BUS110 Chap 4 - Demanding Ethical and Socially Responsible Behavior

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Demanding Ethical and Socially Responsible Behavior

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  • See Learning Goal 1: Explain why obeying the law is only the first step in behaving ethically.
  • See Learning Goal 1: Explain why obeying the law is only the first step in behaving ethically. The reputation of American businesses have been under assault due to numerous scandals over the past twenty years. Use this slide to help students understand that a person can obey the law and still be behaving unethically. Following the law is only the first step in being ethical. Ethics are standards of moral behavior and are accepted by society as right versus wrong.
  • See Learning Goal 1: Explain why obeying the law is only the first step in behaving ethically.
  • See Learning Goal 1: Explain why obeying the law is only the first step in behaving ethically.
  • See Learning Goal 1: Explain why obeying the law is only the first step in behaving ethically. Studies have shown that dishonesty at school often leads to dishonesty at work.
  • See Learning Goal 2: Ask the three questions to answer when faced with a potentially unethical action. When facing an ethical dilemma it is important that you ask these three basic questions: Is it legal? Is it balanced? How will it make me feel about myself? Asking and answering these three questions will prevent many people from making unethical decisions.
  • See Learning Goal 2: Ask the three questions to answer when faced with a potentially unethical action.
  • See Learning Goal 3: Describe management’s role in setting ethical standards. Organizational ethics begins at the top. Leadership helps to instill corporate values in employees, so like many aspects of business ethical behavior practiced and modeled by managers and executives will often trickle down to the employees at large.
  • See Learning Goal 3: Describe management’s role in setting ethical standards. Factors Influencing Managerial Ethics Before you put this slide up, you may want to ask the students: What factors influence managerial ethics? Ethics begins with the individual but is influenced by the organization and the environment in which the business operates. To bring the discussion to the present, you may ask: How can the firm’s reward system impact ethical behavior? How did these reward systems at large banks and other financial institutions exacerbate the financial crisis in this country? (Students should be able to discuss this point. Excessive risk taking imperiled all of the stakeholders of various financial institutions as well as the world economy.)
  • See Learning Goal 4: Distinguish between compliance-based and integrity-based ethics codes, and list the six steps in setting up a corporate ethics code.
  • See Learning Goal 4: Distinguish between compliance-based and integrity-based ethics codes, and list the six steps in setting up a corporate ethics code.
  • See Learning Goal 4: Distinguish between compliance-based and integrity-based ethics codes, and list the six steps in setting up a corporate ethics code.
  • See Learning Goal 2: Ask the three questions to answer when faced with a potentially unethical action. Ways to Prevent Unethical Behavior Before you put this slide up, you may want to ask the students: What is management’s role in preventing unethical behaviors? What can be done to deter unethical behaviors on the part of employees? Increasing the penalty and educating employees are among the top methods for deterring unethical behaviors, according to the CMO Ethics Poll. (Source: CMO Magazine, October 2004) Thirty percent of the respondents in a poll suggested adding new laws to deter unethical behaviors. Ask the students: If ethics is more than legality, would new laws help? (Students should be able to argue this point. Although ethics is more than legality, if something is against the law, people may deter from such behavior. However, it should be pointed out that ethics should be the way of life, i.e., it needs to be ingrained in the employees through culture and role modeling by managers and executives.)
  • See Learning Goal 5: Distinguish between compliance-based and integrity-based ethics codes, and list the six steps in setting up a corporate ethics code. CSR is based on a commitment to such basic principles as integrity, fairness and respect. Many for-profit companies have philanthropic endeavors as a part of their mission. Communities often depend on companies to help with social programs that make the lives of people in the community better. It stands to reason that businesses that strengthen their communities, as proponents of CSR argue, will grow stronger as their communities improve.
