DEMONSTRATING ETHICAL
BEHAVIOR AND SOCIAL
RESPONSIBILITY
Chapter 4
Learning objectives
1.
Define ethics.
2.
Understand the approaches and the process of
making an ethical decision.
3.
Distinguish between compliance-based and
integrity-based ethics codes, and list the five steps
in setting up a corporate ethics code.
4.
Describe the indicators of corporate social
responsibility.
3
Ethics Defined
• Ethics: is our understanding of the standards of moral
behavior towards others that is accepted by society as
right versus wrong
• Basic moral guidelines; Integrity, respect for human life,
self control, honesty, courage and self sacrifice
• Cheating, cowardice, and cruelty are wrong
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Ethics
• Generally, something that is illegal is also unethical, but
the reverse is not always the case.
• Illegal means you could be fined or imprisoned by a court
of law for engaging in a particular action.
• Something unethical doesn’t always have to be illegal.
• Personal Ethics are what guide us to make the right
decision
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Ethics
• Religion and culture are generally our sources of ethics,
which sometimes makes determining the “right” ethical
course to take in a given situation a difficult task, since
religion and culture vary among people.
• The Golden Rule: Do not do unto others as you would
not have them do unto you.
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Personal Ethics
• Personal ethics are what guide us in making the right
decisions.
• Many people use the idea ‘’ will I be able to get away with
it?’’
• The way is making the ethical choice
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Personal ethics
• There are five main approaches we can use when trying
to make an ethical decision
• The Utilitarian approach
• The Rights approach
• The Fairness or justice approach
• The Common good approach
• The Virtue approach
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The Utilitarian approach
• Ethical action should provide the most good and does the
least harm, i.e. produces the greatest balance of good
over harm.
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The Right Approach
• Right to choose
• Right to be told the truth
• Right not to be injured by another
• Right to have privacy etc
• Ethics is to best protect and respect the moral rights of
those affected. Its based on the belief that humans have
dignity based on their human nature or on their ability to
choose freely what they do with their lives
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The Fairness or Justice Approach
• All are equal and all should be treated equally.
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The Common Good Approach
• It states that life in community is good in itself and our
actions should contribute to that life .(e.g.:- by putting
good laws, effective police and fire departments, health
care, public education system, even public recreational
areas.)
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The Virtue Approach
• It states that ethical actions ought to be consistent with
certain ideal virtues that provide for the full development
of our humanity .Such virtues are :honesty,courage,compassion,generosity,tolerance,love,fid
elity,integrity,fairness,self-control are all examples of
virtues.
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Personal ethics
• According to the framework, there are eight main
principles we should be concerned with in determining our
own personal ethics:
• Concern for the well-being of others.
• Respect for the autonomy of others.
• Trustworthiness and honesty.
• Willing compliance with the law (with the exception of civil
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disobedience).
Basic justice; being fair.
Refusing to take unfair advantage.
Benevolence; doing good.
Preventing harm to others and the world around us.
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Personal Ethics
• Eight principles should be concerned with in determining
our own personal ethics
• Concern for the well-being of others.
• Respect for the autonomy of others.
• Trustworthiness and honesty.
• Willing compliance with the law (with the exception of civil
•
•
•
•
disobedience).
Basic justice; being fair.
Refusing to take unfair advantage.
Benevolence; doing good.
Preventing harm to others and the world around us.
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Personal ethics
• five step processes can be used to ethical decision
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making to help make ethical decisions in our personal
lives
1-Recognise an ethical issue
2-Get the facts
3-Evaluate alternative actions
4-Act on your decision
5-Reflect on your decision
This type of framework allows us to better understand the
consequence of our decisions
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Corporate Ethics
• Companies have found they must have a formal code of
ethics by which employees must abide
• Ethics codes can be classified into two major categories:
• Compliance based ethics
• Integrity based ethics
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Corporate Ethics
• Compliance based ethics codes
• Prevent unlawful behavior by increasing control and
penalizing violations
• Based on avoiding legal punishments
• Integrity based ethics codes
• Define the organization’s guiding values and create an
environment that supports ethically sound behaviour
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Corporate Social Responsibility Defined
• Corporate social responsibility – the level of concern a
business has for the welfare of society
• Corporate philanthrophy – an indicator of social
responsibility that includes charitable donations
• McDonald’s gives millions to charities yearly around the
world
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Corporate Social Responsibility Defined
• Corporate Responsibility
• An indicator of social responsibility that includes the
actions the company takes that could affect others
• Hiring minority workers, making products safe, reducing
pollution, providing a safe workplace
• Corporate Policy – the position a firm takes on social
and political issues