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Achieving Business Success by Demonstrating Ethical Behavior and

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					Achieving Business Success by
Demonstrating Ethical Behavior
  and Social Responsibility


           Chapter 2




                                 1
            LEARNING GOALS
• 1-The Concepts of business ethics and social
  responsibility.
• 2-The factors that influence individual ethics and
  common ethical dilemmas in the workplace.
• 3-How organizations shape ethical behavior.
• 4-The ways in which government regulation affects
  business ethics and social responsibility
• 5-The responsibilities of business to the general
  public,customers,and employees
• 6-Why investors and financial community are
  concerned with business ethics.
• 7-The ethical and social responsibility issues facing
  businesses in the global marketplace.                   2
                Business Ethics
• The standards of conduct and moral values governing
  actions and decisions in the work environment.
• Business also must take a wide range of social issues
  into account,including how a decision will affects the
  environment,employees,and customer.
• Social responsibility is a related term refers to the
  philosophies,policies,procedure,and actions directed
  toward the enhancement of society’s welfare as a
  primary objective.


                                                       3
                 Business Ethics
• Businesses must find the delicate balance between doing
  what is right and doing what is profitable.
• When that balance is skewed,they can experience serious
  consequences.
• In business,as in life,deciding what is right or wrong in a
  given situation is not always a clear-cut choice.
• Businesses have many responsibilities to customers,to
  employees,to investors,and to a society as a whole.
• Sometimes conflicts arise in trying to serve the divergent
  needs of separate constituencies.

                                                         4
Forces Shaping Business Ethics and
       Social Responsibility
• Four main forces shape business ethics and social
  responsibility:
• Individual,
• Organizational,
• Legal,
• Societal forces.
• Each of the forces interacts with the other
  three,and the interactions powerfully impact both
  the strength and direction of each influence.
                                               5
    FORCES SHAPING BUSINESS ETHICS
      AND SOCIAL RESPONSIBILITY
•
       Individual            Organizational

                    Forces



       Legal                     Societal

                                              6
• The discussion of business ethics begins by
  focusing on individual ethics.

• Business ethics are shaped by the ethical climate
  within an organization.

• Codes of conduct and ethical standards play
  increasingly significant roles in businesses where
  doing the right thing is both supported and
  applauded.

                                                 7
INDIVIDUAL BUSINESS ETHICS
• In today’s business environment,individuals can
  make the difference in ethical expectations
  and behavior.
• As we,executives,managers,and employees
  demonstrate our personal ethical principles-or
  lack of ethical principles-the expectations and
  actions of those who work for us,as well as
  those who work with us,can change.


                                              8
• Individuals typically develop ethical standards
  in the three stages .
• Stage 1:Preconventional
• Individuals is mainly looking out for his or her
  own interests.Rules are followed only out of
  fear of punishment or hope of reward.
• Stage 2:Conventional:
• Individual considers the interests and
  expectations of others in making
  decisions.Rules are followed because it is a part
  of belonging to the group.
                                                9
• Stage 3:
• Individual follows personal principles for
  resolving ethical dilemmas.He or she considers
  personal,group,and societal interests.A person’s
  family,educational,cultural,and religious
  backgrounds can play a role.
• We have different styles of deciding ethical
  dilemmas,no matter what our stage of moral
  development.
• One study suggests that men and women tend to
  use different techniques for resolving ethical
  situations.
                                               10
      ETHICAL GENDER GAP
 Typical Ways Men Resolve Ethical Dilemmas:
• 1-Primarily respects Rights.
• 2-Ask”Who is Right”
• 3-Value Decisiveness
• 4-Make Unambiguous Decisions
• 5-Seek solutions that are objectively fair
• 6-Rely on rules
• 7-Are guided by logic
• 8-Accept Authority
                                          11
      ETHICAL GENDER GAP
Typical Ways Women Resolve Ethical Dilemmas:
1-Primarily Respect Feelings
2-Ask”Who will be Hurt”?
3-Avoid being Judgmental
4-Seek solutions that minimize hurt
5-Rely on communication
6-Are guided by emotion
7-Challenge Authority


                                               12
Common Business Ethical Dilemmas
•             Honesty
•               and
•            Integrity

• Conflict               Whistle-Blowing
• Of
• Interest

•             Loyalty
•             Versus
•             Truth
                                           13
       Common Business Ethical
            Dilemmas
• 1-Conflict of Interest:A conflict of interest exists
  when a businessperson is faced with a situation where
  his or her decision may be influenced by the potential
  for personal gain.
  Bribes are one type of conflict of interest.
  2-Honesty and Integrity: Honesty and integrity
  are traits highly valued by employers.Honesty is an
  ethical principle that permeates work
  situations.Integrity means doing what you say you will
  do and accepting responsibility for mistakes.
                                                    14
• 3-Loyalty versus Truth:Business people expect their
  employees to be loyal and to act in the best interests of
  the company.An ethical conflict can arise,however,when
  individuals must decide between loyalty to the company
  and truthfulness in business relationships.
• 4-Whistle-Blowing:When an individual does encounter
  unethical or illegal actions at work,he or she must
  decide what action to take.Whistle-blowing is the term
  for an employee’s disclosure to the media or
  government authorities of illegal,immoral,or unethical
  practices of the organization.
• Whistle-blowing and other ethical issues arise relatively
  infrequently in firms with strong organizational climates
  of ethical behavior.

