Chapter 4 Lesson 1 Ethics in Business

What You’ll Learn Importance of business ethics How businesses should be ethical What laws relate to business ehtics

Initiation What would you do if you were a manager of a business that was acting unethical?

The Importance of Ethics What is ethics? Set of moral principles or values that govern behavior/choices. Businesses develop ethics to help them determine how to behave They reflect a company’s belief

Codes of Ethics The role of ethics in management decisions can be difficult Companies develop codes of ethics to help guide managers decisions What do you think should be included in this code? Create a list of principals that you think should appear on the codes. Example: Abiding by all laws Check your list with the example on pg 85. How did you match? More detailed example: Texas Instruments pg 86

Behaving Ethically Making unethical decisions as a manager will not only hurt a business but also your career. Example- Enron pg 87- http://vimeo.com/36001860 Ways employees act unethical Theft-embezzle money or steal products/supplies Lying about hours worked Falsifying records Sarbanes-Oxley Act of 2002: Contains rules affecting reporting and corporate governance of public companies and their officers/directors As a manager you will have to respond to unethical situations.

What Would You Do?

Laws Relating to Ethics in Business The Sherman Act: makes it illegal for companies to monopolize trade The Clayton Act: makes it illegal to charge different prices to different wholesale customers The Wheeler-Lea Act: bans unfair or deceptive acts or practices, including false advertising

Laws Relating to Ethics in Business Federal Food, Drug, and Cosmetic Act of 1938: bans the sale of impure, improperly labeled, falsely guaranteed, and unhealthful foods, drugs, and cosmetics Consumer Product Safety Commission (CPSC): establishes minimum product safety standards on consumer products Truth in Lending Act of 1968: creditors are required to let consumers know how much they are paying in finance charges and interest

Laws Relating to Ethics in Business Equal Credit Opportunity Act of 1975: prohibits creditors from making credit decisions on the basis of discriminatory practices The National Environmental Policy Act of 1969: created the EPA, whose mission is to protect human health and safeguard the air, water, and land

Laws Relating to Ethics in Business The Clean Air Act of 1970: comprehensive federal law that regulates air emissions The Toxic Substances Control Act of 1976: enacted to give the EPA the ability to track the 75,000 industrial chemicals currently produced in or imported into the United States The Clean Water Act of 1977: gives the EPA the authority to set standards on the type and quantity of pollutants that industries can put into bodies of water

Closing Exercise Complete the following statement: “Ethics is important because…”

Group Activity In groups of 2-4, develop a code of ethics for Wolcott High School Staff and Students Use your own ideas, ideas from the text (p.85), or other sources Type up your codes and be prepared to discuss them in class & submit for a grade