COMMERCE 1E03 Chapter Notes - Chapter 5: Corporate Social Responsibility, Federal Accountability Act, Academic Dishonesty

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28 Jul 2016
Chapter 5 Textbook Notes 1E03
Ethics is More Than Legality
New laws making accounting records transparent (easy to read and understand) and more
laws making business people and others more accountable may help
One danger in writing new laws to correct behavior that is within the law is also
A society gets in trouble when people consider only what is illegal and not also what is
Ethics reflects people’s proper relation with one another. Legality refers to laws the
government has written to protect us from fraud, theft and violence.
 Ethical Standards are Fundamental
Ethics: Standards of moral behavior; that is, behavior that is accepted by society as right
versus wrong.
The basic moral values: integrity, respect for human life, self-control, honesty, courage
and self-sacrifice; cheating, cowardice and cruelty are wrong.
 Ethics Begins With Each of Us
A strong relationship between academic dishonesty and dishonesty at work (among
Questions to ask when you’re in an ethical dilemma: Is it legal? Is it balanced? How will
it make me feel about myself?
Managing Businesses Ethically and Responsibly
Businesses should behave ethically because: need to maintain a good reputation, keep
existing customers and attract new ones, avoid lawsuits, reduce employee turnovers,
avoid government intervention in the form of new laws and regulations controlling
business activities, to please customers, employees and societies, and to simply do the
right thing
Managers thin that ethics is a personal matter whereas other people think it’s a
management matter
 Setting Corporate Ethical Standards
Look at Fig 5.4 (page 148). This is testable. (Know the features and what the differences are.
E.g. “what is this an example of?”)
Ethics code divided into 2 categories: compliance-based ethics code & integrity-based
ethic code
Compliance-based ethics code: ethical standard that emphasize preventing unlawful
behavior by increasing control ad by penalizing wrongdoers
Integrity-based ethics code: ethical standards that define the organization’s guiding
values, create an environment that supports ethically sound behavior, and stress a shared
accountability among employees
6 steps on how to improve business ethics:
oTop management must adopt and unconditionally support an explicit corporate
code of conduct
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