  • Also available on a Transparency Acetate See Learning Goal 5: Define corporate social responsibility and examine corporate responsibility to various stakeholders. Three Levels of Social Responsibility This slide investigates differing concepts of the social responsibility of organizations. Social Responsibility can be defined as: Companies’ voluntary commitment to improving society by developing long-term policies that honor high ethical standards and meet responsibilities. In class, you may want to visit a corporate website to investigate a company’s social practice. (Target Stores, Anheuser-Busch, McDonald’s Corp.) Listed below are some examples you can share with the students of companies who practice social responsibility: Target Corp. – Contributes over $2 million each week to the communities it serves. Anheuser-Busch – Over the past 10 years has contributed over $320 million to charitable organizations. McDonald’s – Ronald McDonald House Charities
  • See Learning Goal 5: Distinguish between compliance-based and integrity-based ethics codes, and list the six steps in setting up a corporate ethics code.
  • See Learning Goal 5: Distinguish between compliance-based and integrity-based ethics codes, and list the six steps in setting up a corporate ethics code.
  • See Learning Goal 5: Distinguish between compliance-based and integrity-based ethics codes, and list the six steps in setting up a corporate ethics code. An ultimate example of a company helping the community is Xerox’s program, Social Service Leave, which allows employees to leave for up to a year and work for a nonprofit while still earning full salary, including benefits and job security.
  • See Learning Goal 5: Distinguish between compliance-based and integrity-based ethics codes, and list the six steps in setting up a corporate ethics code. America’s Charitable Giving For the first time charitable giving exceed $300 billion in this country. What percentage of the $300 billion was contributed by individuals, businesses and foundations? (Individuals contributed 82.3%, businesses 5.1% and foundations 12.6%) (Source: http://nonprofit.about.com/od/trendsissuesstatistics/a/giving2008.htm) Religious organizations continue to receive the biggest share of donations accounting for 33.4% of the total giving. Here is the breakdown for what types of organizations receive these donations: Religion, $102.32 billion, 33.4% Education, $43.32 billion, 12.1% Human services, $29.64 billion, 9.7% Health, $23.15 billion, 7.6% Public-Society benefit (United Way etc), $22.65 billion, 7.4% Arts, culture and humanities, $13.67 billion, 4.5% International affairs, $13.22 billion, 4.3% Environment and animals, $6.96 billion, 2.3% Foundations, $27.73 billion, 9.1% Unallocated giving, $23.67, 7.7%
  • See Learning Goal 5: Distinguish between compliance-based and integrity-based ethics codes, and list the six steps in setting up a corporate ethics code. Most Generous Celebrities Students will find it interesting to see on this slide what some of their favorite celebrities have donated. Oprah Winfrey earns well over $200 million per year. The talk-show host and entertainment mogul is the founder of the Angel Network, a charity that raises money for poverty-stricken children and she has raised money to open schools for girls in South Africa.
  • See Learning Goal 5: Distinguish between compliance-based and integrity-based ethics codes, and list the six steps in setting up a corporate ethics code. Generous Americans Before you put this slide up, you may want to ask the students: What income group donates more -- people earning over or under $100,000? (Sixty-five percent of money donated by Americans comes from people earning less than $100,000.) How does this information impact the fund raising of nonprofit organizations seeking charitable contributions? (Small donations add up and require nonprofit organizations to alter their fund raising efforts to reach these donors.)
  • See Learning Goal 5: Distinguish between compliance-based and integrity-based ethics codes, and list the six steps in setting up a corporate ethics code.
  • See Learning Goal 5: Distinguish between compliance-based and integrity-based ethics codes, and list the six steps in setting up a corporate ethics code.
  • See Learning Goal 5: Distinguish between compliance-based and integrity-based ethics codes, and list the six steps in setting up a corporate ethics code.
  • See Learning Goal 5: Distinguish between compliance-based and integrity-based ethics codes, and list the six steps in setting up a corporate ethics code. America’s Most Admired Companies 1. Before you put this slide up, you may want to ask the students: Are the ideals of maximization of profit and social responsibility in conflict? Corporate social responsibility is the concern businesses have for the welfare of society, not just for their owners. 3. The vast majority of the companies listed in this slide are not only admired but also financially successful.
