Personal Ethics Honesty? Have you ever cheated on exams? •copied documents from Internet •shoplifted •cheated to win at sports 2-1 Business Ethics & Social Responsibility Business Ethics – principles and standards that determine acceptable conduct in business 2-2 Business Ethics & Social Responsibility Social responsibility– business’s obligation to maximize its positive impact and minimize its negative impact on society 2-3 Business Ethics & Social Responsibility Laws and regulations encourage businesses to conform to society’s standards, values, and attitudes. 2-4 The Role of Ethics in Business Unethical and/or Illegal •Accounting fraud •Deceptive advertising •Unfair competitive practices •Internet theft 2-5 The Role of Ethics in Business Ethical Conduct •Builds trust •Promotes confidence •Validates relationships 2-6 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. 2-7 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 2-8 Sources of Unethical Behavior Abusive and intimidating behavior “ 2-9 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 2-10 Least Corrupt Countries 2-11 Business Ethics Fairness & honesty – the heart of business ethics •How employees use resources •No harm to customers •Accurate representations •Disclosure 2-12 Business Ethics Most Popular Office Supplies Employees Pilfer “More Employees Taking Supplies,” The News Journal 2-13 Ethical Concerns Communications •False/misleading advertising •Deceptive personal selling tactics •Product safety and quality •Unsubstantiated claims •Product labeling 2-14 Ethical Concerns Business Relationships •Relationships with customers •Relationships with suppliers •Relationships with co-workers 2-15 Ethical Concerns Plagiarism The act of taking someone else’s work and presenting it as your own without mentioning the source 2-16 Improving Ethical Behavior in Business Ethical decisions in an organizations are influenced by three key factors 2-17 Improving Ethical Behavior in Business Codes of Ethics – Formalized rules and standards that describe what a company expects of its employees. 2-18 Codes of Ethics Whistleblowing The act of an employee exposing an employer’s wrongdoing to outsiders, such as the media or government regulatory agencies. 2-19 Business Ethics – Taking Responsibility 2-20 Nature of Social Responsibility SR: A business’s obligation to maximize its positive impact and minimize its negative impact on society 4 Dimensions 1. 2. 3. 4. Economic Legal Ethical Voluntary (philanthropic) 2-21 Pyramid of Social Responsibility 2-22 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. 2-23 Nature of Social Responsibility Best (American) Corporate Citizens 1. 2. 3. 4. Intel Corporation Eaton Corporation Nike Inc. Deere and Co. See the top 20 list on page 53 2-24 Social Responsibility Issues Owners & Stockholders • • • • Primary concern with profit or ROI Financial community at large Proper accounting procedures Protecting owner’s rights and investments 2-25 Social Responsibility Issues Employee Relations • • • • Provide a safe workplace Adequate compensation Listen to grievances Fair treatment 2-26 Social Responsibility Issues Consumer Relations Consumerism – the activities that independent individuals, groups, and organizations undertake to protect their rights as consumers. 2-27 Social Responsibility Issues Environmental Issues • Animal rights • Pollution • Going Green 2-28 Social Responsibility Issues Community Relations •General community and global welfare •Hardcore unemployed •Charitable contributions •Avon’s Breast Cancer Awareness Crusade 2-29