Essentials of the Legal Environment today, 5E Roger LeRoy Miller © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

Business ethics Chapter 3 © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

learning objectives What is business ethics, and why is it important? How do duty-based ethical standards differ from outcome-based ethical standards? What are five steps that a businessperson can take to evaluate whether his or her actions are ethical? How can business leaders encourage their employees to act ethically? What types of ethical issues might arise in the context of international business transactions? © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

The need for Business ethics Ethics is the study of right and wrong behavior. Whether an action is fair, right or just. In business, ethical decisions are the application of moral and ethical principles to the marketplace and workplace. © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

The need for Business ethics Why Is Studying Business Ethics Important? Profit maximization Rise of corporate citizenship Triple bottom line: a corporation’s profits, its impact on people, and its impact on the planet LO-1 © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

The need for business ethics The Importance of Ethics in Making Business Decisions Businesses should evaluate: Legal implications Public relations impact Safety risks for consumers and employees Financial implications Long-run profit maximization The Internet can ruin reputations Image is everything © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

The need for business ethics The Relationship of Law and Ethics Moral minimum: minimum degree of ethical behavior expected of a business firm, which is usually defined as compliance with the law. Ethics and company codes of ethics Ethical uncertainty and “grey areas” Make it difficult for companies to navigate and forecast. © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

Business ethics and social media Hiring Procedures Employers use of social media searches The Use of Social Media to Discuss Work-Related Issues Company guidelines for appropriate social media usage 2012 NLRB ruling Ethics in Reverse Employee ethics © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

Approaches to ethical reasoning Duty-Based Ethics Derived from religious or philosophical principles Religious ethical standards The principle of rights Kantian ethical principles LO-2 © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

Approaches to ethical reasoning Outcome-Based Ethics: Utilitarianism An action is ethical based on whether it produces the greatest good for the greatest number of people upon which it has an effect. If it affects the majority adversely, it is morally wrong. © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

Approaches to ethical reasoning Corporate Social Responsibility (CSR) Those who manage corporations should be accountable to society for their actions. Social aspects of CSR Corporate aspects of CSR Stakeholders: groups other than shareholders affected by corporate decisions © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

Making ethical business decisions People entering the global corporate community must be prepared to make hard decisions. A Systematic Approach Inquiry Discussion Decision Justification Evaluation LO-3 © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

Making ethical business decisions The Importance of Ethical Leadership Attitude of top management Commitment to ethical decision making Setting realistic production or sales goals Not accepting ethical transgressions of others Behavior of owners and managers The Sarbanes-Oxley Act Requires companies to set up confidential systems so that employees and others can “raise red flags” about suspected illegal or unethical auditing and accounting practices LO-4 © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

Global business ethics Employment Practices of Foreign Suppliers Many U.S. firms contract with companies in other nations to produce goods U.S. companies must remain aware of the practices of those foreign companies. LO-5 © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

Global business ethics The Foreign Corrupt Practices Act Prohibition against bribery of foreign officials FCPA does not permit “grease” payments to minor officials. Nor does FCPA prohibit payments to foreign officials which are lawful in that country. Accounting requirements FCPA prohibits anyone from making false statements to accountants or false entries in a record or account. © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.