Business Ethics & Social Responsibility
Business Ethics – principles and standards that determine acceptable conduct in business
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A Timeline of Ethical and Socially Responsible Concerns
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Business Ethics & Social Responsibility
Social responsibility– business’s obligation to maximize its positive impact and minimize its negative impact on society
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Business Ethics & Social Responsibility
Laws and regulations encourage businesses to conform to society’s standards, values, and attitudes. (E.g., in USA:Sarbanes-Oxley Act – 2002)
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The Role of Ethics in Business
Concern about unethical business practices continue –
HealthSouth’s accounting improprieties and securities fraud
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The Role of Ethics in Business
Unethical and/or Illegal•Accounting fraud•Deceptive advertising•Unfair competitive practices•Internet theft
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The Role of Ethics in BusinessEthical Conduct
•Builds trust•Promotes confidence•Validates relationships
Learn how to recognize and resolve ethical issues
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Recognizing Ethical Issues in Business
Ethical issue – an identifiable problem,
situation, or opportunity that requires a person to choose from among several actions that may be evaluated as right or wrong, ethical or unethical.
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Recognizing Ethical Issues in Business
How to judge the ethics of a situation –
examine the situation from your stakeholders’ position, including customers and competitors
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Types and Incidences of Observed Misconduct
Many business issues may seem straightforward and easy to resolve on the surface, but are in reality very complex.
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1. Overly aggressive financial or business objectives
2. Abusive & intimidating behavior3. Conflict of interest4. Fairness & honesty5. Communications6. Business relationships
Sources of Unethical Behavior in Organizations
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Sources of Unethical BehaviorAbusive and intimidating behavior
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Conflict of interest – – the most common ethical issue identified
by employees.– Advance personal interests over others’
interests– Benefit self at the expense of the company
Sources of Unethical Behavior in Organizations
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Least Corrupt Countries
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Business Ethics
Fairness & honesty – the heart of business ethics
•How employees use resources•No harm to customers•Accurate representations•Disclosure
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Business Ethics
Most Popular Office Supplies Employees Pilfer
“More Employees Taking Supplies,” The News Journal
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Personal Ethics
Have you ever cheated on exams?
•copied documents from Internet•shoplifted•cheated to win at sports
Honesty?
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Ethical Concerns
•False/misleading advertising•Deceptive personal selling tactics•Product safety and quality•Unsubstantiated claims•Product labeling
Communications
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Ethical Concerns
•Relationships with customers•Relationships with suppliers•Relationships with co-workers
Business Relationships
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Ethical Concerns
The act of taking someone else’s work and presenting it as your own without mentioning the source
Plagiarism
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Making Decisions About Ethical Issues
Questions to Consider in Determining Whether an Action Is Ethical
Open discussion of ethical issues does not eliminate ethical problems; it does promote trust and learning in an organization. 2-21
Improving Ethical Behavior in Business
Ethical decisions in an organizations are influenced by three key factors
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Improving Ethical Behavior in Business
Codes of Ethics – Formalized rules and standards that describe what a company expects of its employees.
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Codes of Ethics
According to the NBES, employees in organizations with written standards of conduct are more likely to report misconduct when they observe it.
National Business Ethics Survey (NBES)
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Codes of Ethics
The act of an employee exposing an employer’s wrongdoing to outsiders, such as the media or government regulatory agencies.
Whistleblowing
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Business Ethics – Taking Responsibility
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Nature of Social Responsibility
1. Economic2. Legal3. Ethical4. Voluntary (philanthropic)
4 Dimensions
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SR: A business’s obligation to maximize its positive impact and minimize its negative impact on society
Pyramid of Social Responsibility
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Nature of Social Responsibility
The extent to which businesses meet the legal, ethical, economic, and voluntary responsibilities placed on them by their stakeholders.
Corporate Citizenship
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Nature of Social Responsibility
1. Intel Corporation2. Eaton Corporation3. Nike Inc.4. Deere and Co.See the top 20 list on page 53
Best (American) Corporate Citizens
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Arguments For and Against SR
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Social Responsibility Issues
• Primary concern with profit or ROI• Financial community at large• Proper accounting procedures• Protecting owner’s rights and investments
Owners & Stockholders
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Social Responsibility Issues
• Provide a safe workplace• Adequate compensation• Listen to grievances• Fair treatment
Employee Relations
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Social Responsibility Issues
Consumerism – the activities that independent individuals, groups, and organizations undertake to protect their rights as consumers.
Consumer Relations
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Social Responsibility Issues
• Animal rights• Pollution• Going Green
Environmental Issues
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Social Responsibility Issues
•General community and global welfare•Hardcore unemployed•Charitable contributions (United Way)•Avon’s Breast Cancer Awareness Crusade
Community Relations
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