Ethics and Social Responsibility in
Business
BOM 120
Ethics
 Standards of moral behaviour, that is, behaviour that is
accepted by society as right versus wrong.
Personal Ethics
 Personal ethics are what guide us in making the right
decisions.
 It is not asking the question ‘Will I be able to get away with
it?’
 Deeper consideration is needed to make the right decision.
The Five Step Process
 1) Recognize an ethical issue: First, does the issue go
beyond what the law requires?
 Is it legal?
 Can the conflict potentially have impact on individuals?
 If the answer is yes to these questions, you are likely dealing
with an ethical issue.
Five Step Process
 2) Get the facts: What are the important aspects of the
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situation?
Whom does it impact?
Are there some people who have a personal stake in how the
ethical situation might turn out?
Is there a conflict of interest?
Getting the facts in a situation allows us to see all sides of it
Five Step Process
 Evaluate alternative actions: Consider which option
would do the most good and the least harm to the majority
of individuals.
 Ask yourself if you would be okay with having your actions
reported on the front page of the newspaper.
Five Step Process
 Act on your decision: put your ethical making into action.
 Make sure your decision is balanced.
 Consult for advice.
Five Step Process
 Reflect on your decision: was it the right thing to do?
 Do you feel comfortable with the decision?
 Learn from your mistakes.
Abraham Lincoln
 ‘When I do good, I feel good. When I do bad, I feel bad.
That’s my religion.’
At the end of the day…
 You have to look at yourself in the mirror.
 BertuzziVideo
http://www.youtube.com/watch?v=Fz9RE9RGrVY
Is it Fair?
 Todd Bertuzzi was suspended from the NHL for 18 months.
 Steve Moore never played in the NHL again.
 It is important to remember that in the hockey world, Todd
Bertuzzi’s actions were seen by some as ‘sticking up’ for a
teammate.
Ethical Dilemmas Activity
 Remember:
 It basically boils down to 3 questions.
 1) Is it legal?
 2) Is it balanced?
 3) How will it make me feel about myself?
Ethics: Part 2
 Corporate Ethics
 DO NOW: Personal Ethics Questionnaire.
Corporate Ethics
 Just like individuals, corporations and those who run them
must make ethical decisions on a daily basis.
 Most companies (89%) have a formal code of ethics by which
employees must abide.
Corporate Ethics
 To be successful:
 Top management must adopt and unconditionally support an
explicit corporate code of conduct.
 All employees must understand expectations for ethical
behaviour.
 Outside suppliers, subcontractors, distributors and
customers must be aware of the corporate code of ethics and
the penalty for violation.
 The code of ethics must be strictly enforced.
Compliance Based Ethics Codes
 Emphasize preventing unlawful behaviour by increasing
control and by penalizing wrongdoers.
Integrity Based Ethics Codes
 Define the organizations guiding values
 Create an environment that supports ethically sound
behaviour.
 Stress a shared accountability among employees.
Video
 http://www.youtube.com/watch?v=AIOov3QVRzQ
 http://www.youtube.com/watch?v=BGviXZqpQjU
Conflict of Interest
Defined: a conflict of interest is a situation in which a
person has a private or personal interest sufficient to appear
to influence the objective exercise of his or her official duties
as, say, a public official, an employee, or a professional.
Ethical behaviour in business means avoiding possible
conflicts of interest.
Are these conflicts of interest? Why or
why not?
A male manager dates a female employee who reports to
him.
A purchasing agent hires his brother-in-law to provide
vending services to the company lunch areas.
An employee starts a company that provides similar services
to similar clients as those of her full time employer.
Continued
An employee who is a member of a company employee
selection team fails to disclose that he is related to a job candidate
whom the company team is considering for a position.
An employee works part time in the evening for a company
that makes a product that competes with the products of his full
time employer.
A member of the company board of directors accepts fees
and provides advice to a company that is in direct competition
with the company on whose board of directors he sits.
Ethics is More Than Legality
 It is not uncommon to hear of instances where business
people are involved in unethical behaviour.
 After two years of denying accusations, WestJet Airlines
admitted to spying on Air Canada.
 WestJet was accessing a confidential Air Canada website
designated for reservations.
 As part of the settlement WestJet was required to pay Air
Canada’s investigation and litigation costs of $5.5 million and
make a $10 million donation in the name of both airlines to
children’s charities across Canada.
 Activity