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Ethics, Corporate Responsibility, and Sustainability

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1 Ethics, Corporate Responsibility, and Sustainability
Chapter Five Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

2 Learning Objectives LO1 Describe how different ethical perspectives guide decision making LO2 Explain how companies influence their ethics environment LO3 Outline a process for making ethical decisions LO4 Summarize the important issues surrounding corporate social responsibility LO5 Discuss reasons for businesses’ growing interest in the natural environment LO6 Identify actions managers can take to manage with the environment in mind

3 Ethics Ethics The system of rules that governs the ordering of values

4 It’s a Personal Issue If the employer pays for the computer and the time you spend sitting in front of it, is it ethical for you to use the computer to do tasks unrelated to your work?

5 Ethics Ethical issue Business ethics
Situation, problem, or opportunity in which an individual must choose among several actions that must be evaluated as morally right or wrong Business ethics The moral principles and standards that guide behavior in the world of business.

6 Caux Principles Kyosei Human dignity
living and working together for the common good, allowing cooperation and mutual prosperity to coexist with healthy and fair competition Human dignity concerns the value of each person as an end, not a means to the fulfillment of others’ purposes

7 Ethical Systems Egoism
An ethical system defining acceptable behavior as that which maximizes consequences for the individual

8 Ethical Systems Kohlberg’s model of cognitive moral development
Perspective that what is moral comes from what a mature person with “good” moral character would deem right.

9 Business Ethics Ethical climate
In an organization, the processes by which decisions are evaluated and made on the basis of right and wrong

10 Danger Signs Excessive emphasis on short-term revenues over longer-term considerations. Failure to establish a written code of ethics. A desire for simple, “quick fix” solutions to ethical problems. An unwillingness to take an ethical stand that may impose financial costs.

11 Danger Signs (cont.) Consideration of ethics solely as a legal issue or a public relations tool Lack of clear procedures for handling ethical problems. Responding to the demands of shareholders at the expense of other constituencies

12 A Process for Ethical Decision Making
Figure 5.1

13 Corporate Social Responsibility
Economic responsibilities To produce goods and services that society wants at a price that perpetuates the business and satisfies its obligations to investors. Legal responsibilities To obey local, state, federal, and relevant international laws

14 Corporate Social Responsibility
Ethical responsibilities Meeting other social expectations, not written as law.

15 Ecocentric Management
Goal is the creation of sustainable economic development and improvement of quality of life worldwide for all organizational stakeholders.

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