  • See Learning Goal 5: Distinguish between compliance-based and integrity-based ethics codes, and list the six steps in setting up a corporate ethics code.
  • See Learning Goal 5: Distinguish between compliance-based and integrity-based ethics codes, and list the six steps in setting up a corporate ethics code.
  • See Learning Goal 5: Distinguish between compliance-based and integrity-based ethics codes, and list the six steps in setting up a corporate ethics code.
  • See Learning Goal 5: Distinguish between compliance-based and integrity-based ethics codes, and list the six steps in setting up a corporate ethics code.
  • See Learning Goal 6: Analyze the role of U.S. businesses in influencing ethical behavior and social responsibility in global markets.
  • See Learning Goal 6: Analyze the role of U.S. businesses in influencing ethical behavior and social responsibility in global markets. Givers Around the World To get a discussion moving ask students: Are Americans Cheap? Or Charitable? This slide shows the world’s top givers based on a share of GDP. Based on this slide Americans appear to be the most charitable in the world based on share of GDP.
  • See Learning Goal 6: Analyze the role of U.S. businesses in influencing ethical behavior and social responsibility in global markets.
  • See Learning Goal 5: Distinguish between compliance-based and integrity-based ethics codes, and list the six steps in setting up a corporate ethics code. Who Gives California has the largest population and it’s residents make the most donations.
  • 1) Many U.S. businesses now demand that international suppliers do not violate U.S. human rights and environmental standards. 2) It’s unlikely there will be a single set of international rules governing multinational companies because of the widespread disparity among global nations as to what constitutes ethical behavior. For example, a gift in one culture can be a bribe in another. In some nations child labor is expected and an important part of a family’s standard of living. The fairness of adhering to U.S. standards of ethical behavior is not as easy as you may think.
  • 1) Ethics are society’s accepted standards of behavior. In other words behaviors accepted by society as right rather than wrong. 2) Ethics reflect people’s proper relationships with one another. Legality is narrower in that it refers to laws we have written to protect ourselves from fraud, theft, and violence. 3) It helps to ask the following questions when faced with an ethical dilemma: Is the proposed action legal? Is it balanced? Would I want to be treated this way? How will it make me feel about myself?
  • 1) Compliance-based ethics codes emphasize preventing unlawful behavior by increasing control and penalizing wrongdoers. Integrity-based ethics codes define the organization’s guiding values, create an environment that support ethically sound behavior, and stress shared accountability. 2) The six steps many believe will improve U.S. business ethics are: (1) Top management must adopt and unconditionally support an explicit corporate code of conduct: (2) Employees must understand that expectations for ethical behavior begin at the top and that senior management expects all employees to act accordingly; (3) Managers and others must be trained to consider the ethical implications of all business decisions; (4) An ethics office must be set up with which employees can communicate anonymously; (5) Outsiders such as suppliers, subcontractors, distributors, and customers must be told about the ethics program; (6) The ethics code must be enforced with timely action if any rules are broken.
  • 1) Corporate social responsibility (CSR) is the concern businesses have for the welfare of society not just for their owners. CSR defenders believe that businesses owe their existence to the societies they serve and cannot succeed in societies that fail. CSR must be responsible to all stakeholders not just investors in the company. 2) A social audit is a systematic evaluation of an organization’s progress toward implementing socially responsible and responsive programs. Many feel a social audit should measure workplace issues, the environment, product safety, community relations, military weapons contracting, international operations and human rights, and respect for the rights of local people.
