1. COPYRIGHT © 2011 South-Western/Cengage Learning. 1 Click your mouse anywhere on the screen to advance the text in each slide. After the starburst appears, click a blue triangle to move to the next slide or previous slide.

2. COPYRIGHT © 2011 South-Western/Cengage Learning. 2 Quotes of the Day “The one and only social responsibility of business is to increase its profits.” Milton Friedman (b. 1912), Nobel laureate in economics “The business of business is serving society, not just making money.” Dayton Hudson corporate constitution

3. COPYRIGHT © 2011 South-Western/Cengage Learning. 3 Ethics Ethics is the study of how people ought to act. Law and ethics may not always agree... Sometimes it is ethical to commit an illegal act... And some legal acts are unethical!

4. COPYRIGHT © 2011 South-Western/Cengage Learning. 4 Why Bother With Ethics? There is little evidence that ethical behavior increases profits or that unethical behavior decreases profits… so why bother?  Society as a whole benefits by encouraging fair economic competition.  Money does not buy happiness.  People feel better when they behave ethically.  Unethical behavior can be costly, if there is public outrage leading to a boycott.  Ethical behavior is more likely to pay off.

5. COPYRIGHT © 2011 South-Western/Cengage Learning. 5 What is Ethical Behavior? Questions to Ensure Ethical Behavior  What are the facts?  What are the critical issues?  Who are the stakeholders?  What are the alternatives?  What are the implications of each choice? Are the alternatives legal? Do they “look bad?” What are the consequences of this choice? Does this action violate important values?  Is more than one alternative right?

6. COPYRIGHT © 2011 South-Western/Cengage Learning. 6 Businesses must take a stand on sexual and racial exploitation in advertising.  Alternatives in advertisement ethics Ignore ethics and try to create ads that sell the most product, no matter the underlying message. Try generally to minimize exploitation. Include a systematic, focused review of underlying messages as part of the development process. Refuse to create any ads that are even potentially offensive. Responsibility To Society

7. COPYRIGHT © 2011 South-Western/Cengage Learning. 7  To customers Is a business responsible if its decisions create a financial hardship for someone else? What if a decision leaves someone homeless?  To employees Should employers be required to treat all employees the same in regard to benefits? Other Responsibilities  To shareholders Questions are often raised about uses of a company’s profits -- distributed to shareholders, raising executives’ salaries, improving business? Should a company be allowed to intentionally lower profits to improve in other areas?

8. COPYRIGHT © 2011 South-Western/Cengage Learning. 8  To -- and in -- foreign countries Companies with operations in foreign countries are often criticized for deplorable working conditions and low wages. Response to these criticisms is often that even low- wage jobs are better than destitution and that these jobs are the beginnings of economic growth. Other Responsibilities (cont’d)  Employees’ responsibility to organization Should employees report unethical behavior among co-workers? Should promotion decisions be made based on friendships? These questions show the difficult choices that have to be made every day in the work place.

9. COPYRIGHT © 2011 South-Western/Cengage Learning. 9 The Best Insurance Even employees who are ethical in their personal lives may find it difficult to uphold their standard at work if those around them behave differently. The surest way to infuse ethics throughout an organization is for top executives to behave ethically themselves.

10. COPYRIGHT © 2011 South-Western/Cengage Learning. 10 “Ethical behavior offers significant advantages: society as a whole benefits; executives who behave ethically have happier, more fulfilled lives; and unethical behavior can destroy a company.” “Ethical behavior offers significant advantages: society as a whole benefits; executives who behave ethically have happier, more fulfilled lives; and unethical behavior can destroy a company.”