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MGT353 - Chapter 04

Monitor business operations requires executives to

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Unformatted text preview: r the accuracy of a firm’s financial reports Requires executives to pay back bonuses based on earnings that are later proved fraudulent Established strict rules fro auditing firms In 2006 and 2007 regulation loosening occurred when the SEC provided more relaxed guidelines to parts of the Sarbanes-Oxley Act 4-10 5 2/16/2014 Five Key Reasons Business Should Be Ethical 4. To prevent or minimize harm Overriding principle that business should “do no harm” Examples include not harming society with toxic waste, protecting business from unethical employees and unethical competitors 5. To promote personal morality Knowing one works in a supportive ethical climate contributes to sense of psychological security People want to work for companies that do the right thing 4-11 Why Ethical Problems Occur in Business Four Primary Reasons 1. 2. 3. 4. Personal gain and selfish interest Competitive pressure on profits Conflicts of interest Cross-cultural contradictions 4-12 6 2/16/2014 Figure 4.3 Why Ethical Problems Occur in Business 4-13 Core Elements of Ethical Character: Managers’ Values Managers are key to whether a company and its employees will act ethically or unethically The values held my managers will serve as models for others who work at the company Differences in ethical stances of U.S. versus European managers and employees Younger generation of managers mo...
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