary.” If everyone acted like this, then the notion of lying and truth-keeping would be meaningless. Not everyone would be treated equally. Ponzi Scheme: A ponzi scheme is an elaborate plan through which scammers attract investors to invest with them (since they provide high return on investment margins), although they pay investors back with the money provided by other investors. It is almost like a never-ending cycle, which can only be put to a stop if the scammer is caught. A famous ponzi scheme example is that of Bernard Madoff in 2008, where he attracted people to invest with him for extremely high returns. Madoff was eventually caught, and admitted to his sons that he was running a scheme. Madoff’s scheme was the largest type of investor fraud ever to have been recorded in history. Greenwashing: A tactic exercised by companies and businesses to demonstrate high levels of “Green PR” without actually taking any green initiatives. Example: Labelling coal as “clean coal” which is an oxymoron. This is because burning coal, or fossil fuels, there is no such thing as “clean”. Therefore, “clean coal” can be a form of greenwashing. Triple Bottom Line: The idea that business must not only adhere to the “bottom line” of their business’s operations; rather they must also incorporate environmental and social aspects of their operations. TBL is important in today’s business environment because of the changing face of business reputation, based on their actions. A highly profitable business may not be the best company because of the TBL idea. Corporate Philanthropy: The effort of businesses to contribute to society socially; through donations of money or goods and services in kind, voluntarism (where corporate employees work for social causes), and sponsorship of events that contribute to society. Through corporate philanthropy, a business promotes their reputation through a solid TBL, since they show that they are paying attention to the social aspects of their business as well. Veil of Ignorance: Idea introduced by John Rawls, which proposes the idea of remaining ignorant as to what social status you hold or others hold in society. This promotes equality and non-bias when dealing with others, which indeed is an ethical action. People would be acting non-impartially to each other. Sustainable Development: Development ensuring that the use of resources and the impact on the environment today does not damage prospects for the use of resources or the environment by future generations. Example: construction of energy efficient buildings. Conflict of Interest: A situation in which an individual has a private or personal interest that is sufficient to appear to influence the objective exercise of that individual’s duties. Example: A male manager of a company dates a female employee who is responsible for reporting to him. The manager may do things which may benefit the female employee, or vice versa. A Moral Problem: A moral problem is basically a problem wherein the issue is not of something that must or must not be done, but something that should or should not be done. Example: if you should eat the whole pie yourself, or if you should share the pie with your visiting cousin. Economic Efficiency Ethic: Judges the moral implications of a decision by its economic consequences and provides the moral justification for a market system. Social Capital: Social capital refers to the willingness of people to help each other under social circumstances; without the use of money. Society works best when there is plenty of social capital. If there is very little social capital in society, drastic events such as wars and revolutions may take place. Also, little social capital may provoke citizens to do things such as organized crimes in order to attain what they need. Social capital is an important aspect in the sustainability of society. The Principle of Utilitarian Benefits: This principle states that actions must be taken to ensure the greatest good for the greatest amount of people. Actions must not be taken which result in a greater net harm to society, as opposed to a greater net benefit. The biggest problem with this principle is that it does not accommodate the well-being of many in society, since its only goal is to promote the greatest good for society instead. Many people may be left out and harmed as a result of an action which promotes the greatest benefit to most of the people. Political Globalization: Political globalization refers to the amount of individual and collective organizations which impact or aim to impact the world as a whole.  1909: 40 inter-governmental organisations (IGOs) and 200 international non- governmental organisations (INGOs)  1996: 250 IGOs and 5,000 INGOs . Deontological Ethics: The idea of behaviour to be labelled as ethical or not ethical, based on its adherence to the rule or rules. Sometimes referred to as “rule ethics” since rules bind a person to their duties. Microfinance: The provision of financial products, such as micro-credit, micro-insurance, and savings accounts, to persons living in areas of poverty without access to banking services. The aim of microfinance is to alleviate poverty, by providing low-income families in rural areas of the world the chance to start their own business to sustain their lifestyle. Microfinance is not a new idea; it was introduced in 1700s. However, the rate of load repayment is significantly high presently (90%). Whistleblowing: An action where an individual within an organization waves a red flag over the company’s internal operations, which are illegal. They alert authorities of the actions of the executives of the company in order to put an end to this wrong behaviour. Sherron Watkins was the executive employee of Enron who demonstrated the act of whistleblowing. She had emailed the CEO of the company of inaccuracies in the financial statements of the company, which leaked out to authorities. Corporate Sustainability: Corporate activities demonstrating the inclusion of social and environmental as well as economic responsibilities in business operations as they impact all stakeholders. Cost Benefit Analysis: An analysis conducted to evaluate if an action’s benefits outweigh the costs, or vice-versa. Cost Benefit analyses are conducted to identify if an idea is feasible, and if it is determined to be the better option out of other alternatives. Cost-benefit analyses must always be conducted by companies in their decisions, so that they pick the best choice. An example of the usage of the cost-benefit analysis is when a company is determining whether or not to buy a new type of equipment. (Elaborate on this). Mission Statement: A company’s mission statement explains the purpose of the company. They are meant to serve as a quick overview of why the company is doing what they are doing, in order to attract more members/employees and in order to keep the current members/employees on board. For example: Microsoft’s mission statement is “We work to help people and businesses throughout the world realize their full potential”. This displays the purpose of their company. Inalienable Right: Rights which are given to all citizens, but may be surrendered or transferred through governmental or legal procedures. The difference between inalienable and unalienable rights is that inalienable rights may be surrendered in certain circumstances, but unalienable rights cannot be surrendered or given up under any circumstances whatsoever. An example of an inalienable right is property rights; rights which are given to a person but may not be surrendered unless the consent of the person owning those rights are given. Impartiality: Judgements should be based on objective criteria, instead of it being based on bias, prejudice, or any other ideas which may influence the judgments. Example: Picking a candidate not because you know them from before, but because they possess more merit than other candidates. Invisible Hand: Adam Smith’s idea that markets in an economy is driven by certain forces that appear “invisible” to us. A major force which shapes the market is the promotion of a company’s or an individual’s self-interest. By doing this, an individual or a person may not know that they are positively or negatively affecting the self-interests of others in the economy, hence their actions act as an “invisible hand” which moulds the appearance of an economic system. Limited Liability: The idea that investors or shareholders are liable to the company only
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