  • BUS110 Chap 4 - Demanding Ethical and Socially Responsible Behavior

    1. 1. * * Chapter Four Demanding Ethical and Socially Responsible Behavior Copyright © 2010 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin
    2. 2. STEVE ELLS Chipotle Mexican Grill * * Profile <ul><li>Chipotle is dedicated to producing quality food which has led to current annual sales over $1 billion. </li></ul><ul><li>Ells’ mission is to serve “Food With Integrity.” </li></ul><ul><li>Chipotle is the leading restaurant buyer of humanely raised meats. </li></ul>4-
    3. 3. LIFE AFTER SCANDAL * * Ethics is More Than Legality <ul><li>Scandals have shaken the real estate, mortgage and banking industries. </li></ul><ul><li>How do we restore trust in the free market system? </li></ul><ul><ul><li>Punish those who have broken the law. </li></ul></ul><ul><ul><li>Make accounting records more transparent. </li></ul></ul><ul><ul><li>Consider what is ethical, not just what is legal. </li></ul></ul>LG1 4-
    4. 4. WHAT are ETHICS? * * Ethical Standards are Fundamental <ul><li>Ethics -- The standards of moral behavior. Behaviors that are accepted by society as right versus wrong. </li></ul>LG1 4-
    5. 5. BASIC MORAL VALUES * * Ethical Standards are Fundamental <ul><ul><li>Right: </li></ul></ul><ul><ul><ul><li>Integrity </li></ul></ul></ul><ul><ul><ul><li>Respect for human life </li></ul></ul></ul><ul><ul><ul><li>Self control </li></ul></ul></ul><ul><ul><ul><li>Honesty </li></ul></ul></ul><ul><ul><ul><li>Courage </li></ul></ul></ul><ul><ul><ul><li>Self-sacrifice </li></ul></ul></ul><ul><li>Wrong : </li></ul><ul><ul><li>Cheating </li></ul></ul><ul><ul><li>Cowardice </li></ul></ul><ul><ul><li>Cruelty </li></ul></ul>LG1 4-
    6. 6. PAYING the PRICE (Legal Briefcase) * * <ul><ul><ul><li>Enron : One executive is serving a 24 year sentence for accounting fraud while another will be released in October 2011. </li></ul></ul></ul><ul><ul><ul><li>Arthur Andersen : Convicted of tampering with witnesses, the company was dissolved and about 28,000 people lost their jobs. </li></ul></ul></ul><ul><ul><ul><li>Tyco International : Two executives stole $600 million from the company and are scheduled to be released from prison in 2030. </li></ul></ul></ul><ul><ul><ul><li>Adelphia Communication : Two executives were convicted of conspiracy, bank and securities fraud and given sentences of 15 and 20 years. </li></ul></ul></ul><ul><ul><ul><li>WorldCom : Former CEO was convicted of fraud, conspiracy and false filings and sentenced to 25 years. </li></ul></ul></ul>4-
    7. 7. ETHICS and YOU * * Ethics Begins with Each of Us <ul><ul><ul><li>Plagiarizing from Internet materials is the most common form of cheating in schools today. </li></ul></ul></ul>LG2 <ul><ul><ul><li>Studies found a strong relationship between academic dishonesty and dishonesty at work. </li></ul></ul></ul>4-
    8. 8. FACING ETHICAL DILEMMAS * * Ethics Begins with Each of Us <ul><ul><ul><li>Ask yourself these questions: </li></ul></ul></ul><ul><ul><ul><ul><li>Is it legal? </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Is it balanced? </li></ul></ul></ul></ul><ul><ul><ul><ul><li>How will it make me feel about myself? </li></ul></ul></ul></ul>LG2 4-
    9. 9. To TUBE or NOT to TUBE (Making Ethical Decisions) * * <ul><ul><ul><li>Every minute, people upload 10 hours of video to YouTube – not all is user-generated content. </li></ul></ul></ul><ul><ul><ul><li>Viacom sued YouTube for $1 billion for allowing episodes of its popular shows on the site. </li></ul></ul></ul><ul><ul><ul><li>Viacom holds YouTube responsible for carrying the illegal content, rather than the individuals who uploaded it . </li></ul></ul></ul><ul><ul><ul><li>Who do you think should be accountable for the copyright violations -- the website or those who uploaded the videos? </li></ul></ul></ul>4-
