Demonstrating Ethical Behavior
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Demonstrating Ethical Behavior

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  • Chapter 4 is entitled “Demonstrating Ethical Behavior and Social Responsibility.” It’s aim is to teach you, as a future business manager, how and why to ensure that you and the company you work for demonstrate ethical behavior and social responsibility. If you ask Americans, most of them will tell you that American business leaders as a group haven’t done a very good job of demonstrating ethical behavior and social responsibility in the past 8 years.

Demonstrating Ethical Behavior Demonstrating Ethical Behavior Presentation Transcript

  • Chapter Four Demonstrating Ethical Behavior & Social Responsibility
  • I have a great deal of confidence in the people in charge of running major companies. (Agree/Disagree)
  • What is Ethics?
    • Standards of moral behavior; that is, behavior that is accepted by society as right versus wrong.
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  • The Evolutionary Origins of Ethics and Morality
    • “ All humans live in moral communities…in which public opinion decisively shapes the behavior of individuals. Shared values define specific rights and wrongs of behavior, and the group decides which individuals are deviant and sanctions them accordingly.”
    • - Christopher Boehm, “Conflict and the Evolution of Social Control,” 2000
  • (Christopher Boehm, continued)
    • “ In effect, a large, ad hoc, community-wide political coalition serves as watchdog over individual behaviors that could lead to victimization of others, or to conflict within the group. This macro-coalition is prepared to use coercive force, if it must, to protect individual members from predatory exploitation or other harm.”
    • - Christopher Boehm, “Conflict and the Evolution of Social Control,” 2000
  • Why Do People Engage in So Much Unethical Behavior ?
    • 70% of high school students said they had cheated on an exam in the past 12 months
    • 33% of the students in one San Diego State professor’s class used the pirated test key, even though he had scrambled the questions
    • People bought an estimated $533 billion worth of counterfeit (pirated) goods last year.
  • Here’s what I think
    • 1. Most people are ethical most of the time , especially where it really counts.
    • People leave tips in restaurants they’ll never use again.
    • Lots of people turn in purses, wallets, and backpacks they have found to the lost and found with the money still in them.
    • Lots of people and corporations give money and/or time to charity.
    • People help strangers every day.
  • Here’s what I think (cont.)
    • 2. We complain a lot about the moral transgressors because it is our nature to complain .
    • It is part of the social mechanism we have developed to modify the behavior of those who, in our collective opinion, have behaved too selfishly.
  • How Hard Should I Try to Ensure That I and My Employees Behave Ethically at Work?
    • Damage to reputation
    • Civil and criminal penalties
    • Harm to relationships
    • Harm to self-esteem
      • (leading to self-destructive behavior)
  • Factors That Cause Workers To Act Unethically
    • Pressure to meet sales, budget, or profit goals
    • Silence from management on the subject of ethical behavior
    • A tendency for people not to discuss ethical issues in the workplace (moral muteness)
  • Causes of Moral Muteness
    • Societal ambivalence about the role of ethics in business
    • Moral relativism
    • Fear of being labeled a “goody two shoes”
  • Bedrock: Utilitarianism
    • That which produces the greatest good for the greatest number is ethical, and everything else is unethical.
    • Example: If by stealing a loaf of bread you can keep yourself alive, but the baker has plenty of money, and if you have no alternative, then stealing the loaf of bread is ethical.
  • Compliance-Based Ethics Codes
    • Emphasize preventing unlawful behavior
    • Are long and specific
    • Are usually accompanied by increased “controls”
    • Threat of disciplinary action
  • Integrity-Based Ethics Codes
    • Define the organization’s guiding values
    • Are short and general
    • Are accompanied by an environment that supports ethically sound behavior
  • Corporate Social Responsibility
    • A business’s concern for the welfare of society as a whole. Three dimensions:
    • Corporate Philanthropy
    • Corporate Responsibility
    • Corporate Policy
  • Corporate Philanthropy
    • Aventis
    • Bank of America
    • Wal-Mart
    • General Electric
    • JPMorgan Chase
    • Citigroup
    • Wachovia
    • Wells Fargo
    • $221.7*
    • 144.8
    • 128.0
    • 88.3
    • 79.9
    • 73.9
    • 64.4
    • 64.4
    Source: The Foundation Center * Annual figures, 2006, in Millions
  • Total: $295 billion
  • Companies Who Have Exceeded Our Expectations for Social Responsibility
  • Ben & Jerry’s Ice Cream
    • Gives 7.5% of pretax profits to charity
    • Organizes “community action teams” to do good works in the community.
    • Chooses “social mission suppliers”
  • Samsung Electronics
    • Gives appx. 5.7% of annual pretax profits to charity
    • Treats its customers with honesty and fairness
    • Treats its employees with dignity and concern
    • Lets employees do volunteer work and disaster relief on company time
    • Pursues environment-friendly policies
  • Other Socially Responsible Companies
    • The Body Shop
    • Patagonia, Inc.
    • Delancey Street Restaurant
    • Greyston Bakery
    • Interface (carpet tiles)
    • Seventh Generation
    • Stonyfield Farm Yogurt
  • Other Socially Responsible Companies
    • The Gap
    • Starbucks
    • Timberland Footwear
    • Steelcase (furniture)
    • Working Assets (Long Distance)
  • The Gap, Inc.
    • Released a social responsibility report in May 2004 that received international attention for its surprisingly honest look at health and safety conditions in its suppliers’ factories around the world.
    • “ They’re the first ever to do this,” said Ruth Rosenbaum of the Center for Reflection, Education and Action in New York City.