1. Chapter 21 Ethics and Social Responsibility Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 1 Ethics and Social Responsibility: Doing the Right Thing

2. Chapter 21 Ethics and Social Responsibility Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 2 Business Ethics The fundamental moral values and behavioral standards that form the foundation for the people of an organization as they make decisions and interact with stakeholders

3. Key Stakeholders Employees Customers Investors Creditors Government General Public Suppliers Board of Directors Board of Directors Management Special Interest Groups Special Interest Groups Unions Internal Stakeholders External Stakeholders Chapter 21 Ethics and Social Responsibility Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 3

4. Chapter 21 Ethics and Social Responsibility Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 4 Three Levels of Ethical Standards The law The law Organizational policies and procedures Organizational policies and procedures The moral stance employees take when faced with decisions not governed by formal rules The moral stance employees take when faced with decisions not governed by formal rules

5. Chapter 21 Ethics and Social Responsibility Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 5 An Ethical Framework Step 1. Recognize the ethical dimensions involved in the dilemma or decision Step 2. Identify the key stakeholders involved and determine how the decision will affect them Step 3. Generate alternative choices and distinguish between ethical and unethical responses Step 4. Choose the “best” ethical response and implement it

6. Chapter 21 Ethics and Social Responsibility Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 6 Three Styles of Management Immoral management - driving force is greed Immoral management - driving force is greed Amoral management - does not consider ethical impact on others Amoral management - does not consider ethical impact on others Moral management - sees the law as a minimum standard of behavior Moral management - sees the law as a minimum standard of behavior

7. Chapter 21 Ethics and Social Responsibility Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 7 The Benefits of Moral Management Earning a profit does not conflict with maintaining high ethical standards 1. Avoid the damage to a company’s reputation that results from unethical behavior 2. Dealing with diverse stakeholders is easier with a solid ethical foundation 3. Attracting and retaining quality workers is easier 4. A company’s ethical philosophy determines its ability to provide value for its customers

8. Chapter 21 Ethics and Social Responsibility Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 8 Why Ethical Lapses Occur An unethical employee An unethical employee An unethical organizational culture An unethical organizational culture Moral blindness Moral blindness Competitive pressures Competitive pressures Opportunity pressures Opportunity pressures Globalization of business Globalization of business

9. Chapter 21 Ethics and Social Responsibility Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 9 Establishing Ethical Standards The u’tili’tarian principle The u’tili’tarian principle Kant's categorical imperative Kant's categorical imperative The professional ethic The professional ethic The Golden Rule The Golden Rule The television test The television test The family test The family test

10. Chapter 21 Ethics and Social Responsibility Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 10 Maintaining Ethical Standards Create a company credo Create a company credo Develop a code of ethics Develop a code of ethics Enforce the code fairly and consistently Enforce the code fairly and consistently Conduct ethics training Conduct ethics training Hire the right people Hire the right people

11. Chapter 21 Ethics and Social Responsibility Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 11 Perform periodic ethical audits Perform periodic ethical audits Establish high standards of behavior...not just rules Establish high standards of behavior...not just rules Set an impeccable ethical example Set an impeccable ethical example Create a culture that emphasizes two-way communication Create a culture that emphasizes two-way communication Involve employees in establishing ethical standards Involve employees in establishing ethical standards Maintaining Ethical Standards

12. Chapter 21 Ethics and Social Responsibility Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 12 Social Responsibility Social responsibility - the awareness by a company’s managers of the social environmental, political, human, and financial consequences its actions produce Studies: Companies that incorporate social responsibility into their competitive strategies outperform those that fail to do so

13. Business has a Social Responsibility to... The environment The environment Employees Employees Customers Customers Investors Investors The community The community Chapter 21 Ethics and Social Responsibility Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 3

14. Chapter 21 Ethics and Social Responsibility Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 14 Responsibility to the Environment The “Three R’s”: The “Three R’s”: Reduce the amount of materials used in your company Reduce the amount of materials used in your company Reuse whatever you can Reuse whatever you can Recycle the materials that you must dispose of Recycle the materials that you must dispose of

