© Prentice Hall, 2007 Excellence in Business, 3e Chapter 2 - 1

Ethics and Social Ethics and Social ResponsibilityResponsibility

© Prentice Hall, 2007 Excellence in Business, 3e Chapter 2 - 2

Ethics in the Ethics in the WorkplaceWorkplace

Contemporary BusinessContemporary BusinessContemporary BusinessContemporary Business

Social ResponsibilitySocial ResponsibilitySocial ResponsibilitySocial Responsibility Ethical BehaviorEthical BehaviorEthical BehaviorEthical Behavior

PrinciplesPrinciples StandardsStandardsProfitsProfits SocietySociety

© Prentice Hall, 2007 Excellence in Business, 3e Chapter 2 - 3

Corporate FraudCorporate Fraud

Arthur AndersenArthur Andersen

EnronEnron

Marsh & McLennanMarsh & McLennan

WorldComWorldCom

Ford & FirestoneFord & Firestone

© Prentice Hall, 2007 Excellence in Business, 3e Chapter 2 - 4

What is Ethical Behavior?What is Ethical Behavior?

Competing FairlyCompeting Fairlyand Honestlyand Honestly

CommunicatingCommunicatingTruthfullyTruthfully

Not Harming OthersNot Harming Others

© Prentice Hall, 2007 Excellence in Business, 3e Chapter 2 - 5

Factors InfluencingFactors InfluencingEthical BehaviorEthical Behavior

Cultural DifferencesCultural Differences

KnowledgeKnowledge

Corporate BehaviorCorporate Behavior

Reporting SystemsReporting Systems

© Prentice Hall, 2007 Excellence in Business, 3e Chapter 2 - 6

Making Ethical DecisionsMaking Ethical Decisions

PhilosophicalPhilosophicalApproachesApproachesIs It Ethical?Is It Ethical? StakeholderStakeholder

IssuesIssues

UtilitarianismUtilitarianismUtilitarianismUtilitarianism

Individual, LegalIndividual, Legaland Human Rightsand Human RightsIndividual, LegalIndividual, Legal

and Human Rightsand Human Rights

Principles Principles of Justiceof JusticePrinciples Principles of Justiceof Justice

Legality Legality and Balanceand Balance

Legality Legality and Balanceand Balance

AcceptabilityAcceptabilityAcceptabilityAcceptability

FeasibilityFeasibilityFeasibilityFeasibility

OutsidersOutsidersOutsidersOutsiders

SupervisorsSupervisorsSupervisorsSupervisors

EmployeesEmployeesEmployeesEmployees

© Prentice Hall, 2007 Excellence in Business, 3e Chapter 2 - 7

Ethical SituationsEthical Situations

Ethical Ethical DilemmaDilemma

Ethical Ethical LapseLapse

© Prentice Hall, 2007 Excellence in Business, 3e Chapter 2 - 8

EarlyEarly2020thth Century Century

MiddleMiddle2020thth Century Century

EarlyEarly2121stst Century Century

MaximizeMaximizeProfitsProfits

Provide JobsProvide Jobsand Pay Taxesand Pay Taxes

Balance EthicsBalance Ethicsand Profitsand Profits

Social Responsibility in Business

© Prentice Hall, 2007 Excellence in Business, 3e Chapter 2 - 9

Percentage of Executives Who “Strongly Agree” or “Agree” That Companies Should:Percentage of Executives Who “Strongly Agree” or “Agree” That Companies Should:

•Be environmentally responsible

•Be ethical in operations

•Earn profits

•Employ local residents

•Pay taxes

•Encourage and support employee volunteering

•Contribute money and leadership to charities

•Be involved in economic development

•Be involved in public education

•Involve community representatives in business decisions

•Target a portion of purchasing toward local vendors

•Help improve quality of life for low-income populations

•Be environmentally responsible

•Be ethical in operations

•Earn profits

•Employ local residents

•Pay taxes

•Encourage and support employee volunteering

•Contribute money and leadership to charities

•Be involved in economic development

•Be involved in public education

•Involve community representatives in business decisions

•Target a portion of purchasing toward local vendors

•Help improve quality of life for low-income populations

PercentagePercentage

100

100

96

94

94

89

85

75

73

62

61

54

100

100

96

94

94

89

85

75

73

62

61

54

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Balancing Business Balancing Business and Stakeholders’ Rightsand Stakeholders’ Rights

