Business Ethics
[
An identifiable problem, situation, or opportunity
that requires a person to choose from among
several actions that may be evaluated as right or
wrong, ethical or unethical
]
FHF
2-3
Social Responsibility
Business’s obligation is to maximize its positive
impact and minimize its negative impact on society
FHF
2-4
Laws and Regulations
 Laws and regulations encourage businesses to
conform to society’s basic standards, values, and
attitudes.
 Sarbanes-Oxley Act, 2002
 Troubled Assets Relief Program
FHF
2-5
The Role of Ethics in
Business
Growing concerns about legal and ethical
issues in business





Antitrust violations
Accounting fraud
Cybercrimes
Unfair competitive practices
Tax fraud
FHF
2-6
Ethical Issues
[
An identifiable problem, situation, or opportunity
that requires a person to choose from among
several actions that may be evaluated as right or
wrong, ethical or unethical
]
FHF
2-7
Ethical Issues
 Involve all organizational activities
•
For profit businesses
•
Non-profits
•
Government
•
Schools and universities
 Learning to recognize and resolve ethical issues are
important in maintaining an ethical business climate
FHF
2-8
Ethical Conduct Helps To:
 Build Trust
 Promote confidence
 Validate relationships
FHF
2-9
How to Judge the Ethics
of a Situation
 Examine the situation from your stakeholders’
position, including customers and competitors
 People often need years of experience to
accurately recognize and react to ethical situations
 Ethical situations vary by culture
FHF
2-10
Unethical Behavior in
Business






Misuse of company resources
Abusive & intimidating behavior
Conflict of interest
Fairness & honesty
Communications
Business relationships
FHF
2-11
Sources of Unethical
Behavior
Misuse of Company Resources

The most commonly observed misconduct


Time theft


Stealing office supplies
Use of personal email and social networking sites at work is a
growing problem
Unauthorized use of equipment and software
FHF
2-12
Sources of Unethical
Behavior
Abusive and Intimidating Behavior / Bullying
FHF
2-13
Sources of Unethical Behavior
in Organizations
Conflict of interest


Advance personal interest over others’ interests
Benefit self at the expense of the company
Bribes represent a conflict of interest because they benefit an individual at
the expense of an organization or society
FHF
2-14
Corruption Perceptions
Index
Least Corrupt Countries…
1. New Zealand
12. Hong King/Luxembourg (tied)
2. Denmark
14. Australia
3. Singapore/ Sweden (tied)
16. Germany/ Ireland (tied)
5. Switzerland
17. Japan/ United Kingdom
6. Finland/Netherlands (tied)
19. United States
8. Australia/Canada/Iceland (3-way tie)
20. Barbados
11. Norway
Source: “Corruption Perceptions Index 2009,” Transparency International,
http://www.transparency.org/policy_research/
surveys_indices/cpi/2009/cpi_2009_table (accessed January 22, 2010).
FHF
2-19
Fairness & Honesty
Are at the heart of business ethics




How employees use resources
No deceit, coercion, or misrepresentations
Fair competition
Disclosure of potential harm caused by products
FHF
2-15
Ethical Concerns in
Communications





False/misleading advertising
Deceptive personal selling tactics
Truthfulness in product safety and quality
Unsubstantiated claims
Product labeling
FHF
2-16