1. BUSINESS ETHICS AND SOCIAL RESPONSIBILITY2
BUSINESS ETHICS AND SOCIAL RESPONSIBILITY
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2. Ethics in the Workplace
Beliefs about what’s right and wrong or good and bad
Ethical Behavior
Behavior conforming to individual beliefs and social norms about what’s right and good
Unethical Behavior
Behavior conforming to individual beliefs and social norms about what is defined as wrong and bad
Business Ethics
The ethical or unethical behaviors by employees in the context of their jobs
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3. Individual Values and Codes
Sources of Personal Codes of Ethics
Childhood responses to adult behavior
Influence of peers
Experiences in adulthood
Developed morals and values
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4. Business and Managerial Ethics
The standards of behavior that guide individual managers in their work
Ethics affect a manager’s behavior toward:
employees
the organization
other economic agents—customers, competitors, stockholders, suppliers, dealers, and unions
Ethical Concerns
Ambiguity (e.g., financial disclosure)
Global variation in business practices (e.g., bribes)
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5. Assessing Ethical Behavior
Simple Steps in Applying Ethical Judgments
Gather the relevant factual information
Analyze the facts to determine the most appropriate moral values
Make an ethical judgment based on the rightness or wrongness of the proposed activity or policy
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6. Assessing Ethical Behavior
Ethical Norms and the Issues They Entail
Utility: Does a particular act optimize the benefits to those who are affected by it? Do all relevant parties receive “fair” benefits?
Rights: Does the act respect the rights of all individuals involved?
Justice: Is the act consistent with what’s fair?
Caring: Is the act consistent with people’s responsibilities to each other?
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7. Company Practices and Business Ethics
Encouraging Ethical Behavior Involves:
Adopting written codes of conduct and establishing clear ethical positions for the conduct of business
Having top management demonstrate its support of ethical standards
Instituting programs to provide periodic ethics training
Establishing ethical hotlines for reporting and discussion of unethical behavior and activities
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8. FIGURE 2.2 Core Principles and Organizational Values
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9. Social Responsibility
The overall way in which a business attempts to balance its commitments to relevant groups and individuals (stakeholders) in its social environment
Organizational Stakeholders
Groups, individuals, and organizations that are directly affected by the practices of an organization and, therefore, have a stake in its performance
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10. FIGURE 2.3 Major Corporate Stakeholders
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11. The Stakeholder Model of Responsibility
Customers
Businesses strive to treat customers fairly and honestly
Employees
Businesses treat employees fairly, make them a part of the team, and respect their dignity and basic human needs
Investors
Businesses follow proper accounting procedures, provide information to shareholders about financial performance, and protect shareholder rights and investments
Suppliers
Businesses emphasize mutually beneficial partnership arrangements with suppliers
Local and International Communities
Businesses try to be socially responsible
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12. Contemporary Social Consciousness
The Concept of Accountability
The expectation of an expanded role for business in protecting and enhancing the general welfare of society
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13. Areas of Social Responsibility
Responsibility Toward the Environment
Controlling air, water, and land pollution
Properly disposing of toxic waste
Engaging in recycling
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14. Areas of Social Responsibility (cont’d)
Responsibility Toward Customers
Involves providing quality products and pricing products fairly
Consumerism
Social activism dedicated to protecting the rights of consumers in their dealings with businesses
Basic Consumer Rights
To possess safe products
To be informed about all relevant aspects of a product
To be heard
To choose what to buy
To be educated about purchases
To courteous service
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15. Consumer Rights (cont’d)
Unfair Pricing
Collusion: When two or more firms agree to collaborate on such wrongful acts as price fixing
Price gouging: Responding to increased demand with overly steep (and often unwarranted) price increases
Ethics in Advertising
Truth in advertising
Morally objectionable advertising
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16. Areas of Social Responsibility (cont’d)
Responsibility Toward Employees
Legal and social commitments to:
not practice illegal discrimination
provide a physically and socially safe workplace
provide opportunities to balance work and life
provide protection for whistleblowers (an employee who discovers and tries to put an end to a company’s unethical, illegal, or socially irresponsible actions by publicizing them)
Responsibility Toward Investors
Proper financial management (no insider trading)
Proper representation of finances
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17. K E Y T E R M S accommodative stance business ethics collusion
consumerism
defensive stance
ethical behavior
ethics
insider trading
managerial ethics
organizational stakeholders
social audit
social responsibility
unethical behavior
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