1. Ethics . . .
Ethics is the study of right and wrong and of the morality of the choices individuals make.
An ethical decision is one that is ‘right’ according to some standard of behavior.

2. Business Ethics
Business Ethics is the application of moral standards to business situations.
Cigarette companies are being fined for their advertising practices.

3. Group Pressure
Businesses are often influenced by group pressure in their ethical practices:
Investors want management to make sensible financial decisions that will increase sales, profits and returns on their investments.
Customers expect a business’s products to be safe, reliable and reasonably priced.

4. Group Pressure (continued)
Employees demand to be treated fairly in hiring, promotion, and compensation decisions.
Creditors require payments to be made on time and accounting information provided by the business to be accurate.
Competitors expect the business’s competitive practices to be fair and honest.

5. Common Ethical Issues
Fairness and Honesty
Discrimination
Deceiving or intimidating others
Organizational Relationship
Taking credit for others work
Pressuring others to behave unethically
Conflict of Interest
When an employee takes advantage of a situation for his or her benefit (bribe), rather than for the employer’s interest
Communication
When communication in business, especially advertising, is false or misleading

6. Case - Deceiving Others
BMW received a court order to pay $2 million to a U.S. buyer because it had failed to inform him that his car paint had been damaged and retouched.
Identify the ethical issue that is violated by BMW
Organizational Relationships
Fairness and Honesty
Conflict of Interest
Communication

7. Case – Taking Credit for Others Work
Assume that you are an employee in XYZ Company. Your manager requested a report about the ‘The Demand and Supply of the Real-Estate Market in Bahrain'. After submitting the report, which is part of your duties, you found that your manager submitted it to the CEO under his name only.
Identify the ethical issue that is violated by the manager
Fairness and Honesty
Organizational Relationships
Conflict of Interest
Communication

8. Case - Bribe
Assume that you are a 'contract manager' in XYZ company. You received an expensive watch from one of the bidders.
Identify the ethical issue that you violated
Fairness and Honesty
Organizational Relationships
Conflict of Interest
Communication

9. Case - Misleading Advertising
This is a billboard ad that is located near to a school. Identify the ethical issue that is violated in the ad
Fairness and Honesty
Organizational Relationships
Conflict of Interest
Communication

10. Encouraging Ethical Behavior
Government, Trade and Professional Organizations provide ethical guidelines for businesses to follow.
Businesses provide a code of ethics to employees to encourage ethical behavior.
A Code of Ethics is a written guide to acceptable and ethical behavior as determined by that organization. It contains uniform policies, standards and punishments for violations.
(Figure 2.2, p 40)

11. Encouraging Ethical Behavior (continued)
Employees know what is expected of them and what will happen if they violate the rules when a written code of ethics is provided and enforced.
Code cannot cover every situation.
Businesses must create an environment in which employees recognize the importance of following the written code.
Managers have to provide direction by encouraging communication, serving as a role model, and training employees to make ethical decisions.

12. Social Responsibility - SR
The recognition that business activities have an impact on society and the consideration of that impact in business decisions

13. Bahraini Companies. . .
Alba – allows the villagers near the plant to take fresh water from their plant site. They also allow them to use the medical facility when necessary.
GPIC – set up a fish nursery in the sea outside their plant to prove that they are not polluters of water. Fish are donated to charities and serve an environmental purpose as they attract flamingos back to the island.
Businesses organize walk-a-thons and other events to raise money for various charities on the island.
Hotels and other organizations volunteer to clean beaches annually.
Some organizations provide scholarships for students to attend universities in Bahrain and around the world.
Some organizations are taking responsibility to prevent air, water, land and noise pollution near and around their plants.

14. International Companies. . .
McDonald’s
Provides low-cost housing for people who have seriously ill children – Ronald McDonald Houses.
Practices recycling and waste control in its 30,000 restaurants around the world – no longer uses styrfoam containers for its sandwiches and drinks .
Starbucks
Uses only materials that may be recycled, including the coffee grounds.
Buys coffee directly from farmers instead of wholesalers.
Provides loans for small coffee farmers.

15. Models of Social Responsibility
Business decisions are made within the firm; so social responsibility begins with the attitude of management.
Government regulations and public awareness have increased the social responsibility of businesses.

16. Models of Social Responsibility
The Economic Model of Social Responsibility states that society will benefit most when business is left alone to produce and market profitable products that society needs.

17. Models of Social Responsibility
The Socioeconomic Model of Social Responsibility states that business should emphasize not only its profits but also the impact of its decision on society.

18. Comparison of Models of Social Responsibility
Arguments For Social Responsibility:
Since business is a part of society, it cannot ignore social issues.
Business has the technical, financial and managerial resources needed to tackle today’s complex social issues.
By helping resolve social issues, business can create a more stable environment for long-term profitability.
Socially responsible decision making by firms can prevent increased government intervention, which would force businesses to do what they decided not to do voluntarily.

19. Comparison of Models of Social Responsibility
Arguments Against Social Responsibility:
Business managers are primarily responsible to investors, so management must be concerned with providing a return on owners’ investments.
Corporate time, money and talent should be used to maximize profits, not to solve society’s problems.
Social problems affect society in general, so individual businesses should not be expected to solve these problems.
Social issues are the responsibility of government officials who are elected for that purpose and are accountable to the voters for their decisions.

20. What is Consumerism?
Consumerism includes all activities undertaken to protect the rights of consumers.

21. Consumerism Six Basic Rights of Consumers The Right to Safety
The Right to Be Informed
The Right to Choose
The Right to Be Heard
The Right to Consumer Education
The Right to Service

22. The Right To Safety Safe for intended use
Explicit directions for proper use
Tested for quality and reliability

23. The Right To Be Informed
Access to complete information about the product before they buy it
Ingredients and Nutrition on food containers
Fabric and laundering methods – clothing
Interest rate – Loans
Potential dangerous of usage
Side effects of medicine

24. The Right To Choose
A choice of product offered by many manufacturers and sellers to satisfy a particular need
Competition: reduction in prices

25. The Right To Be Heard
Someone will listen and take appropriate action when the consumer complains
Consumers Relations/ Services: Created a competitive edge

26. The Right To Consumer Education
Entitles people to be fully informed about their rights as consumers

27. The Right To Courteous Service
Entitles customer to receive convenient, courteous and responsive treatment from manufacturers and sellers