Chapter
Four
Demonstrating
Ethical Behavior &
Social Responsibility
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Ethics Check Questions:
Is
It Legal?
Is
It Balanced?
How
Will It Make Me Feel
About Myself?
4-3
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Factors That Cause Workers
To Act Unethically
 Pressure
to meet sales,
budget or profit goals
 Lack of recognition
 Personal financial
worries
 Balancing work & family
 Poor communication
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Top Five Unethical/Illegal
Behaviors of Workers
Cut
corners in quality control
Covered up incidents
Abused or lied about sick days
Lied to or deceived customers
Put inappropriate pressure on
others
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Fostering Ethical Behavior
Leadership
Codes of Conduct
– Compliance-based
– Integrity-Based
Social Audits
Whistle Blowing
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Factors Influencing
Managerial Ethics
Individual
Organizational
Values
Work
Background
Top Level
Mgmt. Philosophy
Family Status
Personality
The Firm’s
Reward System
Job Dimensions
Environmental
Competition
Economic
Conditions
Social/Cultural
Institutions
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Business Mission Statement
Why?
 What?
 How?

“Our mission is to show people how they can use
the power of their bodies and minds to make
their lives better. ‘You can do it,’ we say on
every page of our magazines and books.Ardath Rodale, Rodale Publishing
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Business Mission Statement
Our mission is to be the world leader in
Customer Service, innovation and product
value in the Hand Tool industry. We will
accomplish this by fostering an environment
that allows our people to produce quality
hand tools on time and meet business
growth needs through employee excellence
and development.- Western Forge
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Business Ethics &
Social Responsibility
 Ethics-
Values/Principles
 Responsibility-
of Actions
Consequences
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Ethical Decision
Resolved Through:

Religious Teachings

Individual Rights

Legislation

Court Decisions
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Classifying
Business Decisions
Ethical
Unethical
Ethical
but
Illegal
Ethical
and
Legal
Unethical
and
Illegal
Unethical
but
Legal
Illegal
Legal
4-13
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Steps to Improve U.S.
Business Ethics
1. Top Management 4. Ethics Office
2. Employees
5. Outsiders
3. Managers
6. Enforcement
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Three Levels of
Social Responsibility
Societal Responsibility
Stakeholder Responsibility
General
Public
Profit Responsibility
Customers
Ecological
Employees
Owners/Stockholders
Environment
Suppliers/Distributors
Public Interest Groups
Source: Marketing, 5/E by Berkowitz, Kerin, Hartley, and Rudelius.
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Responsibility to Employees
Working
Conditions
 Equal Employment
Opportunity
 Affirmative Action
 Diversity Training

Economic
Security
 Child
Care/Parental
Leave
 Employee Dignity
 Conflict of
Interest

4-16
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What Concerns Workers
Most on the Job?
Percent
 Hazardous
Materials
 Injury
 Repetitive
job motions
 Poor ventilation
 HIV/Aids
23%
20%
10%
7%
6%
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Responsibility to
Customers/Environment

Right To Safety

Right To Be Heard

Right To Be
Informed

Quality Of Life

Ecology/Pollution

Right To
Choose
4-18
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Responsibility to Society,
Investors, & Suppliers
 Fairness
 Honesty
 Timely
Action
 Appropriate Compensation
 Philanthropy
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Why People Volunteer
Total is more than 100% because respondents could give more
than one reason.
Civic Duty
Learn Issues/Problems
Be With People With Same Ideals
Be With People They Enjoy
Improve Community
Help People
0
10
20
30
40
50
60
70
80
90
Percent of Respondents
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Contributions to Charity
(In Billions of Dollars)
$9
$10
$12
Individuals
Foundations
Bequests
Corporations
$120
Source: Forbes Dec. 15, 1997
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New Economy &
New Philanthropy
Foundation
Bill & Melinda Gates Foundation
Donation
$21.8*
Ford Foundation
13.1
Packard Foundation
13.0
Lilly Foundation
11.2
Robert Wood Johnson Foundation
8.3
*In Billions
Source: Business Week, Mar. 13, 2000
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Corporate Annual Giving
Merck
Johnson & Johnson
Pfizer
Eli Lilly
IBM
Microsoft
Intel
Bank of America
Source: The Taft Group
$221.0*
176.2
123.9
121.4
116.1
104.7
101.0
91.5
* In Millions
4-23
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Most Admired
Companies by Industry
Industry
 Apparel
 Airlines
 Food
Services
 Food Products
 Beverages
 Electronics
Company
Levi-Strauss
Southwest
McDonald’s
Campbell’s
Coca-Cola
Intel
Source: Fortune Magazine
4-24
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International Ethics &
Social Responsibilities
U.S. not unique
– Japan/S. Korea/China = influence
peddling
– Mexico = child labor
Leaders being held to new/higher
standards
– Chinese prison labor
– McDonald’s using rain forest land for
cattle grazing
4-25
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