Chapter 2 Section 1
Business Ethics- application or ethical behavior in a business context
 Right vs wrong
 Breaking laws/not following regulations
 Honesty/personal conviction
Social Responsibility- deals with actions that affect a variety of parties in a company’s environment
 Stakeholders- owners, employees, customers, communities
Ethical Organization Characteristics
 Treat fairly-employees, customers, investors, the public
 Fairness- top priority
 Hold members accountable for their actions
 Communicate core values/principles
 Demand/reward integrity from all
Drawbacks of Unethical Behavior
 Work uneasiness- fear, lack of respect
 Objections to treatment
 Uncomfortable about treatment of others
 Questioning appropriateness of directives/policies
Protecting Our Interests-Knowledge is the Key
Enron’s effect on utility prices
Enron’s effect of employee benefits
Hershey Chocolate Story
Fed/State Contract Easy Travel
WorkSource Story
My Sears, Quest, Direct TV stories
Chapter 2 Section 2
Values on Personal Ethical Behavior
 How do you handle conflicting demands?
 What do you do when you think something at work in unethical?
 What if you’re new on the job, how do you establish boundaries?
Ethical Dilemma-is a moral problematic situation where you have to pick between two or more
decisions (right vs right)
 Defend the problem/collect facts
 Identify feasible options
 Assess the affect of each option on stakeholders
 Establish criteria to determine most appropriate action
 Select the best option based on established criteria
Ethical Decision- decision process where there is a right (ethical) decision and a wrong (unethical or
illegal) decision.
Ethical Lapse- when the decision you make is unmistakably unethical or illegal.
The Test:
 Actions illegal?
 Unfair to parties?
 Will you feel badly about your decision
 Will you be ashamed?
 Embarrassment if exposed?
WorkSource Job Placements
Money Not Earned
Keeping good records (Ron emails)
Whistleblower- Goodwill
Chapter 2 Section 3
Bribes vs Gifts- what is appropriate? Factors include:
 Cost of item
 Timing and purpose of the gift
 Type of gift
 Connection between giver/receiver
 Gifts used to influence decisions
 Adhering to company policy
Conflict of Interest- situation where you must choose between promotion of personal interests and the
interests of others Including:
 Utilizing influence or position
 Utilizing information (insider trading)
Conflicts of Loyalty- an ethical dilemma caused by connection to conflicting relationships
Honesty and Integrity Following personal code of conduct- values, customs, norms
 Work ethic/focus on the job
 Taking office supplies is theft
 Honesty with everyone you do business
 Building character through small deeds
Whistleblower- person who exposes illegal or unethical behavior in an organization
 Issues-career suicide, peer shunning, blackballed from workforce
 2002 Sarbanes-Oxley Act protects whistleblowers
Romanian Art, Boise Cascade Stock, WWCC/WorkSource, Russ and the pens, Goodwill
Whistleblower
Chapter 2 Section 4
Organizational Behavior- behavior of an organization motivated by management and coworkers the
values, customs and norms of the business
 Ground rules of work
 Mission statements/visions
 Employee expectations/code of conduct *
Ethical Leadership- leaders who manage and control the ethics of a business through
 Communications of ethical expectations
 Through control and monitoring of ethical behavior
 Role Modeling/Mentoring
Examples of ethical role models/Leaders that compromised values and beliefs
Code of Conduct- statement that defines the principles and guidelines employees must follow in the
course of all job-related activities
Ethics Team at WWCC, Self-Directed Work Teams Ground Rules, WA Pen Code of Conduct, WWCC
Code of Conduct
Chapter 2 Section 5
Corporate Responsibility: approach an organization takes in balancing it’s responsibilities toward
different stake holders when making legal, economic, ethical and social decisions.
