Ch 3: Business Ethics and Social Responsibility Day 1: Business Ethics

Today’s Response Journal List a minimum of 3 products and/or services that you consider unethical or morally wrong to sell? Provide a reason why you think these products are unethical. ***Save as Sept. 23 and in your Response Journal Folder***

What would you do in each of the following situations? Ethics What would you do in each of the following situations? Your friend asks you to add a few extra hours to a work time sheet for him, but you know that he did not put in the time. A salesperson in an electronics store offers to sell you an iPod after hours at a discount price. You are aware that the teller gave you back too much money when completing a banking transaction.

Ethics ____________ are the rules that help us tell the difference between right and wrong, and encourage us to do the right thing They can help people decide on the best course of action in situations where they aren’t sure what to do Ethics

Ethical Behaviour Ethical behaviour is behaviour that conforms to ethics - individual beliefs and social standards about what is right and good Ethics are important for getting along with others, living with yourself and having a good character Ethical behaviour is based on values such as: Trustworthiness Respect Responsibility Caring Justice Good citizenship Adherence to moral rules

Values and Morals Our ___________ tell us what we think is important and this, in turn, helps us make decisions about right and wrong E.g. a person who values trustworthiness is unlikely to betray a friend _____________ are the rules that are used to decide what is good or bad E.g. one moral rule might be that stealing is bad because it harms the person or business you are stealing from Values Morals

Values and Morals As a society, we tend to judge others more on their morals than on their values Some of the most difficult decisions to make are the ones in which our personal values conflict with our moral rules Read the example found in the bottom paragraph on page 75

Role of Ethics in Business Ethics are based on both individual beliefs and standards in society Ethics vary from person to person, situation to situation, and culture to culture Society’s ethics are usually _____________ standards for decency and respect of others _______________________ are related to both society’s ethics and the individual’s ethics, who works for and buys products from, the company Read the example in paragraph 1 on page 77 Minimum Business Ethics

Code of Ethics Businesses face ethical questions every day concerning the products/services they sell and the way they deal with people inside and outside the company A _____________________ is a document that describes specifically how a company’s employees should respond in different situations Read the example in paragraph 4 on page 77 Helps different people approach problems in the same way Code of Ethics

“If I take this action, will anyone suffer as a result?” Applying Ethics Instead of referring to a written guideline, you can ask yourself … “If I take this action, will anyone suffer as a result?” Read the example in paragraph 1 on page 79 In Canada, the law details acceptable business behaviour, but companies can still behave unethically without actually breaking the law Although codes of ethics can help people make decisions, they are not conclusive guides to right and wrong – as a result, people should rely on their own judgment first

Ethical Dilemmas Dilemma A _______________ is a situation where there is a difficult choice between 2 or more options Dilemmas have good and bad points on both sides Not all dilemmas are choices between right and wrong Read the example in paragraph 3 on page 79 An ______________________ is a moral problem with potential right or wrong answers. It occurs when a business has a decision to make that weighs values and morals against profitability and competitiveness Dilemma Ethical Dilemma

Examples of Ethical Dilemmas In the Workplace Downsizing of staff Pollution control How to dispose of toxic waste Depletion of scarce resources Changes in laws and technology Employee rights Product safety Discrimination against women and minorities

Resolving Ethical Dilemmas Resolving ethical dilemmas requires honesty, ability to work together, respect for others, willingness to learn, dependability, loyalty and integrity Questions to consider: Who will be helped by what you do? Who will be hurt? What are the benefits and problems of such a decision? Will the decision survive the test of time?

