Chapter 3 – Ethical Behaviour and Social Responsibility
Read p.61 and define
1) Ethics - Ethics

Code of moral principles.

Set standards of “good” and “bad” as opposed to “right” and “wrong.”
2) Ethical Behaviour –

What is accepted as good and right in the context of the governing moral code
Ethics in the Workplace
Read pages 65-80
3) Define ethical dilemma. Give an example of an ethical dilemma you have experienced.
 An ethical dilemma occurs when choices, although having potential for personal and/or
organizational benefit, may be considered unethical.
 Example: Stealing a package of paper from work for your home computer and personal use
 Example: Adjusting accounting records to making the company appear to have a great number
of assets/revenue than they actually have
4) What are 5 common ethical dilemmas in business? Explain each one.
1. Discrimination: denying promotion or appointment to a job candidate because of the
candidate’s race, religion, gender, age, or other non-job relevant criterion.
2. Sexual harassment: making a co-worker feel comfortable through inappropriate
comments or actions regarding sexuality; or a manger requesting sexual favors in return
for favorable job treatments.
3. Conflicts of interest: taking a bribe or kickback or extraordinary gift in return for making
a decision favorable to the gift giver.
4. Customer confidence: giving another party privileged information regarding the activities
of a customer.
5. Organizational resources: using the official stationery or a company e-mail account to
communicate personal opinions or make requests from community organizations.
5) What are the 4 rationalizations people use to justify their unethical behaviour? Explain how you can
deter each one.
 Ethical behaviour can be rationalized by convincing yourself that:
Rationalization
Behaviour is not really
illegal.
Behaviour is really in
everyone’s best interests.
Nobody will ever find out.
The organization will
“protect” you
Deterrent
Ask yourself
*does this action make sense,
*is this action or decision compatible with my concept of myself
at my best, and
*do I think this action is right primarily because someone with
appropriate authority says it is right.
Look beyond short term results to address long term implications
Use the “Front Page Challenge” of local media
Mistaken belief, companies have codes of ethics and standards to
live up to. The company does not want a bad reputation

6) Why do people find ethical dilemmas challenging?

People are often challenged to choose ethical courses of action in situations where the
pressure may be contradictory and great.
7) Draw the factors influencing ethical behaviour diagram into your notes.
Maintaining High Ethical Standards
8) What is the process for dealing with ethical dilemmas (Hint: Manager Notepad 3.2)
Step 1 - Recognize the ethical dilemma
Step 2 - Get the facts
Step 3 - Identify your options
Step 4 - Test each option: Is it legal? Is it right? Is it beneficial?
Step 5 - Decide which option to follow
Step 6 - Double-check the decision by asking the questions:
 “How would I feel if my family found out about my decision?”
 “How would I feel about this if my decision were printed in the local newspaper?”
Step 7 - Take action.
9) Define ethics training. Is ethics training needed in companies today?

Structured programs that help participants to understand ethical aspects of decision
making. Helps people incorporate high ethical standards into daily life.

Most definitely! Helps people deal with ethical issues under pressure. Not teaching
right from wrong but rather how to company would like you to deal with ethical
dilemmas. In today’s media driven world, with cameras, watch groups, activists, etc.,
inappropriate actions are soon discovered and posted which gain access to a worldwide
audience in a split second.
10) What is a whistle-blower protection policy?
 A whistleblower expose misdeeds of others to:
•
Preserve ethical standards
•
Protect against wasteful, harmful, or illegal acts
11) Describe an ethical role model?

Top managers serve as ethical role models.

All managers can influence the ethical behaviour of people who work for and with them.

Excessive pressure can foster unethical behaviour.

Managers should be realistic in setting performance goals for others.
12) Define a code of ethics? Why are codes of ethics/conduct necessary in today’s organizations? P73

Formal statement of an organization’s values and ethical principles regarding how to
behave in situations susceptible to the creation of ethical dilemmas.

Areas often covered by codes of ethics: Bribes and kickbacks, Political contributions,
Honesty of books or records, Customer/supplier relationships, Confidentiality of
corporate information

Necessary? Yes, because we live in an increasingly complex world of international
business, different laws, regulations, cultural expectations, varying ethical beliefs, and
corporate expectations, a COE helps maintain a solid reputation envisioned by the
leader.
Corporate Social Responsibility
13) Define corporate social responsibility.
Obligates organizations to act in ways that serve both its own interests and the interests of society at
large
14) What is an organizational stakeholder?
Those persons, groups, and other organizations directly affected by the behaviour of the organization
and holding a stake in its performance.
15) List the 7 groups of stakeholders.
1.
2.
3.
4.
5.
6.
7.
Employees
Customers
Suppliers
Owners
Competitors
Regulators
Interest groups
16) Why would competitors be a stakeholder? You may want to use an example.



They are affect by increased government regulations
Fear within the industry
Example: Maple Leaf Listeria Crisis- sales of all deli meats and other Maple Leaf
products decreased
17) Why is it increasingly difficult to hide unethical behaviour in today’s day and age?


Consumer activist groups, non-profit organizations, and governments are increasingly
vocal and influential in directing organizations towards socially responsible practices.
Business activities increasingly transparent b/c news organizations disseminate
information all over the world, activist groups that lobby, campaign, & pressure
organizations.
18) What is an Ethical Fund? (p.75) you’ll need to do some outside research here
Mutual Fund companies or fund that only hold socially responsible and ethic company stock and bonds
in their portfolios. http://resps.org/emfcdnlist.htm
19) What are the leadership beliefs that guide socially responsible practices?
 Beliefs that guide socially responsible business practices:

People do their best with a balance of work and family life.

Organizations perform best in healthy communities.

Organizations gain by respecting the natural environment.

Organizations must be managed and led for long-term success.

Organizations must protect their reputations.
Perspectives on Corporate Social Responsibility
20) Compare and contrast the 2 perspectives on corporate social responsibility.
Defined
Supported by
Arguments
Classical
Management’s only responsibility is to
maximize profits.
Milton Friedman, respected
economist and Nobel Laureate
Reduced business profits
Higher business costs
Dilution of business purpose
Too much social power for business
Socio-Economic
Management must be concerned for the
broader social welfare, not just profits
Paul Samuelson, economist & Nobel
Laureate
Adds long-run profits
Improved public image
Avoids more government regulation
21) What is your belief / perspective about corporate social responsibility? Explain why
It is important today to give back. Customers will generally reward you for this. You will gain personal
fulfillment
Evaluating Corporate Social Performance
22) Define a social responsibility audit. Why is it needed?


Assesses an organizations accomplishments in areas of social responsibility
To regularly report on and systematically assess, an organizations accomplishments in
various areas (ecological, educational, safety, protection, diversity, charity, etc.) of
corporate social responsibility
23) Draw figure 3.5 into your notes. (add explanations or examples if you need)
24) Draw figure 3.6 into you notes. (add explanations or examples if you need)
Social Entrepreneurship
25) What is social entrepreneurship? Provide an example


Undertaking task for the benefit of society rather than for personal profit
Marc and Craig Kielburger Me to We, Volunteer Now
26) Who is responsible for social entrepreneurship? Do you agree/disagree?
Business or Individuals or Governments or Social groups or …..
27) Do we need social entrepreneurship in society today? Why? Why not?
Yes, b/c injustices occur, helpless need a hand not a handout
No? Government should take care of their people. Don’t want to impose your view on others
28) Does it fit with our catholic teachings? Explain
Yes
but it is okay to make a profit to signal success and maintain a healthy lifestyle (not greedy).