Corporate stakeholders:
 Owners/Managers/Corporate Leads (Board of Directors)
 Employees
 Suppliers
 Community/Customers
Fiduciary Responsibility: safeguarding company assets and handling company funds in a trustworthy
manner (Sarbanes/Oxley Act –requires CEO/CFO to attest to accuracy/corporate officers, auditors
board members legal implications)
Company employee responsibilities:
 Safety/health
 Freedom from sexual harassment
 Equal opportunity/equal pay (discrimination based on race, color, religion, gender, age,
national origin, citizenship, sexual orientation, disability) (equal pay for equal work, following
laws governing minimum wage and overtime pay, benefit requirements-Social Security, UI,
Worker Comp Other enhanced benefits- medical, retirement, profit sharing)
 Diversity (recruiting/hiring underrepresented groups, benefits: competitive advantage, new
talents/fresh ideas, attract and improve services to a more diverse customer base)
Customer rights:
 Safe products (required safety testing, recalls)
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Product information (labels, manuals to help customers decide, product warnings)
Freedom of choice (explaining options)
An avenue for filing complaints and concerns
Community Responsibilities:
 Providing employment
 Equal share of taxation
 Support of community (education, social/economic growth, health/recreation, world
community financial support-donations, volunteerism, support of social causes)
Why community service/volunteerism?
Boise Cascade and the Port of Walla Walla tax scandal (Strausser Mfg)
Key Tech/Nelson donating equipment to WWCC
WWCC Service learning program
President’s Council on Volunteerism
Building image vs Social Responsibility
Chapter 2 Section 6
Environmentalism Land pollution- waste, over use, chemical toxification
 Air pollution- air quality, global warming, weather conditions, flooding, oceanic disruptions,
shifting storm patterns, droughts, shifting farming outputs, animal extinctions (120 nations
Kyoto protocol, businesses need to reduce greenhouse emissions)
 Water pollution- 70% of earth’s surface but projections show that within the next 30 years we
may have a shortage a clean drinking water due to pollution- issues with marine ecosystem and
wildlife with numerous animal extinctions caused by water contaminants
Environment protection agency
Recycling efforts,Logging/mining controls and rewards, Chemical bans, organic/new methodology
farming (Eddie)
Air quality controls- Air Force jets in the valley
Water run-off laws penalties and taxation/Tax relief for those conserving (Atlanta)
Mill Creek pollution vs economic stability (Rogers cannery)
Chapter 2 Section 7
Stages of Corporate Responsibility Defensive: defensive/legalistic stance, reject allegations/refuse to accept responsibility, affix
blame with something or someone else (isn’t their job to fix
 Complaint- acknowledging the wishes of the public do little to fix, only what they have to to
appease public sentiment
 Managerial- admission of responsibility and beggings of seeking long-term solutions to the
problem
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Strategic- understanding and reaping the benefits of corporate responsibility they see value in
acting responsibly
Civic- serving as a role model to other companies , endorsing the principles fo acting
responsibly within their industry
What local firms have shown corporate responsibility? What stages are some local firms in currently?
How did others transform between stages?
What stage is WWCC at in corporate responsibility? The City of Walla Walla? How do economics
play a role in the process?
Cases & Problems
Lessons in Community Living
Executives consider it an honor to have their company named one of Business Ethics magazine’s “100 Best Corporate Citizens.”
Companies are chosen from a group of one thousand, according to how well they serve their stakeholders—owners, employees,
customers, and the communities with which they share the social and natural environment. Being in the top one hundred for
five years in a row is cause for celebration. Two of the twenty-nine companies that enjoy this distinction are Timberland
and the New York Times Company.
The two companies are in very different industries. Timberland designs and manufactures boots and other footwear, apparel,
and accessories; the New York Times Company is a media giant, with nineteen newspapers (including the New York Times
and the Boston Globe), eight television stations, and more than forty Web sites. Link to the Timberland Web site
(http://www.timberland.com/corp/index.jsp?page=csroverview) and the New York Times Company Web site
(http://www.nytco.com/social_responsibility/index.html) to learn how each, in its own way, supports the communities
with which it shares the social and natural environment. Look specifically for information that will help you answer
the following questions:
1.
How does each company assist its community? To what organizations does each donate money? How do
employees volunteer their time? What social causes does each support?
2.
How does each company work to protect the natural environment?
3.
Are the community-support efforts of the two companies similar or dissimilar? In what ways do these
activities reflect the purposes of each organization?
4.
In your opinion, why do these companies support their communities? What benefits do they derive from
being good corporate citizens?