2. Chapter 6 – Business Ethics & Social Responsibility

3. Dignity & Professionalism in the Workplace Chapter 6--Ethics & Social Responsibility

4. Business Ethics vs. Old-Fashioned Greed and Arrogance: Adelphia—Misuse of corporate funds Arthur Andersen—Auditing irregularities Enron—Off-books partnerships to hide debts and losses Global Crossing—Deceptive accounting Merrill Lynch—Stock fraud Tyco—Misuse of corporate funds WorldCom—Hiding billions in expenses Xerox—Misstating revenues Martha Stuart—Insider trading

5. Law and Ethics Many times law and ethics are in conflict. LawEthics Let’s Discuss Let’s Discuss

6. Ethics Ideally speaking ethics is the first mechanism which would control business conduct. However, often in the workplace it does not control but is controlled. Law should be regard as a last resort after the market and self-regulation (ethics) have demonstrably failed.

7. Achieving An Ethical Business Corporation n The Obstacles u The emphasis on profit u The effect of the group n Steps to Take u Involvement of top management u Openness in Communication

8. Theories of Ethics b Ethical fundamentalism—People look to an outside source or central figure for ethical guidelines b Utilitarianism—People choose the alternative that would provide the greatest good to society b Kantian ethics—A set of universal rules based on reasoning establishes ethical duties b Rawls’s social justice theory—Moral duties are based on an implied social contract b Ethical relativism—Individuals decide what is ethical based on their own feelings about right and wrong b Formalism---Ethics measured by the “rightness” of rules. The moral person is a person of good will and ethical decisions are based on what is right, not on the consequences of those decisions.

9. Utilitarianism & Formalism b Utilitarianism: A brand of teleology in which the greatest good for the greatest number is the goal. b Formalism: Ethics measured by the “rightness” of rules. The moral person is a person of good will and ethical decisions are based on what is right, not on the consequences of those decisions.

10. Corporate Codes Corporate codes of conduct are common tools for organizations committed to ethical behavior. These codes are an attempt to set the base level for ethics in the organization. Code of business conduct are attempts to….

11. Let’s Not Forget----- n Social Responsibility costs money & there is always a debate as to who has a right to spend this money--the officers/directors or the stockholders…... Critics of Social Responsibility-- “It’s the duty of the directors & officers to mind the store--- not to give it away…”

12. Politics n Often, companies participate in lobbying This is a form of “Freedom of Speech” but can, and is regulated. It is not absolute. Often businesses can influence the election results indirectly by the amount of campaign contributions they give. This is very much a social issue. Should business “stay out” of politics completely?

13. JUDGE JUDY READY TO RULE---- Case: Florida League of Prof. Lobbyists v. Meggs---- State law preventing lobbyists from being paid on a contingencybasis is challenged as a violation of Free Speech….... Don’t utter a word... There is no “Free Speech” in my courtroom ….period!

14. Choice of Forum Clause