Business Ethics & Social
Responsibility
What is Ethics?
Why do people act unethical?
What are some examples of unethical acts?
Business Ethics
• Ethics
• Rules that help us tell the difference
between right and wrong
• Standards of conduct that society believes
people should follow
• They encourage us to do the right thing
• Vary from person to person, situation to
situation and culture to culture
What is Ethical Behaviour?
• Ethical behaviour
• conduct that conforms to ethics
• individual beliefs and social standards about what
is right and good.
• Values - tell us what is important. They help
us make decisions about right and wrong.
• Morals - rules we use to decide what is good
or bad.
What Role Should Ethics Play in
Business?
• Business ethics are based on society’s ethics
and those of the people who work for and buy
from them
• Business face ethical questions everyday
concerning products or services they sell
A Code of Ethics
• A document that explains specifically how employees
should respond in certain situations
• Helps different people approach problems in the
same way
• Creating and applying a code that draws a line
between right and wrong isn’t easy (i.e. gift to client,
call a friend to get a better bank rate for friend)
• Canadian laws address acceptable business
behaviours. However, businesses can still behave
unethically without breaking these laws
Why are Business Ethics Important to
an Organization?
• Profitability is not just about making money in the
short term, but about building relationships with
society to ensure money in the long term
• Business depend on people, serve people and
are made up of people, ethics can be a key
ingredient in this relationship
How Can Businesses Resolve Ethical
Dilemmas?
• Dilemma: a situation where a difficult choice must be made
between two or more options.
• Ethical dilemma: a moral problem with a choice between
potential right and wrong. Some questions to consider are
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Who will be helped by what you do?
Who will be hurt by what you do?
What are the benefits and problems of such a decision?
Will the decision survive the test of time?
Catch Me If You Can
What were some ethical dilemmas in
the movie?
•
• Frank’s father knew what he was
doing was wrong, but did it anyway
• Carl let Frank go at the airport
when he should have caught him
• If Frank could have gone forever
and not get caught, should he have?
Factors in Conflict when Business
Face an Ethical Dilemma
• Business has to weigh values and morals against
profitability and competitiveness
• Situations:
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Downsizing staff
Pollution control
Disposal toxic waste
Employee rights
Discrimination
Product safety
Whistle-blowing
• Happens when an employee informs officials or the public
about an illegal or ethical violation
• Misconduct may be classified in many ways; for example, a
violation of a law, rule, regulation and/or a direct threat to
public interest, such as fraud, health/safety violations, and
corruption
• Make their allegations internally (for example, to other
people within the accused organization) or externally (to
regulators, law enforcement agencies, to the media or to
groups concerned with the issues)
Create your own ethical dilemma……
Some ideas:
• A sales person goes to a doctor’s office and, to
encourage them to use their products, offers to take
the doctor and their spouse out for a really
expensive dinner
• A client asks if you’d do some work for them on the
side, in cash
What is Fraud?
• Fraud is the crime of lying or pretending.
• In business, some mislead consumers and try to trick
them to buy something in order to maximize their
profits
Competition Act - Canada
•
Bans types of fraud and deceptive business practices
such as:
• False or misleading advertising
• Advertising a bargain price for merchandise that is
unavailable for sale in a reasonable quantity
• Place two different prices on a product and sell it
at the higher price
Types of Fraud
• Accounting Fraud (Embezzlement)
• Bank fraud (fraudulent loans, forgery)
• Consumer fraud (trick customers into buying – false
claims)
• Contract fraud (bribes, kickbacks to create contract)
• Insurance fraud (false claims of lost, stolen or
damaged property)
• Mail fraud (Chain letters, inheritance scams, phoney
job opportunities)
Types of Fraud
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Pyramid scheme fraud (recruit others in order to
receive more money that invested)
Stock market fraud (insider trading, artificially inflate
stocks)
Telemarketing fraud (phone calls to get customers to
buy or donate funds to fake companies/charities)
Welfare fraud (receive benefits without being eligible)
NIKE Video
Video
Consider these questions while watching the video:
•
What is NIKE’s responsibility? Should they be held accountable? Why
or why not?
•
A different company makes the rubber for the shoes that gets
burned… what is their responsibility?
•
What should be the role of the US government? The Indonesian
government?
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What about the role of the shareholder?
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What are you passionate about? Would you ever go to the ends that
he did to learn more and bring awareness to the issue?