MGMT 427 Business and Society TEST 1 (Key Terms)
Departments, or offices, within an organization that reach across the dividing line that separates a company from groups and people in society.
An organization that is engaged in making a product or providing a service for a profit.
general systems theory
A theory that holds that all organisms are open to, and interact with, their external environments.
interactive social system
The closely intertwined relationships between business and society.
ownership theory of the firm
A theory that holds that the purpose of the firm is to maximize the long-term return for its shareholders. (Also called the property or finance theory of the firm.)
A person or group that affects, or is affected by, a corporation’s decisions, policies, and operations. (See also market stakeholder and nonmarket stakeholder.)
Refers to human beings and to the social structures they collectively create; specifically refers to segments of humankind, such as members of a particular community, nation, or interest group.
A graphical representation of the relationship of stakeholder salience to a particular issue.
An analytic process used by managers that identifies the relevant stakeholders in a particular situation and seeks to understand their interests, power, and likely coalitions.
Alliances among company’s stakeholders to pursue a common interest.
The nature of each stakeholder group, its concerns, and what it wants from its relationship with the firm.
A stakeholder that does not engage in direct economic exchange with a company, but is affected by or can affect its actions. (Also called a secondary stakeholder.)
The ability of one or more stakeholders to achieve a desired outcome in their interactions with a company. The four types are voting power, economic power, political power, and legal power.
A stakeholder’s ability to stand out from the background, to be seen as important, or to draw attention to itself or its issue. Stakeholders are more salient when they possess power, legitimacy and urgency.
stakeholder theory of the firm
A theory that hold that the purpose of the firm is to create value for society.
The idea that the wealthier members of society or profitable businesses should contribute to those less fortunate or to organizations that provide community services.
The strength or capability of corporations to influence government, the economy, and society, based on their organizational resources.
corporate social responsibility
The idea that businesses should be held accountable for any of its actions that affect people, their communities, and their environment.
The view that holds it is in business’s self-interest in the long run to provide true value to its stakeholders and behave responsible as a global corporate citizen.
iron law of responsibility
The belief that those who do not use their power in ways that society considers responsible will tend to lose their power in the long run.
A belief that a firm must abide by the laws and regulations governing the society.
The desirable or undesirable qualities associated with an organization or its actors that may influence the organization’s relationships with its stakeholders.
The idea that business managers, as public stewards or trustees, have an obligation to see that everyone—particularly those in need or at risk—benefits from the company’s actions.
The application of general ethical ideas to business behavior.
conflicts of interest
Occur when an individual’s self interest conflicts with acting in the best interest of another, when the individual has an obligation to do so.
A person who puts his or her own selfish interests above all other considerations, while denying the ethical needs and beliefs of others.
Guides to moral behavior, such as honesty, keeping promises, helping others, and respecting others’ rights.
A belief that ethical right and wrong are defined by various periods of time in history, a society’s traditions, the specific circumstances of the moment, or personal opinion.
A conception of right and wrong conduct, serving as a guide to moral behavior.
An ethical approach emphasizing a person or group’s entitlement to something or to be treated in a certain way, such as the right to life, safety, or to be informed.
An ethical approach that emphasizes whether the distribution of benefits and burdens are fair among people, according to some agreed-upon rule.
U.S. law passed in 2002 that greatly expanded the powers of the SEC to regulate information disclosure in the financial markets and the accountability of an organization’s senior leadership regarding the accuracy of this disclosure. (See also Securities and Exchange Commission.)
A personal belief in a supreme being, religious organization, or the power of nature or some other external, life-guiding force.
stages of moral development
A sequential pattern of how people grow and develop in their moral thinking, beginning with a concern for the self and growing to a concern for others and broad-based principles.
U.S. Corporate Sentencing Guidelines
Standards to help judges determine the appropriate penalty for criminal violations of federal laws and provide a strong incentive for businesses to promote ethics at work.
An ethical approach that emphasizes the consequences of an action and seeks the overall amount of good that can be produced by an action or a decision.
Focuses on character traits to define a good person, theorizing that values will direct a person toward good behavior.
A questionable or unjust payment often to a government official to ensure or facilitate a business transaction.
A blend of ideas, customs, traditional practices, company values, and shared meanings that help define normal behavior for everyone who works in a company.
employee ethics training
Programs developed by businesses to further reinforce their ethical expectations for their employees.
An unspoken understanding among employees of what is and is not acceptable behavior.
ethics and compliance officer
A manager designated by an organization to investigate breaches of ethical conduct, promulgate ethics statements, and generally promote ethical conduct at work.
An assessment used by an organization to target the effectiveness of their ethical safeguards or to document evidence of increased ethical employee behavior.
ethics policies or codes
A written set of rules used to guide managers and employees when they encounter an ethical dilemma.
ethics reporting mechanisms
A program that enables employees, customers or suppliers to report an ethical concern directly to someone in authority in an organization.
Society’s attempt to formalize into written rules the public’s ideas about what constitutes right and wrong conduct in various spheres of life.
U.S. Foreign Corrupt Practices Act
Federal law that prohibits businesses from paying bribes to foreign government officials, political parties, or political candidates.
white collar crime
Illegal activities committed by corporate managers or business professionals, such as fraud, insider trading, embezzlement or computer crime.
Read about the business and society relationship