15. Chapter 21 Ethics and Social Responsibility Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 15 Responsibility to Employees Diversity Diversity

16. Source: U.S. Census Bureau, 2007.

17. Chapter 21 Ethics and Social Responsibility Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 17 SPLENDID Approach to Diversity Study Study Plan Plan Lead Lead Encourage Encourage Notice Notice Discussion Discussion Inclusion Inclusion Dedication Dedication

18. Chapter 21 Ethics and Social Responsibility Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 18 Managing Diversity Assess your company’s diversity needs Assess your company’s diversity needs Learn to recognize your own biases and stereotypes Learn to recognize your own biases and stereotypes Avoid making invalid assumptions Avoid making invalid assumptions Push for diversity in your management team Push for diversity in your management team

19. Chapter 21 Ethics and Social Responsibility Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 19 Concentrate on communication Concentrate on communication Make diversity a core value in the organization Make diversity a core value in the organization Continue to adjust your company to your workers Continue to adjust your company to your workers Managing Diversity

20. Chapter 21 Ethics and Social Responsibility Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 20 Responsibility to Employees Diversity Diversity Drug testing Drug testing

21. Chapter 21 Ethics and Social Responsibility Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 21 A Drug Prevention Program Should Include... A written substance abuse policy A written substance abuse policy Training supervisors to detect drug- using workers Training supervisors to detect drug- using workers An employee education program An employee education program A drug testing program, when necessary A drug testing program, when necessary An employee assistance program (EAP) An employee assistance program (EAP)

22. Chapter 21 Ethics and Social Responsibility Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 22 Responsibility to Employees Diversity Diversity Drug testing Drug testing AIDS AIDS

23. Chapter 21 Ethics and Social Responsibility Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 23 An AIDS Policy Should Address … Employment Employment Discrimination Discrimination Employee benefits Employee benefits Confidentiality Confidentiality Education Education “Reasonable accommodations” “Reasonable accommodations”

24. Chapter 21 Ethics and Social Responsibility Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 24 Responsibility to Employees Diversity Diversity Drug testing Drug testing AIDS AIDS Sexual harassment Sexual harassment

25. Chapter 21 Ethics and Social Responsibility Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 25 Sexual Harassment Any unwelcome sexual advance, request for sexual favors, or other verbal or physical sexual conduct made explicitly or implicitly as a condition of employment Any unwelcome sexual advance, request for sexual favors, or other verbal or physical sexual conduct made explicitly or implicitly as a condition of employment 85% of sexual harassment cases are filed by women 85% of sexual harassment cases are filed by women Harassment an take several forms Harassment an take several forms

26. Chapter 21 Ethics and Social Responsibility Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 26 Behavior Leading to Sexual Harassment Charges Quid Pro Quo (“something for something”) harassment Quid Pro Quo (“something for something”) harassment Hostile environment Hostile environment Harassment by non-employees Harassment by non-employees

27. Source: Equal Employment Opportunity Commission, 2007

28. Chapter 21 Ethics and Social Responsibility Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 28 Preventing Sexual Harassment Education Education Policy Policy Procedure Procedure  Listen without judging  Investigate complaints promptly  Interview parties involved and witnesses  Maintain confidentiality  Follow company policy  Inform both parties of actions taken  Document the investigation

29. Chapter 21 Ethics and Social Responsibility Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 29 Responsibility to Employees Diversity Diversity Drug testing Drug testing AIDS AIDS Sexual harassment Sexual harassment Privacy Privacy

30. Chapter 21 Ethics and Social Responsibility Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 30 Responsibility to Customers Right to safety Right to safety Right to know Right to know Right to be heard Right to be heard Right to education Right to education Right to choice Right to choice

31. Chapter 21 Ethics and Social Responsibility Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 31 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America. Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall