Ethics and Social Responsibility
4) Analyze the elements of sample business plans or business plan
templates found in informational text, identifying and describing
the purpose of common elements. Discriminate between
elements that govern culture (such as vision, mission, core
priorities and social responsibility) and those that may govern
operational goals (such as market share, profitability, and product
development). (TN Reading 1, 6, 9; TN Writing 7)
Objectives
• I CAN explain why business ethics are
important.
• I CAN describe what ethical codes should
include.
• I CAN discuss how businesses solve ethical
dilemmas.
• I CAN describe which laws relate to ethics in
business.
Word Study (10 minutes)
Understanding Management (You Do)
Athletic apparel manufacturer Nike sells footwear that has
been assembled in overseas factories where the minimum
wage is much lower than it is in the United States. Maria
Eitel, Vice Present of Social Responsibility at Nike, oversees
programs that prevent the abuse of poor workers abroad. As
more consumers demand that companies produce products
without harming workers or the environment, businesses like
Nike learn to keep step.
1. Why might it be challenging for a manager to balance the
needs of the company with the needs of workers?
2. Imagine that you are the “Vice President of Social
Responsibility” at your workplace or school. What changes
would you make to prevent unfair practices?
The Importance of Ethics
• Ethics are a set of moral principles or values
that govern behavior.
• Help businesses determine how to behave
• The role of ethics in management decisions is
difficult.
– What should managers do if they are aware of
unethical practices?
– Blow the whistle? Risk their jobs?
– Quit and allow practices to continue?
– Ignore the practices?
Critical Thinking (We Do)
Is unethical and illegal
the same thing?
Code of Ethics
• A document that outlines the principles of
conduct to be used in making decisions within
the organization
• Most corporations in the U.S. have codes of
ethics.
Class Discussion (We Do)
Are codes of ethics
really necessary?
Don’t most people
know right from
wrong?
Content of Ethical Codes
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Honesty
Adherence to the law
Product safety and quality
Health and safety in the
workplace
Conflicts of interest
Employment practices
Selling and marketing
practices
Financial reporting
• Pricing, billing, and
contracting
• Trading in securities/using
confidential information
• Acquiring and using
information about
competitors
• Security
• Payments to obtain
business
• Political activities
• Protection of the
environment
Writing Activity (They Do)
Write a paragraph explaining why
businesses should be concerned with
ethics.
Individual Writing Activity (You Do)
• Write a student body code of ethics for
Ridgeway High School.
• Use the Texas Instruments’ Code of Ethics as a
model.
Behaving Honestly
• Sarbanes-Oxley
Act of 2002
• Employee Theft
• Lying About Hours
Worked
• Falsifying Records
Dealing with Ethical Dilemmas
Ethical
dilemmas are
situations in
which the
ethical course
of action is not
clear.
Guidelines for Solving
Ethical Dilemmas
1. Have you defined the problem accurately?
2. How would you define the problem if you stood
on the other side of the fence?
3. Whom could your decision or action injure? Can
you discuss the problem with the affected
parties before you make your decision?
4. Are you confident that your position will be as
valid over a long period of time as it seems
now?
5. Could you disclose without qualm your decision
or action to your boss, your CEO, the board of
directors, your family, and society as a whole?
Ethical Problems in the Business
World
Normal Interactions
Questionable Interactions
• Managers often take
clients out to lunch
or invite them to
play golf
• Help businesspeople
get to know each
other.
• Manager who sends
a client a very
expensive gift (could
be seen as bribing)
• Businesses often
provide guidelines
on types of gifts
considered
acceptable.
Ethical Problems in the Business
World
Illegal Interactions
• Paying bribes to
attract business is
unethical and illegal.
• Could face legal
action and go to jail.
Bottom Line . . .
Having a code of
ethics and a personal
sense of what is right
and wrong can help
business managers
choose the right
course of action.
How would you handle
the following situations?
Example #1
Your boss informs you confidentially that one
of your friends is going to be fired. Your friend
is about to buy a house. Should you warn
your friend that he is about to be fired, even
though you promised your boss that you
would not?
Example #2
Your colleague has been violating your
company’s code of ethics by accepting
expensive gifts from a salesperson who does
business with your company. Should you otify
your supervisor?
Example #3
One of your employees has been having
serious personal problems, and you have tried
to be understanding. However, your entire
staff is suffering because of poor performance
by this key team member. What should you
do?
Annotated Reading Activity (You Do)
A Tale of Two
CEOs: Elizabeth
Holmes and
Martin Shkreli
Laws Relating to Ethics in Business
Competitive Behavior
• The Sherman Act
• The Clayton Act
• The Wheeler-Lea Act
Consumer Protection
• Food and Drugs
• Consumer Products
• Loans
Laws Relating to Ethics in Business
Environmental Protection
• The National Environmental
Policy Act of 1969
• The Clean Air Act of 1970
• The Toxic Substances
Control Act of 1976
• The Clean Water Act of
1977
Teamwork (They Do)
Research and report on 3 unethical
business practices.
Ethical Standards and Culture
Corporate Gift Giving
• Customs differ around the
world.
• In some cultures, gifts are
expected; failure to present
them is considered an
insult. (Japan)
• Regardless of local
practices, American
managers operating abroad
must abide by the standards
set in the U.S.
Intellectual Property
• Refers to ownership of ideas
– Inventions, books, movies,
and computer programs
• Guaranteed through patent,
trademark, and copyright
laws
• In 1999, Justice Dept., FBI,
and Customs Service began
cracking down on piracy
and counterfeiting of
software . . .
Fact and Idea Review (We Do)
1. Why is it important for businesses to act
ethically?
2. List five areas a code of ethics should cover.
3. Explain one way businesses solve ethical
dilemmas?
4. Identify three laws that affect the way
companies do business.
Case Analysis (You Do)
For the past several weeks, Jan Morrison has
been arriving late for her factory job. Rather than
lose wages, she has asked her co-workers to
punch her time card for her before she arrives
each morning. Last week Jan asked you to punch
her in.
You are aware of your company’s policy
prohibiting employees from punching other
workers in. Explain how you would respond.
Objectives
• I CAN explain the change in corporations’
views of social responsibility.
• I CAN describe the ways in which businesses
demonstrate their social responsibility.
Changing Views of
Social Responsibility
Social responsibility
refers to the obligation
that individuals or
businesses have to help
solve social problems.
Measuring Social Responsibility
A social audit is a
review of a business’s
social responsiveness.
Fact and Idea Review (We Do)
1. What are the three schools of thought about
the role of the corporation? How is the
workplace different today than it was in the
nineteenth and early twentieth century?
2. What are three ways in which corporations
can demonstrate a sense of social
responsibility? Give an example for each.
Making Generalizations (We Do)
How does hiring
women and
minorities
demonstrate a
business’s sense of
social
responsibility?
Evaluating Information (We Do)
Why do you think
companies have
obligations to their
stakeholders?
Drawing Conclusions (We Do)
What purpose
does a social audit
serve?
Assessing Social Studies Skills
(You Do)
• Select a large company operating in the
United States. Using the Internet, research
how that company demonstrates its sense of
social responsibility.
• Prepare a PowerPoint Presentation
summarizing what you find.
• Email to getting2business@gmail.com.
Case Analysis
Mark Smith owns a growing Internet company,
ReThink. Last year his company earned more
than $45 million, and he hired 20 new
employees.
Mark would like to use his new wealth to help
people in the poor community in which he
grew up. He has asked you to prepare a
memo for him, identifying various options for
providing aid.
How would you recommend that ReThink
help a poor community?