BusinessBusiness

Safe Safe ProductsProducts

Product Product ChoiceChoice

ConsumersConsumers

Informed Informed PurchasePurchase

EmployeesEmployees

EquityEquityHealth & SafetyHealth & Safety

InvestorsInvestors

ProfitsProfitsFair DisclosureFair Disclosure

SocietySociety

CleanCleanEnvironmentEnvironment

© Prentice Hall, 2007 Excellence in Business, 3e Chapter 2 - 11

CorporateCorporateSocial ResponsibilitySocial Responsibility

Social AuditsSocial AuditsSocial AuditsSocial Audits Cause-RelatedCause-RelatedMarketingMarketing

Cause-RelatedCause-RelatedMarketingMarketing PhilanthropyPhilanthropyPhilanthropyPhilanthropy

RecyclingRecyclingProgramsProgramsRecyclingRecyclingProgramsPrograms

MedicalMedicalResearchResearchMedicalMedical

ResearchResearch Worthy CausesWorthy CausesWorthy CausesWorthy Causes

CharitiesCharitiesCharitiesCharities HumanitarianHumanitarianAidAid

HumanitarianHumanitarianAidAid

EducationEducationEducationEducation

© Prentice Hall, 2007 Excellence in Business, 3e Chapter 2 - 12

Responsibility to Society Responsibility to Society and the Environmentand the Environment

Natural Resourcesand Pollution

Natural Resourcesand Pollution

Environmental Activism

Environmental Activism

BusinessBusiness EnvironmentEnvironment ConsumersConsumers

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Pervasiveness of Pervasiveness of PollutionPollution

Industrial Discharges

Vehicle Emissions

Chemical Spills

© Prentice Hall, 2007 Excellence in Business, 3e Chapter 2 - 14

Government Efforts Government Efforts to Reduce Pollutionto Reduce Pollution

Global Warming

Clean Water Act

EPA Superfund

Clean Air Act

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Business EffortsBusiness Effortsto Reduce Pollutionto Reduce Pollution

Environmental IssuesEnvironmental Issues

Environmental StaffEnvironmental Staff

Performance ExpectationsPerformance Expectations

Performance RewardsPerformance Rewards

Long-Term CostLong-Term Cost

Product DevelopmentProduct Development

Supplier ExpectationsSupplier Expectations

Training and AwarenessTraining and Awareness

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Responsibility Responsibility Toward ConsumersToward Consumers

Freedom of ChoiceFreedom of Choice

Right to Be HeardRight to Be Heard

Accurate InformationAccurate Information

Product SafetyProduct Safety

© Prentice Hall, 2007 Excellence in Business, 3e Chapter 2 - 17

Responsibility Responsibility Toward InvestorsToward Investors

Fair ProfitFair ProfitDistributionDistributionFair ProfitFair Profit

DistributionDistributionEthicalEthical

BehaviorBehaviorEthicalEthical

BehaviorBehaviorSocialSocial

ResponsibilityResponsibilitySocialSocial

ResponsibilityResponsibility

Chapter 2 - 18Excellence in Business, 3e© Prentice Hall, 2007

Responsibility TowardResponsibility TowardEmployeesEmployees

Equal EmploymentEqual EmploymentOpportunityOpportunity

AffirmativeAffirmativeActionAction

OccupationalOccupationalHealth and SafetyHealth and Safety

Americans withAmericans withDisabilities ActDisabilities Act

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Global Ethics and Social Global Ethics and Social ResponsibilityResponsibility

Bribery

Environmental Abuse

Unscrupulous Business Practices