Key Terms
Ethics
The standards of behavior we hold ourselves to in personal and professional life; establishes honesty, empathy, and trus
Business Ethics
The conduct by which companies and their agents abide by the law and respect the rights of their stakeholders — customer
Integrity
Unity between what you say and what you do; implies trustworthiness and incorruptibility; more than just consistency — i
Stakeholders
All individuals and entities affected by a business's decisions — customers, suppliers, investors, employees, media, gov
Stockholders/Shareholders
Individuals or institutions that own stock in a corporation; a specific subset of stakeholders; NOT the same as all stak
Compliance
The extent to which a company follows applicable regulations, statutes, and laws. It is mandatory.
Ethical responsibility
Goes beyond legal compliance; voluntary; based on values and principles. The ceiling above the floor.
Normative ethical theories
Philosophical frameworks describing how people OUGHT to behave, based on reason. These are the main lens for evaluating
Short-term perspective
Focus on maximizing periodic (quarterly/annual) profits; leads to shortsighted decisions; prioritizes stockholder return
Long-term perspective
Recognizes that the full impact of a business decision often takes time to develop; going green, charitable giving, empl
Social contract
An implicit agreement among members of society to cooperate for social benefit. When applied to business: a company rece
Goodwill
The value of a business beyond its tangible assets — reputation, brand value, workforce attitude, customer loyalty, and
CSR
Viewing a business as a member of society with obligations beyond legal compliance
Note
Some stakeholders play multiple roles (e.g., an employee who is also a stockholder). Use the interest most directly affe
Ethical relativism
The view that there is no right or wrong — what is ethical depends entirely on context. No fixed standard.