1. * * Chapter Four Demanding Ethical and Socially Responsible Behavior McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.

2. * * Ethical Standards are Fundamental Ethics -- The standards of moral behavior. Behaviors that are accepted by society as right versus wrong. WHAT are ETHICS? LG1 4-2

3. * * Ethics Begins with Each of Us Ask yourself these questions:  Is it legal?  Is it balanced?  How will it make me feel about myself? FACING ETHICAL DILEMMAS LG2 4-3

4. * * Managing Businesses Ethically and Responsibly Trust between workers and managers must be based on fairness, honesty, openness and moral integrity. Leadership can help instill corporate values in employees. ETHICS START at the TOP LG3 4-4

5. * * Managing Businesses Ethically and Responsibly FACTORS INFLUENCING MANAGERIAL ETHICS IndividualOrganizationalEnvironmental Values Work Background Family Status Personality Top Level Management Philosophy Firm’s Reward System Job Dimensions Competition Economic Conditions Social/Cultural Institutions LG3 4-5

6. * * Setting Corporate Ethical Standards An increasing number of companies have adopted written codes of ethics. Compliance-Based Ethics Code -- Emphasize preventing unlawful behavior by increasing control and by penalizing wrongdoers. Integrity-Based Ethics Code -- Define the organization’s guiding values, create an environment that supports ethically sound behavior and stress a shared accountability among employees. ETHICS CODES LG4 4-6

7. * * Source: James Gehrke, Magnify Leadership & Development, November 2008. 1. Managers must communicate the organization’s vision on ethical behavior. 2. Organizations must have a code of ethics. 3. Policies have to be enforced regarding ethical offences. 4. Ethical responsibility must be taught to all employees. (continued) HOW to PREVENT UNETHICAL BEHAVIORS LG4 Setting Corporate Ethical Standards 4-7

8. * * Source: James Gehrke, Magnify Leadership & Development, November 2008. 5. Discussions of ethics must be included in the decision-making process. 6. Accountability must be taken seriously at all levels in the organization. 7. Organizations must act fast when a crisis occurs. 8. Employees must know they have to defend and maintain the company’s reputation. HOW to PREVENT UNETHICAL BEHAVIORS LG4 Setting Corporate Ethical Standards 4-8

9. * * Corporate Social Responsibility Corporate Social Responsibility (CSR) -- The concern businesses have for the welfare of society. CSR is based on a commitment to integrity, fairness, and respect. CSR proponents argue that businesses owe their existence to the societies they serve and cannot exist in societies that fail. CORPORATE SOCIAL RESPONSIBILITY LG5 4-9

10. * * Corporate Social Responsibility Corporate Responsibility -- Includes everything from hiring minority workers to making safe products, minimizing pollution, using energy wisely, and providing a safe work environment. Corporate Policy -- The position a firm takes on social and political issues. CORPORATE RESPONSIBILITY and POLICY LG5 4-10

11. * * Responsibility to Customers The Right to Safety The Right to be Informed The Right to Choose The Right to be Heard PRESIDENT KENNEDY’S BASIC RIGHTS of CONSUMERS LG5 4-11

12. * * Responsibility to Employees Create jobs and provide a chance for upward mobility. Treat employees with respect. Offer salaries and benefits that help employees reach their personal goals. RESPONSIBILITY to EMPLOYEES LG5 4-12

13. * * Source: Fortune, www.fortune.com, March 22, 2010.www.fortune.com 1. Apple 2. Google 3. Berkshire Hathaway 4. Johnson & Johnson 5. Amazon 6. Proctor & Gamble 7. Toyota 8. Goldman Sachs 9. Wal-Mart 10. Coca-Cola 11. Microsoft 12. Southwest Airlines 13. FedEx 14. McDonald’s 15. IBM 16. General Electric 17. 3M 18. J.P. Morgan Chase 19. Walt Disney 20. Cisco Responsibility to Employees AMERICA’S MOST ADMIRED COMPANIES LG5 4-13

14. * * Responsibility to Society and the Environment Environmental efforts may increase costs but can offer good opportunities. The emerging renewable-energy and energy- efficiency industries account for 9 million U.S. jobs. RESPONSIBILITY to the ENVIRONMENT LG5 By 2030, as many as 40 million “Green” jobs will be created. 4-14