Business Ethics And
Social Responsibility
Exploring Business © 2009 FlatWorld Knowledge
2-1
Chapter Objectives
1.
2.
3.
4.
5.
6.
2-2
Define business ethics and explain what it means
to act ethically
Solve ethical dilemmas and make ethical
decisions
Identify ethical issues in business and
rationalizations for unethical behavior
Specify actions managers take to create/sustain
ethical organizations
Explain how organizations are responsible to
stakeholders
Identify threats to natural environment and
how businesses are addressing them.
Exploring Business © 2009 FlatWorld Knowledge
Idea of Business Ethics
 What Is Ethics?
– Ethical Behavior
– Business Ethics
 What Is Social Responsibility?
– Corporate Social Responsibility
– Stakeholders
Exploring Business © 2009 FlatWorld Knowledge
2-3
Ethical
Organizational Activities
 Treat People Fairly
 Fairness = Top Priority
 Everyone Accountable
 Communicate Core Values to All
 Demand/Reward Integrity from All
Exploring Business © 2009 FlatWorld Knowledge
2-4
Best Corporate Citizens
•
•
•
•
•
Proctor & Gamble
Intel
Avon
Herman Miller
Timberland
Exploring Business © 2009 FlatWorld Knowledge
• Cisco
• Southwest
Airlines
• AT & T
• Starbucks
• Merck
• Medtronic
2-5
Employee Attitudes In
Unethical Companies
• Uneasy About Work
• Object To Way Treated
• Uncomfortable About How
Co-Workers Treated
• Question Management
Directives & Policies
Exploring Business © 2009 FlatWorld Knowledge
2-6
Why Study Ethics?
? Ethics of future not the
same as today/past
? Understand what is/isn’t
acceptable/unacceptable
? Recognize/deal with
ethical challenges
? Know right/wrong =
marketable job candidate
Exploring Business © 2009 FlatWorld Knowledge
2-7
Ethical
Self-Examination, “I’m...
1)
Always Ethical
2)
Mostly Ethical
3)
Somewhat Ethical
4)
Seldom Ethical
5)
Never Ethical
Exploring Business © 2009 FlatWorld Knowledge
2-8
Ethical Challenges
•“…arise in...business
organizations
[because]…multiple
stakeholders…make conflicting
demands.”
Exploring Business © 2009 FlatWorld Knowledge
2-9
Ethical
oDilemmas- problematic
situations
o Decisions- Ethical Lapse
Exploring Business © 2009 FlatWorld Knowledge
2-10
How To Face an Ethical
Dilemma
Exploring Business © 2009 FlatWorld Knowledge
2-11
How To Avoid
an Ethical Lapse
Exploring Business © 2009 FlatWorld Knowledge
2-12
Basic Situations
Causing Ethical Issues





Bribes
Conflicts of Interest
Conflicts of Loyalty
Issues of Honesty and Integrity
Whistle-blowing
Exploring Business © 2009 FlatWorld Knowledge
2-13
Bribes Vs. Gifts
Cost of Item
Gift
• Timing
• Type
Connection
Check Company Policy
Exploring Business © 2009 FlatWorld Knowledge
2-14
Conflict of Interest
2-15
• “…individuals must choose between
taking actions that promote their
personal interests over the interests of
others.”
Exploring Business © 2009 FlatWorld Knowledge
Conflicts Of Interest
2-16
Interferes With Best Interest of Company
Stakeholders
Use of Private Information
Exploring Business © 2009 FlatWorld Knowledge
How to Maintain
Honesty & Integrity
Exploring Business © 2009 FlatWorld Knowledge
2-17
Whistle-Blowing
Applauded or Shunned
Career Suicide
Sarbanes-Oxley
Exploring Business © 2009 FlatWorld Knowledge
2-18
Common Rationalizations
1) My Behavior Isn’t
2)
3)
4)
Exploring Business © 2009 FlatWorld Knowledge
2-19
Really Illegal Or
Immoral
My Action Is In
Everyone’s Best
Interests
No One Will Find Out
What I’ve Done
The Company Will
Condone My Action
And Protect Me
Ethics Influencers
Members of Organization
Top Managers & Supervisors
Co-Workers & Subordinates
Exploring Business © 2009 FlatWorld Knowledge
2-20
Formal
Code Of Conduct:
 Principles & Guidelines
 Topics
- Use Of Corporate Funds & Resources
- Conflict Of Interest
- Protection Of Proprietary Information
 Enforcement
 Encourages & Provides Instructions for Reporting
Exploring Business © 2009 FlatWorld Knowledge
2-21
Corporate
Social Responsibility
2-22
• “…the approach…an organization
takes in balancing its responsibilities
toward...stakeholders when
making…decisions.”
Exploring Business © 2009 FlatWorld Knowledge
The Corporate Citizen
Exploring Business © 2009 FlatWorld Knowledge
2-23
Stakeholders &
Responsibility
 Owners- Fiduciary
 Employees
•
•
•
•
Safety & Health
Free from Sexual Harassment
Equal Opportunity & Diversity
Wages & Benefits
 Customers
 Communities
Exploring Business © 2009 FlatWorld Knowledge
2-24
Workplace Deaths
by Event/Exposure
Exploring Business © 2009 FlatWorld Knowledge
2-25
Workplace Deaths by
Occupations
Exploring Business © 2009 FlatWorld Knowledge
2-26
Median Annual Earnings by
Gender and Race
Exploring Business © 2009 FlatWorld Knowledge
2-27
Median Annual Earnings by Gender,
Age, and Degree Level
Exploring Business © 2009 FlatWorld Knowledge
2-28
Responsibilities
to Customers
Right To Safe Products
Right To Be Informed
Right To Choose
Right To Be Heard
Exploring Business © 2009 FlatWorld Knowledge
2-29
Responsibilities
to Community
Financial Contributions
Volunteerism
Supporting Social Causes
Exploring Business © 2009 FlatWorld Knowledge
2-30
Business Community
& Environmental Issues
Land Pollution
Air Pollution
Water Pollution
Exploring Business © 2009 FlatWorld Knowledge
2-31