© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter Two Ethics and Social Responsibility 2 | 1 PRIDE HUGHES KAPOOR INTRODUCTION TO BUSINESS ELEVENTH EDITION

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Learning Objectives 1. Understand what is meant by business ethics 2. Identify the types of ethical concerns that arise in the business world 3. Discuss the factors that affect the level of ethical behavior in organizations 4. Explain how ethical decision making can be encouraged 5. Describe how our current views on the social responsibility of business have evolved 6. Explain the two views on the social responsibility of business and understand the arguments for and against increased social responsibility 2 | 2

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Learning Objectives (cont’d) 7. Discuss the factors that led to the consumer movement and list some of its results 8. Analyze how present employment practices are being used to counteract past abuses 9. Describe the major types of pollution, their causes, and their cures 10. Identify the steps a business must take to implement a program of social responsibility 2 | 3

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Business Ethics Defined  Define Ethics and Business Ethics  Know and be able to discuss the principal business ethics issues Fairness and Honesty Organizational Relationships Conflict of Interest Communications 2 | 4

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Factors Affecting Ethical Behavior  Be able to discuss the three factors affecting ethical behavior Individual Factors Social Factors Opportunity  What influences are at play in each of these factors? 2 | 5

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Encouraging Ethical Behavior  Be able to discuss ways of encouraging ethical behavior External to a specific organization Within an organization -Code of ethics -Organizational environment Whistle-blowing  How do firms define acceptable behavior? 2 | 6

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Social Responsibility  What is Social Responsibility? How is it different from ethics? Why is it good business?  What are the Guidelines for Making Ethical Decisions? (Five steps) 2 | 7

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Evolution of Social Responsibility in Business  Be able to discuss the evolution of social responsibility in business Early 1900s -What does Caveat Emptor mean? What does it have to do with social responsibility? -What was the prevailing view on the importance of social responsibility? The Great Depression and Beyond -What happened during the 20 th and 21 st centuries to change views on government responsibility and social responsibility? 2 | 8

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Two Views of Social Responsibility  Be able to compare and contrast the two views of social responsibility Economic Model Socioeconomic Model  What are the primary emphases of each model?  What are differences between the two? 2 | 9

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Social Responsibility and Consumerism  Be able to discuss the principal arguments for and against increased social responsibility that are outlined in the book Why is there no consensus on the importance of social responsibility in business?  Define Consumerism What are the Six Basic Rights of Consumers? Be able to name and discuss the importance of the major 20 th century legislation protecting consumers 2 | 10

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Major Federal Legislation Protecting Consumers Since | 11  Federal Hazardous Substances Labeling Act (1960)  Kefauver-Harris Drug Amendments (1962)  Cigarette Labeling Act (1965)  Fair Packaging and Labeling Act (1966)  Motor Vehicle Safety Act (1966)  Truth in Lending Act (1968)  Credit Card Liability Act (1970)  Fair Credit Reporting Act (1971)  Consumer Product Safety Commission Act (1972)  Fair Credit Billing Act (1974)  Equal Credit Opportunity Act (1974)  Magnuson-Moss Warranty-Federal Trade Commission Act (1975)  Amendments to Equal Credit Opportunity Act (1976, 1994)  Fair Debt Collection Practices Act (1977)  Nutrition Labeling and Education Act (1990)  Telephone Consumer Protection Act (1991)  Consumer Credit Reporting Reform Act (1997)  Children’s Online Privacy Protection Act (2000)  Do Not Call Implementation Act (2003)  Credit Card Accountability, Responsibility, and Disclosure Act (2009)

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Employment Practices  How have employment practices changed since the mid-20 th century?  How has the workforce changed?  What laws exist to protect workers?  What abuses are still problematic? 2 | 12

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Employment Practices  Define Minority  How do Income Levels differ between different ethnic groups and men and women?  What is Affirmative Action? What does it seek to achieve? What are the downsides?  Who are the Hardcore Unemployed? What programs exist to help this group? 2 | 13

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Concern for the Environment  Define Water Pollution Air Pollution Land Pollution Noise Pollution  What is the Environmental Protection Agency (EPA)?  Be able to discuss what safeguarding the environment requires  Be able to list and describe the most important environmental laws 2 | 14

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Major Environmental Laws  National Environmental Policy Act (1970)  Clean Air Amendment (1970)  Water Quality Improvement Act (1970)  Resource Recovery Act (1970)  Water Pollution Control Act Amendment (1972)  Noise Control Act (1972)  Clean Air Act Amendment (1977)  Resource Conservation and Recovery Act (1984)  Clean Air Act Amendment (1987)  Oil Pollution Act (1990)  Clean Air Act Amendments (1990)  Food Quality Protection Act (1996)  American Recovery and Reinvestment Act (2009) 2 | 15

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Who Should Pay for a Clean Environment?  Who pays for pollution clean-ups?  Who should pay?  Why is preventing pollution so problematic?  Is paying for a clean environment a cost of doing business or not?  Should consumers be responsible for cleaning up the environment? 2 | 16

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Implementing a Program of Social Responsibility  Discuss the steps that go into developing a program of social responsibility for an organization  How are social responsibility initiatives funded? 2 | 17