Demonstrating Ethical Behavior and Social Responsibility
1/16
Ethics Is More Than Legality
• Enron • Tyco • Martha Stewart • Moral and ethical behavior are not the same as following the law
2/16
Ethics Is More Than Legality (cont.)
• Ethics
• The proper relations with and responsibilities toward other people
• Legality
• Narrower issues • Many immoral acts fall within laws
3/16
Ethics Is More Than Legality (cont.)
• Ethics
• Standards of moral behavior • Behavior that is accepted by society as right versus wrong
4/16
Managing Business Ethically and Responsibly
• Setting Corporate Ethical Standards
• Compliance-Based Ethics Codes
ethical standards that emphasize preventing unlawful behavior by increasing control and by penalizing wrongdoers
5/16
Managing Business (cont.)
• Integrity-Based Ethics Codes
ethical standards that define the organization’s guiding values, create an environment that supports ethically sound behavior, and stress a shared accountability among employees
6/16
Managing Business (cont.)
• Whistleblowers
people who report illegal or unethical behavior
• Corporate and Criminal Fraud Accountability Act (Sarbanes-Oxley, 2002)
contains protections for corporate whistleblowers
7/16
Corporate Social Responsibility
• Corporate Social Responsibility (CSR)
• A business’s concern for welfare of society • Milton Friedman
the only social responsibility of business is to make money for stockholders
8/16
Corporate Social Responsibility (cont.)
• Corporate Social Performance
• VS
• Corporate Financial Performance
9/16
Corporate Social Responsibility (cont.)
• Social Performance
• Corporate Philanthropy
the dimension of social responsibility that includes charitable donations to nonprofit organizations
• Corporate Social Initiatives
enhanced forms of corporate philanthropy more directly related to the company’s competency
10/16
Corporate Social Responsibility (cont.)
• Corporate Responsibility
the dimension of social responsibility that includes everything from hiring minority workers to making safe products
• Corporate Policy
the position a firm takes on social and political issues
11/16
Corporate Responsibility
• Responsibility to Customers
• Responsibility to Customers Investors
• Insider Trading
insiders use private company information to further their own fortunes or those of their family and friends Regulation FD
12/16
Corporate Responsibility (cont.)
• Responsibility to Employees
• Responsibility to Society and the Environment
13/16
Corporate Responsibility (cont.)
• Social Auditing
• A systematic evaluation of an organization’s progress toward implementing socially responsible and responsive programs
14/16
Corporate Responsibility (cont.)
• Watchdogs
• • • • Socially Conscious Investors Environmentalists Union Officials Customers
15/16
International Ethics And Social Responsibility
• Standards on Social Responsibility
• Inter-American Convention Against Corruption • International Organization for Standardization (ISO)
16/16