1. © Prentice Hall, 2005Business In Action 3eChapter 2 - 1 Practicing Ethical Behavior and Social Responsibility

2. © Prentice Hall, 2005Business In Action 3eChapter 2 - 2 Two Important Concepts Social responsibility Ethical behavior

3. © Prentice Hall, 2005Business In Action 3eChapter 2 - 3 Corporate Fraud Enron Tyco Arthur Andersen Adelphia WorldCom Ford and Firestone

4. © Prentice Hall, 2005Business In Action 3eChapter 2 - 4 What Is Ethical Behavior? Competing fairly and honestly Communicating truthfully Not causing harming to others

5. © Prentice Hall, 2005Business In Action 3eChapter 2 - 5 Unethical Behavior Cheating on expense accounts Misuse of company resources Creative accounting Padding invoices Insider trading Conflicts of interest

6. © Prentice Hall, 2005Business In Action 3eChapter 2 - 6 Factors Influencing Ethical Behavior Cultural differences Knowledge Organizational behavior

7. © Prentice Hall, 2005Business In Action 3eChapter 2 - 7 Promoting Ethical Behavior Top executives Written code of ethics Ethics training Ethics officer Reporting system

8. © Prentice Hall, 2005Business In Action 3eChapter 2 - 8 Making Ethical Decisions Is It Ethical? PhilosophicalApproachesStakeholderIssues OutsidersSupervisors EmployeesUtilitarianism Individual, Legal and Human Rights Principles of Justice Legality and Balance Acceptability Feasibility

9. © Prentice Hall, 2005Business In Action 3eChapter 2 - 9 Ethical Situations Ethical dilemmas Ethical lapses

10. © Prentice Hall, 2005Business In Action 3eChapter 2 - 10 Social Responsibility in Business Early 20th Century –Maximize profits Middle 20th Century –Provide jobs and pay taxes Early 21st Century –Balance profits and social issues

11. © Prentice Hall, 2005Business In Action 3eChapter 2 - 11 Percentage of Executives Who “Strongly Agree” or “Agree” That Companies Should: Be environmentally responsible Be ethical in operations Earn profits Employ local residents Pay taxes Encourage and support employee volunteering Contribute money and leadership to charities Be involved in economic development Be involved in public education Involve community representatives in business decisions Target a portion of purchasing toward local vendors Help improve quality of life for low-income populations Percentage 100 96 94 89 85 75 73 62 61 54

12. © Prentice Hall, 2005Business In Action 3eChapter 2 - 12 Balancing Business and Stakeholders’ Rights Business Investors Consumers Employees Society

13. © Prentice Hall, 2005Business In Action 3eChapter 2 - 13 Efforts to Increase Social Responsibility Social audit Cause-related marketing Philanthropy

14. © Prentice Hall, 2005Business In Action 3eChapter 2 - 14 Causes of Pollution Industrial discharges Vehicle emissions Chemical spills

15. © Prentice Hall, 2005Business In Action 3eChapter 2 - 15 Government Efforts to Reduce Pollution Environmental protection agency –Regulate air and water –Reduce automobile emissions –License pesticides –Control toxic substances –Safeguard drinking water

16. © Prentice Hall, 2005Business In Action 3eChapter 2 - 16 Business Efforts at Reduction Environmental issues Environmental staff Performance expectations Performance rewards Long-term cost Product development Supplier expectations Training and awareness

17. © Prentice Hall, 2005Business In Action 3eChapter 2 - 17 Responsibility Toward Consumers The right to safe products The right to be informed The right to choice The right to be heard

18. © Prentice Hall, 2005Business In Action 3eChapter 2 - 18 Responsibility Toward Investors Fair profit distribution Social responsibility Ethical behavior

19. © Prentice Hall, 2005Business In Action 3eChapter 2 - 19 Responsibility Toward Employees Equal employment opportunity Affirmative action Americans with Disabilities Act Occupational health and safety

20. © Prentice Hall, 2005Business In Action 3eChapter 2 - 20 Global Ethics and Social Responsibility Bribery Environmental abuse Unscrupulous business practices