2. Fourth Edition Copyright ©2003 Prentice Hall, Inc. PART 1........................ Understanding the Contemporary Business Environment

3. Copyright ©2003 Prentice Hall, Inc. 3 - 2 Conducting Business Ethically Business Essentials Chapter 3 Business Essentials Chapter 3

4. Copyright ©2003 Prentice Hall, Inc. 3 - 3 “The more I help others to succeed, the more I succeed.” Ray Kroc, Founder, McDonald’s

5. Copyright ©2003 Prentice Hall, Inc. 3 - 4 Exercise Identify examples of ethical and unethical business practices. Ethical Business Practices: Examples: Donating a percentage of profits to charity and community causes (Ben & Jerry’s donates 7-1/2% of pre-tax profits Unethical Business Practices: Examples: Forwarding “marketing research” results to sales people, selling cigarettes to minors Why do companies engage in both kinds of behavior?

6. Copyright ©2003 Prentice Hall, Inc. 3 - 5 Key Topics Individual codes of ethics and the importance of ethics in the workplace Key terms Social responsibility in U.S. business Environmental issues and stakeholder relationships Approaches and implementation Implications for small business

7. Copyright ©2003 Prentice Hall, Inc. 3 - 6 What Is Ethical Behavior? Ethics: Right and wrong, good and bad, in actions that affect others Ethical Behavior: Conforming to generally accepted ethical norms

8. Copyright ©2003 Prentice Hall, Inc. 3 - 7 Ethical Considerations Regarding a particular act… Utility: Does it optimize what is best for those who are affected by it? Rights: Does it respect the rights of the individuals involved? Justice: Is it consistent with what we regard as fair? Caring: Is it consistent with people’s responsibilities to each other?

9. Copyright ©2003 Prentice Hall, Inc. 3 - 8 The Coca Cola Scare Case Company Practices and Business Ethics Best Approach: Open, Honest, Responsive! The Tylenol Scare Case

10. Copyright ©2003 Prentice Hall, Inc. 3 - 9 Email Internet Cellular Phones How Much Privacy Does Your Employer Owe You?

11. Copyright ©2003 Prentice Hall, Inc. 3 - 10 Formalizing the Commitment to Ethics Adopting Written Codes Instituting Ethics Programs

12. Copyright ©2003 Prentice Hall, Inc. 3 - 11 Principles, Ethics, and Corporate Policy Core Principles & Organizational Values

13. Copyright ©2003 Prentice Hall, Inc. 3 - 12 Social Responsibility: Balancing Commitments to Stakeholders Stakeholders: Groups, individuals, and organizations that are directly affected by the practices of an organization EmployeesInvestors Local Communities CustomersSuppliers CORPORATION

14. Copyright ©2003 Prentice Hall, Inc. 3 - 13 The Evolution of Social Responsibility Contemporary Social Consciousness Era of Social Activism The Great Depression Entrepreneurial Era

15. Copyright ©2003 Prentice Hall, Inc. 3 - 14 Air pollution Water pollution Land pollution Toxic waste Recycling Responsibility Toward the Environment

16. Copyright ©2003 Prentice Hall, Inc. 3 - 15 Responsibility Toward Customers Consumer Rights Unfair Pricing Ethics in Advertising

17. Copyright ©2003 Prentice Hall, Inc. 3 - 16 Responsibility Toward Employees Legal & Social Commitments Whistle-blowers

18. Copyright ©2003 Prentice Hall, Inc. 3 - 17 Responsibility Toward Investors Improper financial management Check kiting Insider trading Misrepresentation of finances

19. Copyright ©2003 Prentice Hall, Inc. 3 - 18 Level of Social Responsibility Approaches to Social Responsibility Defensive Stance Obstructionist Stance Accommodative Stance Proactive Stance Lowest Highest Actively Avoids Responsibility Does Legal Minimum Responds to Requests Actively Seeks Opportunities to Contribute

20. Copyright ©2003 Prentice Hall, Inc. 3 - 19 Social Responsibility Managing Social Responsibility Programs Social Audit Appointment of Director Strategic Planning Top-Management Support

21. Copyright ©2003 Prentice Hall, Inc. 3 - 20 Ethics, Social Responsibility, and the Small Business Do small businesses face different issues with regard to ethics and social responsibility?

22. Copyright ©2003 Prentice Hall, Inc. 3 - 21 Chapter Review Discuss how individuals develop their personal codes of ethics. Explain why ethics matter in the workplace. Distinguish social responsibility from ethics. Show how social responsibility applies to environmental issues and to relationships with customers, employees, and investors. Identify four approaches to social responsibility. Describe the four steps a firm must take to implement a social responsibility program. Explain how social responsibly and ethics affect small business.