CH 4 Business Ethics and Social Responsibility Why is understanding business ethics and social responsibility important to you as a business person, consumer, and citizen?

Ch 4 Targets Define social responsibility issues. Explain business ethics. Explain the legal responsibility of business ethics. Give reasons why ethical behavior is good for business. List some important ethical questions. Explain how ethics is related to the consumer, employee, and society.

What is Ethics? Ethics Business ethics Set of moral principles by which people conduct themselves personally, socially, or professionally. Business ethics Set of laws about how a business should conduct itself. Legal Responsibility Social Responsibility Responsibility to Customers Responsibility to Employees

Graphic Organizer Important Ethical Questions ETHICAL DECISION Does it violate the law or policies? YES UNETHICAL NO What if everyone did this, but it’s bad? YES UNETHICAL NO Would this sacrifice long-term benefits for short-term gain? MAY BE UNETHICAL YES NO ETHICAL DECISION

Ethics as Good Business Affect your business indirectly Repeat customers High employee turnover Affect your business directly Fines

Legal Responsibility How do business make sure that their employees follow the laws? Code of Ethics Set of strict guidelines for maintaining ethics in the workplace.

Social Responsibility Duty to do what is best for the good of society. The ethical obligations of a business are to: Provide safe products Create jobs Protect the environment Contribute to the standard of living in society Conflict of Interest Business is tempted to put profits before social welfare

Responsibility to the Employees Businesses have a social responsibility to create jobs. Safe Working Conditions Equal Treatment Fair Pay

Responsibility to the Employees (Legal) Sweatshops Factories that pay workers poorly, are unhealthy, and treat workers badly Occupational Safety and Health Administration (OSHA) Division of the Department of Labor that sets and enforces work-related health and safety rules Equal Pay Act Requires that men and women be paid the same wages for doing equal work. Americans with Disabilities Act Bans discrimination against persons with physical or mental disability.

Social Responsibility: To Customers Food and Drug Administration (FDA) Government agency Protects consumers from dangerous or falsely advertised products The FDA governs advertising and labeling of over-the-counter medicines Consumer Product Safety Commission (CPSC) Protects consumer from dangerous consumer goods Oversees recalls involving Recalls.gov

Social Responsibility: To Society Environmental Protection Agency (EPA), 1970 Federal agency that enforces rules that protect the environment and control pollution.

Ch 4 Target Review Explain business ethics. Set of laws about how a business should conduct itself Explain the legal responsibility of business ethics. Business are responsible for the safety of employees Give reasons why ethical behavior is good for business. Most business rely on repeat customers Employees are loyal New customers

Ch 4 Target Review List some important ethical questions. Is this against the law? What if everyone did this? Am I sacrificing long term benefits for short term gains? Define social responsibility. Duty to do what is best for the society Explain how ethics is related to the consumer, employee, and society. Consumer – protection from dangerous or falsely advertised products Employee – create jobs with equal treatment Society – environmental protection

Activity Create a code of ethics to include in your business plan. Page 79 Guidelines for writing a code of ethics Be sure to include all 7 parts in your code (note it does not mean make a list) Look at other codes of ethics for ideas Student handbook is a ‘code of ethics’ Reviewed every year Includes how it will be enforced