1. ****** 4-1 1-1 McGraw-Hill/Irwin Understanding Business, 8e © 2008 The McGraw-Hill Companies, Inc., All Rights Reserved. Nickels McHugh McHugh ** DemonstratingEthicalBehavior and Social Responsibility 4 CHAPTER * **

2. ****** 4-2 Ethics More Than Legality More Than Legality Standards are Fundamental Standards are Fundamental Ethics begins with each Ethics begins with each of us of us

3. ****** 4-3 Top U.S. Ethical Issues Source: CMO Magazine, October 2004

4. ****** 4-4 Ways to Prevent Unethical Behavior Source: CMO Magazine, Oct. 2004

5. ****** 4-5 Privacy Protectors Based on a Privacy Trust Score (PTS): Health care providers scored the highestHealth care providers scored the highest Grocery Stores and Department of Homeland Security (DHS) scored the lowestGrocery Stores and Department of Homeland Security (DHS) scored the lowest Democrats have higher PTS than all other political affiliationsDemocrats have higher PTS than all other political affiliations 81% of the respondents feel privacy is important or very important81% of the respondents feel privacy is important or very important Source: www.darwinmag.com, November 2003

6. ****** 4-6 Ethics of MBA Students Percent of MBA Students Who Would: Buy Stock on Inside Information52%Buy Stock on Inside Information52% Reveal Corp. Secrets to Spouse/Family50%Reveal Corp. Secrets to Spouse/Family50% Let a Gift Sway Purchasing Decision26%Let a Gift Sway Purchasing Decision26% Pay Someone Off to Close a 13%Pay Someone Off to Close a 13% Business Deal Source: USA Today

7. ****** 4-7 Most Popular Ways to Monitor Employees Internet (74%)Internet (74%) Background Exams (62%)Background Exams (62%) Store and Review Email (43%)Store and Review Email (43%) Store and Review Computer Files (31%)Store and Review Computer Files (31%) Videotape Employees (18%)Videotape Employees (18%) Source: USA Today

8. ****** 4-8 Ethics Check Questions: Is It Legal?Is It Legal? Is It Balanced?Is It Balanced? How Will It Make Me Feel About How Will It Make Me Feel About Myself? Myself?

9. ****** 4-9 Why Don’t We Trust Corporations? Source: USA Today

10. ****** 4-10 Factors Influencing Managerial Ethics Individual OrganizationalEnvironmental Values Values Work Background Work Background Family Status Family Status Personality Personality Top Level Mgmt. Philosophy Top Level Mgmt. Philosophy The Firm’s Reward System The Firm’s Reward System Job Dimensions Job Dimensions Competition Competition Economic Conditions Economic Conditions Social/Cultural Institutions Social/Cultural Institutions

11. ****** 4-11 Codes of Ethics Compliance-BasedCompliance-Based Integrity-BasedIntegrity-Based

12. ****** 4-12 Steps to Improve U.S. Business Ethics 1.Top management support 2.Employees’ understanding 3.Managers’ training 4.Ethics Office 5.Outsiders must be informed 6.Enforcement of ethics code

13. ****** 4-13 Levels of Corporate Social Responsibility Societal Responsibility Stakeholder Responsibility Profit Responsibility Owners/Stockholders GeneralPublic Customers Employees Suppliers/Distributors EcologicalEnvironment Public Interest Groups Source: Marketing, 5/E by Berkowitz, Kerin, Hartley, and Rudelius.

14. ****** 4-14 Corporate Responsibility (Percent of country’s top 100 companies that publish separate CR reports) Source: Financial Times, June 15, 2005

15. ****** 4-15 Social Audit CompanyCompany Outside Groups that serve as watchdogs:Outside Groups that serve as watchdogs: Socially-Conscious InvestorsSocially-Conscious Investors EnvironmentalistsEnvironmentalists Union OfficialsUnion Officials CustomersCustomers

16. ****** 4-16 International Ethics and Social Responsibility Ethical problems are Not Unique to the U.S. managersEthical problems are Not Unique to the U.S. managers Demand for Socially Responsible Behavior from Global SuppliersDemand for Socially Responsible Behavior from Global Suppliers Joint Initiative on Corporate Accountability and Workers’ RightsJoint Initiative on Corporate Accountability and Workers’ Rights Inter-American Convention Against CorruptionInter-American Convention Against Corruption

17. ****** 4-17 Best Company Reputation Johnson & Johnson (80.6)Johnson & Johnson (80.6) Coca-Cola (79.7)Coca-Cola (79.7) Google (79.5)Google (79.5) UPS (79.4)UPS (79.4) 3M (78.8)3M (78.8) Source: USA Today

18. ****** 4-18 Most Admired Global Companies 1.General Electric 2.Toyota 3.Procter & Gamble 4.FedEx 5.Johnson & Johnson 6.Microsoft 7.Dell 8.Berkshire Hathaway 9.Apple Computer 10.Wal-Mart Source: Fortune, 2006