                                                      15
INTEGRITY:
Doing what you say you will do and
accepting responsibility for mistakes




                                        16
Structure of an Ethical Environment

         Ethical Leadership


           Ethical Action

          Ethical Reasoning

          Ethical Awareness
                                 17
     Regulation of Competition
• Competition is the cornerstone of a private
  enterprise economy.
• In a regulated industry,competition is either
  limited or eliminated,and close government
  control is substituted for free competition.
• The second form of government regulation
  is,enactment of statutes,has led to both state and
  federal laws that affect competition and various
  commercial practices.(USA).
• Regulated Industry:An Industry in which
  competition is either limited or eliminated,and
  government monitoring substitutes for market
  control.
                                                       18
• Deregulation:the movement toward eliminating
  legal restraints on competition in various
  industries,has significantly reshaped the legal
  environment for many industries in the last two
  decades.
• Government Regulation of Cyberspace:The
  internet is a borderless market;for it to function
  as a global marketplace,governments must work
  together to develop a stable economic and legal
  environment in which firms can operate
  freely,regardless of jurisdiction.

                                                 19
• Policies such as encryption (coding)of sensitive
  information,regulation,and electronic payments
  can’t be decided separately by each country.
• Acting Responsibility to satisfy society:
• An important issue affecting business is the
  question of social responsibility.In a general
  sense,social responsibility is management's
  acceptance of the obligation to consider
  profit,consumer satisfaction,and societal well-
  being of equal value in evaluating the firm’s
  performance.
                                                20
• Social responsibility is the recognition that
  business must be concerned with the qualitative
  dimensions of customer,employee,and societal
  benefits as well as the quantities measures of
  sales,revenue,and profit,by which business
  performance is traditionally measured.

• Scientists say that social responsibility is a
  concept easier to measure than business ethics.



                                               21
 Responsibility to the General Public
• The responsibility of business to the general
  public include dealing with
• public-health issues,
• Protecting the environment
• And …developing the quality of the work force
• And also…many would argue that businesses
  have responsibilities to support charitable and
  social causes and organizations that work toward
  the greater public good.
                                               22
                          To the general Public




To the Investor and the                           To the
Financial Community                               Customer




                             To the Employee

                 RESPONSIBILITY OF BUSINESS
                                                        23
      BUSINESS RESPONSIBILITIES TO THE
              GENERAL PUBLIC
• 1-Consideration of Public Health:
• AIDS-Smoking-Alcohol Abuse
• 2-Developing the quality of the Work Force
• On-the Job-Training-Education Benefits
• 3-Protecting the Environment
• Avoiding Pollution Recycling
• 4-Corporate Philanthropy
• Monetary Donations to Charitable and Social
  Organizations
• Supporting Employee-Volunteer Efforts-Donating
  Goods to Charitable and Social Organizations.
                                                   24
•   HOMEWORK:
•   Contemporary Business:Chapter 2
•   Title :
•   Business Responsibilities to the General Public.

  Please read this Title.And Write Summary Paper
  about it.
• Pp-55-61
• Please bring your paper next Course.

                                                 25
  Responsibilities to the Customers
• Business people share a social and ethical
  responsibility to treat their customers fairly and
  act in a manner that is not harmful to them.
• In the late 1960s Ralph Nader first pioneered
  Consumerism
• Consumerism is the public demand that a
  business consider the wants and needs of its
  customers in making decisions


                                                  26
              CONSUMERISM
• Consumerism is based on the belief that
  customers have Certain rights.

•   The right to be Safe
•   The right to be Informed
•   The right to choose
•   The right to be heard


                                            27
             The Right to be Safe
• Companies must recognize obligation ,both moral and
  legal,to ensure the safe operation of their products.
Product Liability refers to the responsibilities of
  manufacturers for injuries and damages caused by their
  products.
Companies must consider all possibilities and provide
  adequate warning of potential dangers.And also they
  should put their products through testing to avoid safety
  problems.


                                                       28
      The Right To Be Informed
• Consumers should have access to enough
  education and product information to make
  responsible buying decisions.

• Businesses should avoid misleading consumers.

• The responsibility of business to preserve
  consumers’ right to be informed extends beyond
  avoiding misleading advertising.
                                              29
        The Right To Choose

• Consumers have right to choose which
  goods and services they need and want to
  purchase.
• Socially responsible le firms attempt to
  preserve this right, even if they reduce their
  own sales and profits in the process.



                                               30
         The Right To Be Heard

• Companies exert considerable effort to ensure
  full hearing for consumer complaints.

• Costumers should be able to express legitimate
  complaints to appropriate parties.




                                                  31
  Responsibility To Employees
• One of the most important business
  resources is an organization’s work force.
• Companies that are able to attract skilled
  and knowledgeable employees are better
  able to meet the challenges of competing on
  a global basis.


                                            32
    Responsibilities To Employees
•   Workplace Safety:
•   Quality of Life Issues
•   Ensuring Equal Opportunity on the Job
•   Sexual Harassment and sexism




                                            33
Responsibilities To Investors and
   The Financial Community
• Investors and the financial community
  demand that businesses behave ethically as
  well as legally in handling their financial
  transactions.
• When they fail in this responsibility,
  thousands of investors and consumers can
  suffer.

                                                34
 Ethics and Social Responsibility
    In the Global Marketplace
• Global companies need to to carefully evaluate the
  cultures of the countries where they do business.
• Some Standards:
• Avoid using child or forced labor
• Provide safe working environment
• Respect workers’ rights to unionize
• Require no more than 48-hour work weeks
• Play wages sufficient to meet workers' basic
  needs.
                                                   35
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