Business Ethics & Social Responsibility

Learning Objectives Explain business ethics. Give reasons why ethical behavior is good for business. Define social responsibility. Describe the social responsibilities of businesses.

Why Is This Important? Understanding business ethics and social responsibility informs you of your rights as a consumer, employee, and citizen.

What Is Ethics? Ethics is the set of moral principles by which people conduct themselves personally, socially, or professionally. Business Ethics is a set of laws about how a business should conduct itself.

Legal Responsibility In order for any business to be successful, it must operate legally and humanely. The US government has independent agencies to protect society. OSHA – a department of Labor sets and enforces work-related health and safety rules. Independent agencies protect consumers, monitor broadcast communications, and address discrimination in the workplace. Businesses that fail to follow laws are subject to fines, lawsuits, and new regulations.

Code Of Ethics A set of strict guidelines for maintaining ethics in the workplace. Professional groups have their own code of ethics. Examples: doctors & lawyers Can cover everything from employee behavior to environmental safety.

Ethics as Good Business Unethical business practices affect your business. Violation of government regulations may incur fines or jail time. Violation of a companies code of ethics might get you fired or you may lose your license. Cheating customers or poor customer service impacts business by losing repeat customers. Treating employees poorly results in lose of workers and time wasted training new employees.

Important Ethical Questions Ethics involves an endless series of relationships – between buyer and seller, employer and employee, business and government, and business and society. When considering a questionable course of action, you have to ask yourself these important questions: Is it against the law? Does it violate company or professional policies? What if everyone did this? How would I feel if someone did this to me? Am I sacrificing long-term benefits for short-term gains?

Making Decisions on Ethical Issues Making ethical decisions is not a quick task but requires some hard thinking. Sort of like the decision making process. Steps for making ethical decisions: Identify the ethical dilemma. Discover a alternative actions. Decide who might be affected. List the probable effects of the alternatives. Select the best alternative.

Social Responsibility Social responsibility is the duty to do what is best for the good of society. The social responsibility of business takes into consideration all that businesses do or does not do to solve problems of society. Businesses have a ethical obligation to provide safe products, create jobs, protect the environment, and contribute to the overall standard of living in society. An ethical question in business occurs whenever there’s a conflict of interest.

Responsibility To Customers Customers are a business’s FIRST responsibility. Businesses should offer a good, safe product or service at a reasonable price. The Food & Drug Administration (FDA) protects consumers from dangerous or falsely advertised products.

Responsibility To Employees Businesses have a social responsibility to create jobs. Businesses encourage volunteerism to tackle societal problems. Businesses provide work experience for people who haven’t been successful in the workplace. (job placement programs) The government has also passed laws to protect workers in the workplace. Example: Equal Pay Act & Disabilities Act

Responsibility To Society Businesses have environmental responsibility. The Environmental Protection Agency (EPA) enforces rules that protect the environment and control pollution. More businesses today consider their social responsibility to be more important than ever.