2-3Business Ethics and SocialResponsibility• Business Ethics:– The principles and standards that defineacceptable conduct in business• Social Responsibility:– A business’s obligation to maximize itspositive impact and minimize its negativeimpact on society
2-4Recognizing an Ethical Issue• An ethical issue is an identifiable problem,situation, or opportunity that requires aperson to choose from among severalactions that may be evaluated as right orwrong, ethical or unethical.Did You Know?The most common types of observed misconductare lying, withholding information, and abusive/intimidating behavior.
2-5Reasons For Not ReportingObserved Misconduct1. Didn’t believe corrective action would betaken2. Feared retribution or retaliation fromsupervisor or management3. Feared they wouldn’t remain anonymous4. Thought someone else would report themisconduct5. Didn’t know who to contactSource: 2005 Ethics Resource Center- National Business Ethics Survey Report, p. 29.
2-6Misconduct Observed in theWorkplace
2-7Ethical Issue Categories• Conflict of interest• Fairness andhonesty• Communications• Businessrelationships
2-8Conflict of Interest• Occurs when a person must choosewhether to advance their ownpersonal interest or those of others
2-9Fairness and Honesty• The heart of businessethics– General values ofdecision makers– Bribe andPlagiarism
2-10Communications• False and misleadingadvertising and deceptivepersonal-selling tacticsanger customers and maycause a business to fail.
2-11Business Relationships• Businesspeople must be ethical towardtheir customers, suppliers, and others intheir workplace.
2-12Three Factors that InfluenceBusiness EthicsIndividualStandardsandValuesIndividualStandardsandValuesManagers’andCoworkers’InfluenceManagers’andCoworkers’InfluenceOpportunity:Codes andComplianceRequirementsOpportunity:Codes andComplianceRequirementsEthical/UnethicalChoicesin BusinessEthical/UnethicalChoicesin Business
2-13Codes of Ethics• Formalized rules and standards thatdescribe what a company expects of itsemployeesDid You Know?Written ethics standards are more often found inlarger companies than smaller ones.
2-14Whistleblowing• The act of an employee exposing theemployer’s wrongdoing to outsiders– The media– Government regulatory agencies
2-15The Facts on BusinessEthics Today• Of employees surveyed:– 86% reported that their organizations havewritten standards of conduct– 69% reported that their organizations offermandatory ethics training– 65% reported that their organizations have aplace where they can seek ethics adviceSource: 2005 Ethics Resource Center- National Business Ethics Survey: HowEmployees Perceive Ethics at Work.p.12-14.
2-16The Nature of SocialResponsibility• Four Dimensions:– Economic – earn profits– Legal – comply with the law– Ethical• Not just “for profit” only– Voluntary & Philanthropic• Promote human welfare and goodwill
2-17The Pyramid of SocialResponsibilityEthical Responsibilitiesbeing ethical; doing what is right, just,and fair; avoiding harmVoluntaryResponsibilitiesbeing a“good corporate citizen;”contributing to thecommunity and quality of lifeSource: Adapted from Archie B. Carroll, “The Pyramid of Corporate Social Responsibility: Toward the MoralManagement of Organizational Stakeholders.” Business Horizons 34 (July/August 1991): 42.Legal Responsibilitiesobeying the law (society’s codificationof right and wrong)Economic Responsibilitiesbeing profitable
2-18Social Responsibility Issues• Organizational relationships with owners andstockholders:– Profit and ROI• Employee relations:– Providing a safe workplace, adequate pay,information about the company, listening togrievances, and treating employees fairly• Consumer relations:– Respecting the rights of customers and providingthem with safe and satisfying products
2-19John F. Kennedy’s 1962Consumer Bill of Rights• The right to safety• The right to be informed• The right to choose• The right to be heardDid You Know?John F. Kennedy was the 35th President ofthe United States.
2-20Social Responsibility Issues• Environmental issues:– Animal rights– Pollution– Global warming• Community relations:– Responsibility to the general welfare ofthe communityDid You Know?In one year, Americans generated 230 milliontons of trash and recycled 23.5 percent of it.
2-21Responsibility of the EthicsOfficer• Provide advice about ethics to employees andmanagement• Distribute the company’s code of ethics• Create and maintain an anonymous, confidentialservice to answer questions about ethical issues• Take action on ethics violations• Review and modify the code of ethics as needed
2-22End of lecture ……..• Assignment #3• What are the questions which must be Considered in DeterminingWhether an Action is Ethical or not in a business?– See your text book– Google it– Code at least two examples– Submission d/d 10thJanuary– You are not allowed to ask for any extension in assignment date.----------------------------------------------------------------------------------------
2-23Additional Discussion Questionsand ExercisesImagine you are a salesperson. When does offering agift, such as basketball tickets, become a bribe ratherthan just a sales practice?
2-24Chapter 2 Quiz1. Which of the following has the greatest effect onethical behavior in organizations?a. authority of an employee’s superiorsb. an employee’s perception of the ethics of coworkers andmanagersc. an employee’s personal beliefs about what is right or wrongd. investors perceptions of ethics2. Copying someone else’s work and presenting it asyour own is:a. ethicsb. bribec. plagiarismd. greenmail
2-25Chapter 2 Quiz3. A code of ethics is:a. a set of formalized rules and standards describing what thecompany expects of its employees.b. a government legislation enforced by government agencies.c. a set of principles that describe what a person believes isthe right way to behave.d. the impact of a business’s activities on society.3. Which one of the following is NOT one of the fourrights provided in John F. Kennedy’s consumer bill ofrights?a. right to safetyb. right to be informc. right to sued. right to choose