Chapter 3: Business Ethics and Social Responsibility
Business Ethics
 Ethics ______________________________________________________. They encourage us to do the
right thing.
What is Ethical Behaviour?
 ________________________ is conduct that conforms to ethics—individual beliefs and social standards
about what is right and good.
 ____________ tell us what is important. They help us make decisions about right and wrong.
 ____________ are rules we use to decide what is good or bad.
What Role Should Ethics Play in Business?
 Business ethics are based on ______________ and those of the people _____________ and
______________.
A Code of Ethics
 Some companies write a ______________
o A ______________ that explains specifically how employees should
_________________________.
o Canadian laws address acceptable business behaviours. However, businesses can still behave
unethically without breaking these laws.
How Can Businesses Resolve Ethical Dilemmas?
 A _____________ is a situation where a difficult choice must be made between two or more options.
 An ________________ is a moral problem with a choice between potential right and wrong. Some
questions to consider are
o
o
o
o
Whistle-blowing
 ____________________ happens when an employee __________ officials or the ___________ about an
___________________.
What Happens When People Do Not Behave Ethically?
 When an individual acts unethically, his or her behaviour will most likely __________________.
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 The individual could also be sent to jail for his or her actions. Major ethical issues include
fraud______________________________________.
Fraud
 ___________ is a crime of lying or pretending. Some businesses ________ consumers and trick them to
buy their products or services.
 The Competition Act 2002 bans such fraud and deceptive business practices and defines these as
o ________________________
o Advertising a bargain price for merchandise that is unavailable for sale in a reasonable quantity
_________________________
Accounting Scandals
 An _____________________ occurs when accountants or senior
executives ______________________ for personal benefit.
 Accounting information is the ___________________ of a business; it is
used ________ and ________ of the business to make decisions.
 When accounting _____________ are uncovered, a ___________________ investigates legal and financial
documents to find ____________________.
 _____________________, a type of accounting fraud, happens when an accountant or senior executive
creates _____________ and _________ ___________into them for _______________.
 Business owners rely on outside accountants, __________, to check and report on the ____________ of
financial records.
Insider Trading
 _______________ is buying or selling shares of a company based on _________________________. This
type of trading is illegal.
 Prosecution for insider trading falls under the ________________________ _______________________.
 Punishment includes
o
o
o
o
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fining the individual(s) for up to $1 million
turning over all profits from trading
incarcerating the person(s) for up to two years
being banned from future trading in securities
Ethics and Corporate Social Responsibility
 A business exhibits __________________________________ through their
___________________________________________________.
 CRS is driven by a desire to _________________ and to _______________ and __________________.
CSR Principles
 Businesses that practice CSR principles support their employees and consumers by:
•
•
•
•
•
•
Duty to Report
 Corporations and their employees have a _____________, which means they must _________ all
important information to ____________________,
_________________________________________________________________________.
Laws that Govern Corporate Ethics
 Workplace Safety
o The ______________________________________ of Ontario defines the rights and
responsibilities of employees in their workplace to ensure their safety and health.
o These regulations were put in place to remind companies that it is not only important to focus on
making profits, but also equally imperative to _______________________________________.
 Antidiscrimination Issues
o
_______________ is denying a qualified individual an interview, job, or promotion based on his or
her religion, gender, sexual orientation, or physical disabilities.
o
____________________ is treating an employee differently based on their sex (male or female).
o
The ____________ refers to ____________ that may affect the career path of senior leaders in
corporate positions.
 Harassment
o
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Many businesses have policies and procedures for dealing with ______________: behaviour that
is threatening, disturbing, or makes others feel uncomfortable.
 Accessibility Issues
o
The _____________________ refers to an ___________________ to ensure _______________
for all employees.
o
The Canadian Human Rights Act, Sections 2 and 15, states that
________________________________________________________________________________
_______________________________.
 Environmental Responsibility
o
Environmental concerns for business include the _________________ ________. These issues
affect Canadian businesses and others in the world
o
Environmental Protection Act

The Canadian Environmental Protection Act 1999 was the response of Environment
Canada to the ___________________ of the _______________.
{The Exxon Valdez oil spill occurred in Prince William Sound, Alaska, on March 14, 1989. It is considered one of
the most devastating man-made environmental disasters ever to occur at sea.}
o
Kyoto Protocol

Canada signed the Kyoto Protocol in 1998 that states countries must
____________________________ by 2012 (five percent less than in 1990).
 Business Goals
o
Business and the Environment

o
The way businesses respond to environmental concerns and laws
_______________________________________________ __________.
Business is like a three-legged stool: each leg stands for a different goal. (See illustration on page
101 in the text.)



Social Responsibility
First leg: financial goals
Second leg: environmental goals
Third leg: social goals
Labour Practices
 In Ontario, the _______________________ addresses the minimum employment conditions including
•
•
•
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•
•
•
•
•
Pay Equity
 Although ________________ has changed considerably since its establishment in 1978, it still
_________________________________ ______________.
 The legislation ________________ from paying employees of one gender ___________ than from the
other when the same or substantially the same work is done.
Privacy Laws
 The __________________________ and ________________________ (January 1, 2004) requires all
provincially regulated businesses to explain what __________________ they need from employees or
customers and why they need it.
Fair Trade
 ___________ is the voluntary practice of helping producers in developing countries bypass expensive
middlemen so they can sell their goods in other countries for a fair profit.
 A ____________________ starts out as the local action of or response by a group of people to a problem:
o The movement develops from the bottom up, not from the top down.
o For example, the fair trade initiative began with partnerships between farmers in less-developed
countries and aid organizations (bottom up) to help them reach markets in Europe and North
America (top down).
 Fair-trade products are marked with logos such as the
__________________________________________.
 Ethical trading means using trade to ensure that the
____________________________________________ ________________.
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