Whistle-Blowing _____________________ is the decision of an employee to inform company officials or the public about a legal or ethical violation May happen when an employee discovers some type of unethical, immoral or illegal actions at work Sometimes whistle-blowers are rewarded (E.g. 3 whistle-blowers were named Time Magazine’s Person of the Year in 2002), however sometimes they are punished (E.g. getting fired or demoted) Whistle-Blowing

Whistle-Blowing Examples Examples of issues that a whistle-blower might report include; Someone submitting false info on an expense report A business that ignores hiring practices for minorities A business that ignores workplace health and safety rules

Day 1 – Assigned Work Students please complete the following; Activity: Ethics In the News (Posted on ClassNet under Tasks) Review Questions #4 & 5 on page 89

Ch 3: Business Ethics & Social Responsibility Day 2: Implications of Unethical Behaviour

Today’s Response Journal Create a list of businesses that come to mind when you think of unethical practices? What makes them unethical? ***Save as Sept. 25 and in your Response Journal Folder***

Major Ethical Issues In Business Read paragraph 1 on page 82 Some of the major ethical issues associated with business are: Fraud Accounting Scandals Insider Trading

Fraud _____________ is the crime of lying or pretending Some businesses mislead consumers and try to trick them into buying something in order to maximize their profits The Competition Act, 2002 banned the below types of fraud and deceptive business practices: False or misleading advertising Bait and switch selling Advertising a product on sale and then not having enough of the product available Double Ticketing Placing different prices on a product and selling it at the higher price

Types of Fraud There are many types of fraud that impact individuals and businesses … Bank Fraud A banking official makes a fraudulent loan to a non- existent business/person and pockets the cash Consumer Fraud Unethical advertising or false claims are used to make consumers purchase products they don’t need Contract Fraud Temptations, such as bribes or kickbacks are used to create a contract

Types of Fraud Insurance Fraud Mail Fraud Pyramid Scheme Fraud Falsely claiming lost, damaged or stolen property to receive insurance settlements Mail Fraud The post office is used to mail phony job opportunities, chain letters or inheritance scams Pyramid Scheme Fraud A person recruits others in order to receive more money than he/she invested in the scheme

Types of Fraud Stock Market Fraud Telemarketing Fraud Welfare Fraud Someone uses insider trading to buy and sell stocks at artificial values Telemarketing Fraud Company uses high-pressure phone calls to get customers to buy goods or donate money to phony charities Welfare Fraud Someone receives welfare benefits when they’re not eligible Read Bre-X on page 83 - 84

Accounting Scandals __________________ is the process of identifying, measuring, and communicating financial information about a business so that informed judgments and decisions can be made based on that info An _____________________________ is a publicly exposed crime involving accountants or senior company executives who alter accounting records for personal gain When an accounting scandal is uncovered, outside accountants are appointed to find out what happened A ___________________________ is an accountant who investigates legal and financial documents, looking for evidence of tampering Read Enron on page 87 - 88 Accounting Accounting Scandal Forensic Accountant

Insider Trading Wouldn’t it be great to have access to winning lottery numbers before they are drawn? In business, corporate executives normally do have access to winning lottery numbers – in the form of confidential info about the business and its future plans Buying or selling of company shares based on confidential information that is not available to the general public is known as _______________________ and is illegal The stock market operates on the premise that everyone learns about the same info at the same time and therefore no one gets an unfair advantage It is fine to buy and sell shares as long as you use information that is in the public domain and/or if you tell the stock exchange about it ahead of time Read the Martha Stewart example on page 88 Insider Trading

Day 2 – Assigned Work Students please complete the following; Activity: Canadian Anti-Fraud Centre (provided)

Ch 3: Business Ethics and Social Responsibility Day 3: Corporate Social Responsibility

Today’s Response Journal Create a list of businesses that come to mind when you think of ethical practices? What makes them ethical? ***Save as Sept. 26 and in your Response Journal Folder***

Corporate Social Responsibility (CSR) Businesses exhibit _______________________________________ through their values, their ethics, and the contributions that they make to their communities In other words, CSR has to do with … “What you do, how you do it and when and what you say” A socially responsible business provides goods and services in line with society’s values A socially responsible business is concerned about how they protect consumers and the treatment of their employees and shareholders Read the example in paragraph 2 on page 90 Corporate Social Responsibility (CSR)

CSR Principles Businesses that practice CSR adhere to the following CSR Principles … Provide a safe and healthy work environment Adopt fair labour policies Protect the environment Are truthful in their advertising Avoid price discrimination Donate to charity