    10. 10. ETHICS START at the TOP * * Managing Businesses Ethically and Responsibly <ul><ul><ul><li>Trust between workers and managers must be based on fairness, honesty, openness and moral integrity. </li></ul></ul></ul><ul><ul><ul><li>Leadership can help instill corporate values in employees. </li></ul></ul></ul>LG3 4-
    11. 11. FACTORS INFLUENCING MANAGERIAL ETHICS * * Managing Businesses Ethically and Responsibly LG3 4- Individual Organizational Environmental <ul><li>Values </li></ul><ul><li>Work Background </li></ul><ul><li>Family Status </li></ul><ul><li>Personality </li></ul><ul><li>Top Level Management Philosophy </li></ul><ul><li>Firm’s Reward System </li></ul><ul><li>Job Dimensions </li></ul><ul><li>Competition </li></ul><ul><li>Economic Conditions </li></ul><ul><li>Social/Cultural Institutions </li></ul>
    12. 12. ETHICS CODES * * Setting Corporate Ethical Standards <ul><li>Compliance-Based Ethics Code – </li></ul><ul><ul><li>Emphasizes prevention of unlawful behavior by increasing control and by penalizing wrongdoers. </li></ul></ul><ul><li>Integrity-Based Ethics Code – </li></ul><ul><ul><li>Define guiding values </li></ul></ul><ul><ul><li>Create an environment that supports ethically sound behavior </li></ul></ul><ul><ul><li>Stress a shared accountability among employees. </li></ul></ul>LG4 4-
    13. 13. HOW to IMPROVE AMERICA’S BUSINESS ETHICS * * Setting Corporate Ethical Standards <ul><ul><li>Top management must adopt and unconditionally support an explicit corporate code of conduct. </li></ul></ul><ul><ul><li>Employees must understand that senior management expects all employees to act ethically. </li></ul></ul><ul><ul><li>Managers and others must be trained to consider the ethical implications of all business decisions. </li></ul></ul><ul><ul><li>(continued) </li></ul></ul>LG4 4-
    14. 14. HOW to IMPROVE AMERICA’S BUSINESS ETHICS * * Setting Corporate Ethical Standards <ul><ul><li>An ethics office must be set up with which employees can communicate anonymously. Whistleblowers -- People who report illegal or unethical behavior. </li></ul></ul>LG4 <ul><li>Involve outsiders such as suppliers, subcontractors, distributors and customers. </li></ul><ul><li>The ethics code must be enforced. </li></ul>4-
    15. 15. <ul><li>Whistleblowers </li></ul>
    16. 16. HOW to PREVENT UNETHICAL BEHAVIORS * * Source: James Gehrke, Magnify Leadership & Development, November 2008. <ul><li>Managers must communicate the organization’s vision on ethical behavior. </li></ul><ul><li>Organizations must have a code of ethics . </li></ul><ul><li>Policies have to be enforced regarding ethical offences. </li></ul><ul><li>Ethical responsibility must be taught to all employees. </li></ul><ul><li>(continued) </li></ul>LG4 Setting Corporate Ethical Standards 4-
    17. 17. HOW to PREVENT UNETHICAL BEHAVIORS * * Source: James Gehrke, Magnify Leadership & Development, November 2008. <ul><li>Discussions of ethics must be included in the decision-making process. </li></ul><ul><li>Accountability must be taken seriously at all levels in the organization. </li></ul><ul><li>Organizations must act fast when a crisis occurs. </li></ul><ul><li>Employees must know they have to defend and maintain the company’s reputation. </li></ul>LG4 Setting Corporate Ethical Standards 4-
    18. 18. CORPORATE SOCIAL RESPONSIBILITY * * Corporate Social Responsibility <ul><li>Corporate Social Responsibility (CSR) – </li></ul><ul><ul><li>The concern businesses have for the welfare of society. </li></ul></ul><ul><ul><li>CSR </li></ul></ul><ul><ul><ul><li>based on a commitment to integrity, fairness, and respect. </li></ul></ul></ul><ul><ul><li>CSR proponents </li></ul></ul><ul><ul><ul><li>say that businesses owe existence to societies they serve and cannot exist in societies that fail. </li></ul></ul></ul>LG5 4-
    19. 19. 4- Levels of Corporate Social Responsibility Societal Responsibility Stakeholder Responsibility Profit Responsibility Owners/Stockholders General Public Customers Employees Suppliers/Distributors Ecological Environment Public Interest Groups Source: Marketing , 5/E by Berkowitz, Kerin, Hartley, and Rudelius.
