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McGraw-Hill/Irwin Copyright © 2010 by the McGraw-Hill Companies, Inc. All rights reserved. BUSINESS ETHICS AND SOCIAL RESPONSIBILITY 17.

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Presentation on theme: "McGraw-Hill/Irwin Copyright © 2010 by the McGraw-Hill Companies, Inc. All rights reserved. BUSINESS ETHICS AND SOCIAL RESPONSIBILITY 17."— Presentation transcript:

1 McGraw-Hill/Irwin Copyright © 2010 by the McGraw-Hill Companies, Inc. All rights reserved. BUSINESS ETHICS AND SOCIAL RESPONSIBILITY 17

2 2 Learning Objectives Define ethics. Explain the importance of a code of ethics. Describe the process of rationalizing unethical behavior. Explain ethics in the context of the U.S. workplace.

3 3 Describe the influence of group goals on ethics. Give examples of global ethics issues. Define social responsibility. Describe the process of whistleblowing. Learning Objectives

4 4 What is Ethics Ethics expresses the standards of right and wrong. – more precise and is often based on written guidelines. Morality deals with how behavior should conform to cultural ideals of right and wrong. – broadly based, mostly unwritten standards of behavior.

5 5 Ethical standards are different from law. Ethics violations are not always punishable. It is difficult to pin down ethics violations and what the penalties for such violations should be. A common perception is ‘business’ and ‘ethics’ can hardly be used in the same sentence. What is Ethics

6 6 Misperceptions that affect understanding of ethics: – All ethical problems have simple solutions in which right and wrong are always obvious. – Ethics is simply a matter of complying with a set of rules or regulations. What is Ethics

7 7 Ethics and the Internet – A sticky ethical issue is how to behave ethically on the Internet? – Companies track employee usage, looking for personal misuse of company property. – The Internet has introduced enormous compliance issues. – Online merchants purchase confidential information about people’s buying habits. What is Ethics

8 8 Ethics and the Internet (cont.): – Consumers resent personal information being sold without consent. – Due to technology, people don’t know what the ethics issues are. – Another issue is copyright infringement. What is Ethics

9 9 Codes of Ethics Some companies have developed specific ethical codes. Codes of ethics are usually based on one of the following ethical approaches: – Principles of justice – Individual rights – Utilitarianism – Individualism – The categorical imperative

10 10 Principle of justice – All decisions should be consistent, unbiased, and based on fact. Principle of individual rights – All decisions should respect basic human rights and the dignity of the individual. Principle of utilitarianism – All decisions should do the greatest good for the largest number of people. Codes of Ethics

11 11 Principle of individualism – All primary goals should achieve long-term self-interests. Categorical imperative – A principle developed by Immanuel Kant, which asks, “What would the world—or my company—be like if everyone were to do this?” Codes of Ethics

12 12 Rationalizing Unethical Behavior Even people with a good knowledge of ethics can rationalize unethical behavior. People with high self-esteem are less likely to seek the short-term gains of unethical behavior and not engage in rationalization.

13 13 According to Saul Gellerman, unethical behavior starts with one of these four rationalizations: – Unethical behavior is within ethical/legal limits. – Because the chosen behavior will work best for the individual/ company, the company would expect it. – Nobody will notice. – As the behavior helps the company, it will protect the person if he/she is caught. Rationalizing Unethical Behavior

14 14 Ethics in Context An ethical issue is people acting insincerely with others to achieve their own ends. Politics exists in any company; gaining political power isn’t an unethical behavior. When people compromise on integrity to succeed at getting ahead, it crosses an ethical line. A common view is that boss massaging is necessary for success.

15 15 The Influence of Group Goals When encountering someone in need of help, many people look the other way as their goals or group’s pressures override the need to help. This creates conflict, as people are unable to transfer helping behavior they learn at home to the workplace. Many people change their ethical standards between home and work.

16 16 Global Ethics Issues A historical perspective – The values and customs of other countries are not inferior, primitive, or degraded. – They have different origins, evolutions, and applications through history. – Discussion example: Acceptance of bribery and kickbacks

17 17 Three concepts to remember while doing business with foreign companies: – Inner circle – Clique of trusted family/tribal members/friends who are at the center of power/ influence. – Future favors – Based upon mutual obligation, and resulting in the exchange of favors; common in developing countries and also used in some industrialized countries. – Gift exchange – A strong tradition in many cultures in which giving gifts create a future obligation to the receiver. Global Ethics Issues

18 18 Social Responsibility Social responsibility means putting ethical standards to work in all areas of the global community in which one lives. It includes acting ethically with customers, co- workers, suppliers, competitors, and the community in which one lives.

19 19 Three accepted views of social responsibility: – Traditional social responsibility – An organization is responsible only to itself and to making a profit. – Stakeholder social responsibility – Companies are responsible to stakeholders. – Affirmative social responsibility – Companies are also responsible to the general public at large. Social Responsibility

20 20 Difficult questions regarding social responsibility: – What happens when a company can no longer afford to support charities or organizations? – How does a company choose to support specific organizations while not helping others? – Companies may also find that their acts of social responsibility are misunderstood and resented. Social Responsibility

21 21 Blowing the Whistle Whistleblowing – Turning in or otherwise exposing people who behave unethically in a company. – The first law passed to protect whistleblowers was the Lloyd–LaFollette Act of 1912. – The Whistleblower Protection Act was passed in 1989 and strengthened in 1994.

22 22 Strategies for a whistleblower: – Secretly threatening the offender with blowing the whistle unless the unethical action is stopped/corrected. – Anonymously blowing the whistle within the company, keeping one’s identity a secret. – Secretly threatening a responsible manager of blowing the whistle outside the company unless a change is made in the conduct. Blowing the Whistle

23 23 Strategies for a whistleblower (cont.): – Sabotaging the results of an unethical behavior in some way. – Publicly blowing the whistle within the organization. – Quietly refusing to carry out an unethical plan. – Secretly or publicly blowing the whistle outside the company. Blowing the Whistle

24 24 Top management is in an ideal position to create an ethical environment. Management can create low ethical standards by the following mistakes: – Favoritism. – “Fudging” with the expense budget. – Lying to or otherwise manipulating other departments or offices within one’s company. Blowing the Whistle

25 25 Strategies for Success Making ethical decisions: A quick ethics test from Texas Instruments: 1. Is it legal? 2. Is it consistent with the company’s stated values? 3. If you do it, will you feel bad? 4. How would it look in the newspapers? 5. Do you think it’s wrong? 6. If you’re not sure—ask. 7. If you don’t get a clear answer, keep asking until you do.

26 26 Becoming culturally aware of ethical conduct: 1. Look closely at the situation. 2. Evaluate the intentions. 3. Explore your options. Strategies for Success


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