Business Ethics & Social Responsibility

							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 Business
 Ethical 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.                                  2-10
Sources of Unethical Behavior in Organizations

1. Overly aggressive financial or business
   objectives
2. Abusive & intimidating behavior
3. Conflict of interest
4. Fairness & honesty
5. Communications
6. Business relationships


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    Sources of Unethical Behavior
    Abusive and intimidating behavior




“




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Sources of Unethical Behavior in Organizations

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




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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

           Honesty?

 Have you ever
      cheated on exams?
   •copied documents from Internet
   •shoplifted
   •cheated to win at sports

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Ethical Concerns

            Communications


•False/misleading advertising
•Deceptive personal selling tactics
•Product safety and quality
•Unsubstantiated claims
•Product labeling

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Ethical Concerns

        Business Relationships



 •Relationships with customers
 •Relationships with suppliers
 •Relationships with co-workers


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Ethical Concerns

       Plagiarism




The act of taking someone else’s work
and presenting it as your own without
mentioning the source


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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

                        National Business Ethics Survey (NBES)




According to the NBES, employees in
organizations with written standards of conduct
are more likely to report misconduct when they
observe it.


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Codes of Ethics

       Whistleblowing



The act of an employee exposing an employer’s
wrongdoing to outsiders, such as the media or
government regulatory agencies.


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Business Ethics – Taking Responsibility




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Nature of Social Responsibility
 SR: A business’s obligation to maximize its positive
 impact and minimize its negative impact on society


4 Dimensions
 1.   Economic
 2.   Legal
 3.   Ethical
 4.   Voluntary (philanthropic)

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Pyramid of Social Responsibility




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Nature of Social Responsibility

 Corporate Citizenship


 The extent to which businesses meet the legal,
    ethical, economic, and voluntary
    responsibilities placed on them by their
    stakeholders.


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Nature of Social Responsibility

 Best (American)
 Corporate Citizens

 1.   Intel Corporation
 2.   Eaton Corporation
 3.   Nike Inc.
 4.   Deere and Co.
 See the top 20 list on page 53

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Arguments For and Against SR




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Social Responsibility Issues

 Owners & Stockholders



 •   Primary concern with profit or ROI
 •   Financial community at large
 •   Proper accounting procedures
 •   Protecting owner’s rights and investments

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Social Responsibility Issues

 Employee Relations


 •   Provide a safe workplace
 •   Adequate compensation
 •   Listen to grievances
 •   Fair treatment

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Social Responsibility Issues

 Consumer Relations


 Consumerism – the activities that independent
   individuals, groups, and organizations
   undertake to protect their rights as
   consumers.


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Social Responsibility Issues

 Environmental Issues


 • Animal rights
 • Pollution
 • Going Green


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Social Responsibility Issues

                           Community Relations



 •General community and global welfare
 •Hardcore unemployed
 •Charitable contributions (United Way)
 •Avon’s Breast Cancer Awareness Crusade

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