    20. 20. CORPORATE PHILANTHROPY and SOCIAL INITIATIVES * * Corporate Social Responsibility <ul><li>Corporate Philanthropy – </li></ul><ul><ul><li>Includes charitable donations. </li></ul></ul><ul><li>Corporate Social Initiatives – </li></ul><ul><ul><li>Includes enhanced forms of corporate philanthropy. </li></ul></ul>LG5 4-
    21. 21. CORPORATE RESPONSIBILITY and POLICY * * Corporate Social Responsibility <ul><li>Corporate Responsibility – </li></ul><ul><ul><li>Includes everything from hiring minority workers to making safe products, minimizing pollution, using energy wisely, and providing a safe work environment. </li></ul></ul><ul><li>Corporate Policy – </li></ul><ul><ul><li>Position a firm takes on social and political issues. </li></ul></ul>LG5 4-
    22. 22. POSTIVE IMPACTS of COMPANIES * * Corporate Social Responsibility <ul><ul><li>Xerox offers a Social Service Leave program. </li></ul></ul><ul><ul><ul><li>Citizen Corps encourages volunteers to help strengthen homeland security by helping in their community. </li></ul></ul></ul><ul><ul><ul><li>Two-thirds of MBA students surveyed reported they would take a lower salary to work for a socially responsible company. </li></ul></ul></ul>LG5 4-
    23. 23. To WHOM MUCH HAS BEEN GIVEN… America’s Charitable Giving * * Source: Wall Street Journal, www.online.wsj.com , June 23, 2008. Corporate Social Responsibility LG5 4-
    24. 24. HELPING HANDS Most Generous Celebrities* * * Source: Parade Magazine, www.parade.com , September 14, 2008. Corporate Social Responsibility LG5 *Donations made in 2007 4- Who? How Much? Oprah Winfrey $50.2 Million Herb Alpert $13 Million Barbara Streisand $11 Million Paul Newman $10 Million Mel Gibson $9.9 Million Angelina Jolie & Brad Pitt $8.4 Million Michael Jordan $5 Million Eric Lindros $5 Million Lance Armstrong $5 Million
    25. 25. GENEROUS AMERICANS Americans Donated $295,020,000,000 in 2006 * * Source: Fast Company, www.fastcompany.com , May 2008. Corporate Social Responsibility LG5 4-
    26. 26. PRESIDENT KENNEDY’S BASIC RIGHTS of CONSUMERS * * Responsibility to Customers <ul><ul><li>The Right to Safety </li></ul></ul><ul><ul><li>The Right to be Informed </li></ul></ul><ul><ul><li>The Right to Choose </li></ul></ul><ul><ul><li>The Right to be Heard </li></ul></ul>LG5 4-
    27. 27. INSIDER TRADING * * Responsibility to Investors <ul><li>Insider Trading – </li></ul><ul><ul><li>Insiders using private company information to further their own fortunes or those of their family and friends. </li></ul></ul><ul><li>Unethical behavior does financial damage to a company and investors are cheated. </li></ul>LG5 4-
    28. 28. RESPONSIBILITY to EMPLOYEES * * Responsibility to Employees <ul><li>Create jobs and provide a chance for upward mobility. </li></ul><ul><li>Treat employees with respect. </li></ul><ul><li>Offer salaries and benefits that help employees reach their personal goals. </li></ul>LG5 4-