CSR Principles The concept of business ethics and CSR have been around for some time, so wouldn’t most businesses have already adopted these guidelines? The answer – NO!!!! The news is filled with examples of unethical and illegal business practices The sad truth is that too many business people believe that normal business procedures mean dealing with ethics only when necessary, or not dealing with them at all Read An Example of CSR on page 92

Laws that Govern Corporate Ethics In Canada, we have many different laws that govern ethical behaviours in business. These laws relate to the following 6 major areas … Workplace safety Anti-discrimination issues Harassment Accessibility issues Environmental responsibility Labour practices

Workplace Safety The workplace use to be a place where people often died Read paragraphs 1, 2 & 3 on page 94 In Ontario, the Occupational Health and Safety Act (OHSA) was instituted to ensure workplace safety and health The OHSA ensures workplace health and safety is a priority for all businesses in Ontario The OHSA defines the rights and responsibilities of workers in Ontario

Worker’s Basic Rights Workers have the following 3 basic rights in the workplace … Right to refuse unsafe work Right to participate in workplace health and safety activities Right to know about actual hazards in the workplace

Anti-Discrimination Discrimination is NOT ethical behaviour Discrimination can be based on a person’s … Gender Race Religion Age Sexuality, etc Although businesses have come along way, many women and minorities still face discrimination in workplace today, usually in the form of a _________________ An invisible barrier facing women, disabled or those from visible minorities as they approach senior management positions Glass Ceiling

Harassment __________________ refers to those behaviours that are found to be threatening or disturbing, those that are not acceptable in society Many companies have policies and procedures in place for dealing with these types of situations Harassment

Harassment Examples of harassment include … Bullying Stalking Written or verbal threats Abusive comments about race Ridicule based on cultural grounds Name calling Racist jokes Damage to property Offensive graffiti

Accessibility Laws exist to help guide businesses by balancing the rights of the disabled to work and the rights of businesses to limit how much they need to do for disabled workers E.g. Business – built ramps and purchased alternative equipment. Disabled – right to receive a fair job interview that doesn’t discriminate Employers have a _______________________ An employer is obligated to take the appropriate steps to eliminate discrimination in the workplace Written into Canadian Human Rights Act Duty to Accommodate

Environmental Responsibility Both individuals and businesses are responsible for protecting the environment Sadly, it has taken much media attention to get environmental issues high on the list of priorities for many businesses Most environmental concerns can be categorized under _______, ________ or _________ The government of Canada has responded to environmental challenges by passing environmental protection laws, such as the Environmental Protection Act (1999) Land Air Water

Labour Practices In Ontario, the Employment Standards Act identifies mandatory minimum conditions of employment. It covers areas such as … Hours of work Overtime pay Minimum wage Holidays and vacations Equal pay for men and women Employee benefit plans Pregnancy Parental leave Severance and termination pay

Labour Practices - Pay Equity Pay equity is designed to ensure men and women are paid the same amount of money for the same work Pay equity legislation came into effect in 1978 However, this legislation still doesn’t mean that there is equal pay for work of equal value According to a recent study, women only earn 72 cents for every $1 earned by men

Labour Practices - Pay Equity Same Work is judged by assessing … The skill The effort The responsibility required The conditions under which work is performed

Labour Practices - Privacy Laws The Personal Information Protection and Electronic Documents Act (PIPEDA) came into effect January 1, 2004 This law requires that all provincially regulated businesses must fully explain __________ information they require from employees and customers and ________ they need it, before they can obtain it What Why

Fair Trade ____________ is the practice of helping producers in developing countries bypass middlemen so they can sell their goods in other countries for a ________ profit Fair trade is _____________, not required by law Fair trade started about 50 years ago E.g. fair trade coffee and chocolate Fair Trade products are always marked with a logo to identify them Fair Trade Fair Voluntary

Fair Trade The benefit of buying fair trade products is that you are not exploiting (taking advantage of) poor farmers in developing worlds Businesses can help the sale of fair trade products by … Enforcing fair trade practices on their suppliers Using fair trade products (E.g. coffee and tea) for business meetings

Day 3 – Assigned Work Students please complete the following; Read the Profile: Kicking Horse Coffee Co. on pages 73 -74 and answer the 2 questions Review Questions #8 on pg105