Chapter 2 Business Ethics and Social Responsibility

2. Chapter 2 Business Ethics and Social Responsibility

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4. Ethisphere links ethics to profits Publication that illuminates the relationship between ethics and profits. 2-4

5. Business Ethics & Social Responsibility Exec who allegedly made $270M off Enron to pay SEC $31.5M Business Ethics – principles and standards that determine acceptable conduct in business 2-5

6. Business Ethics & Social Responsibility A Timeline of Ethical and Socially Responsible Concerns 2-6

7. Business Ethics & Social Responsibility Social responsibility– business’s obligation to maximize its positive impact and minimize its negative impact on society 2-7

8. Business Ethics & Social Responsibility Laws and regulations encourage businesses to conform to society’s standards, values, and attitudes. Sarbanes-Oxley Act - 2002 2-8

9. The Role of Ethics in Business Concern about unethical business practices continue – HealthSouth’s accounting improprieties and securities fraud 2-9

10. The Role of Ethics in Business Unethical and/or Illegal Accounting fraud Deceptive advertising Unfair competitive practices Internet theft 2-10

11. The Role of Ethics in Business Ethical Conduct Builds trust Promotes confidence Validates relationships Learn how to recognize and resolve ethical issues 2-11

12. Recognizing Ethical Issues in Business Ethical issue – an identifiable problem, situation, or opportunity that requires a person to choose from among several actions that may be evaluated as right or wrong, ethical or unethical. 2-12

13. Recognizing Ethical Issues in Business How to judge the ethics of a situation – examine the situation from your stakeholders’ position, including customers and competitors 2-13

14. Recognizing Ethical Issues in Business Types and Incidences of Observed Misconduct Many business issues may seem straightforward and easy to resolve on the surface, but are in reality very complex. 2-14

15. Sources of Unethical Behavior in Organizations • Overly aggressive financial or business objectives • Abusive & intimidating behavior • Conflict of interest • Fairness & honesty • Communications • Business relationships 2-15

16. Sources of Unethical Behavior Abusive and intimidating behavior “Bullies” behavior: 2-16

17. Sources of Unethical Behavior in Organizations Conflict of interest – • the most common ethical issue identified by employees. • Advance personal interests over others’ interests • Benefit self at the expense of the company 2-17

18. Least Corrupt Countries 2-18

19. Business Ethics Fairness & honesty – the heart of business ethics How employees use resources No harm to customers Accurate representations Disclosure 2-19

20. Business Ethics Most Popular Office Supplies Employees Pilfer “More Employees Taking Supplies,” The News Journal 2-20

21. Honesty? Personal Ethics 25,000 high school students: 62% cheated on exams at least once 35% copied documents from Internet 27% shoplifted 23% cheated to win at sports 2-21

22. Communications Ethical Concerns False/misleading advertising Deceptive personal selling tactics Product safety and quality Unsubstantiated claims Product labeling 2-22

23. Business Relationships Ethical Concerns Relationships with customers Relationships with suppliers Relationships with co-workers 2-23

24. Plagiarism Ethical Concerns The act of taking someone else’s work and presenting it as your own without mentioning the source 2-24

25. Making Decisions About Ethical Issues Questions to Consider in Determining Whether an Action Is Ethical Open discussion of ethical issues does not eliminate ethical problems; it does promote trust and learning in an organization. 2-25

26. Improving Ethical Behavior in Business Ethical decisions in an organizations are influenced by three key factors 2-26

27. Improving Ethical Behavior in Business Codes of Ethics – Formalized rules and standards that describe what a company expects of its employees. 2-27

28. Improving Ethical Behavior in Business Key Things to Consider in Developing a Code of Ethics 2-28

29. National Business Ethics Survey (NBES) Codes of Ethics According to the NBES, employees in organizations with written standards of conduct are more likely to report misconduct when they observe it. 2-29

30. Whistleblowing Codes of Ethics The act of an employee exposing an employer’s wrongdoing to outsiders, such as the media or government regulatory agencies. 2-30

31. Business Ethics – Taking Responsibility 2-31

32. 4 Dimensions Nature of Social Responsibility Economic Legal Ethical Voluntary (philanthropic) 2-32

33. Pyramid of Social Responsibility 2-33

34. Corporate Citizenship Nature of Social Responsibility The extent to which businesses meet the legal, ethical, economic, and voluntary responsibilities placed on them by their stakeholders. 2-34

35. Best Corporate Citizens Nature of Social Responsibility Intel Corporation Eaton Corporation Nike Inc. Deere and Co. 2-35

36. Nature of Social Responsibility Arguments For and Against Social Responsibility 2-36

37. Owners & Stockholders Social Responsibility Issues Primary concern with profit or ROI Financial community at large Proper accounting procedures Protecting owner’s rights and investments 2-37

38. Employee Relations Social Responsibility Issues Provide a safe workplace Adequate compensation Listen to grievances Fair treatment 2-38

39. Consumer Relations Social Responsibility Issues Consumerism – the activities that independent individuals, groups, and organizations undertake to protect their rights as consumers. 2-39

40. Environmental Issues Social Responsibility Issues Animal rights Pollution Going Green 2-40

41. Community Relations Social Responsibility Issues General community and global welfare Hardcore unemployed Charitable contributions (United Way) Avon’s Breast Cancer Awareness Crusade 2-41