    29. 29. AMERICA’S MOST ADMIRED COMPANIES * * Source: Fortune, www.fortune.com , March, 2009. <ul><li>Apple </li></ul><ul><li>Berkshire Hathaway </li></ul><ul><li>Toyota </li></ul><ul><li>Google </li></ul><ul><li>Johnson & Johnson </li></ul><ul><li>Proctor & Gamble </li></ul><ul><li>FedEx </li></ul><ul><li>Southwest Airlines </li></ul><ul><li>General Electric </li></ul><ul><li>Microsoft </li></ul><ul><li>Wal-Mart </li></ul><ul><li>Coca-Cola </li></ul><ul><li>Walt Disney </li></ul><ul><li>Wells Fargo </li></ul><ul><li>Goldman Sachs </li></ul><ul><li>McDonald’s </li></ul><ul><li>IBM </li></ul><ul><li>3M </li></ul><ul><li>Target </li></ul><ul><li>J.P. Morgan Chase </li></ul>Responsibility to Employees LG5 4-
    30. 30. SOCIETY and the ENVIRONMENT * * Responsibility to Society and the Environment <ul><li>Over one-third of working Americans receive their salaries from nonprofits –dependent on funding from others. </li></ul><ul><li>The green movement emerged as concern about global warming increased. </li></ul><ul><li>Many companies are trying to minimize their carbon footprints – the amount of carbon released during an item’s production, distribution, consumption and disposal. </li></ul>LG5 4-
    31. 31. RESPONSIBILITY to the ENVIRONMENT * * Responsibility to Society and the Environment <ul><li>Environmental efforts may increase costs but can offer good opportunities. </li></ul><ul><li>The emerging renewable-energy and energy-efficiency industries account for 8.5 million U.S. jobs. </li></ul>LG5 <ul><li>By 2030, as many as 40 million “Green” jobs will be created. </li></ul>4-
    32. 32. GREEN GREED (Thinking Green) * * <ul><ul><ul><li>With public concern over the environment, companies are finding greener ways of doing business. </li></ul></ul></ul><ul><ul><ul><li>Some companies are claiming they are more environmentally responsible than they actually are, a practice called “greenwashing”. </li></ul></ul></ul><ul><ul><ul><li>Web sites such as Greener Choices and Greenwashing Index screen ads for greenwashing. </li></ul></ul></ul>4-
    33. 33. SOCIAL AUDITING * * Social Auditing <ul><li>Social Audit – </li></ul><ul><ul><li>Systematic evaluation of an organization’s progress toward implementing programs that are socially responsible and responsive. </li></ul></ul><ul><ul><li>Four Types of Social Audit Watchdogs </li></ul></ul><ul><ul><ul><li>Socially conscious investors </li></ul></ul></ul><ul><ul><ul><li>Environmentalists </li></ul></ul></ul><ul><ul><ul><li>Union officials </li></ul></ul></ul><ul><ul><ul><li>Customers </li></ul></ul></ul>LG5 4-
    34. 34. INTERNATIONAL ETHICS * * International Ethics and Social Responsibility <ul><li>Many businesses want socially responsible behavior from their international suppliers. </li></ul><ul><li>The Joint Initiative on Corporate Accountability and Workers’ Rights was designed to make creating a single set of labor standards and inspecting factories easier. </li></ul><ul><li>In the 1970s, the Foreign Corrupt Practices Act criminalized the act of paying foreign businesses or government leaders in order to get business. </li></ul>LG6 4-
    35. 35. Review Only
    36. 36. GIVERS AROUND the WORLD Share of GDP * * Source: Forbes, www.forbes.com , March 24, 2008. International Ethics and Social Responsibility LG6 4-
    37. 37. ETHICAL CULTURE CLASH (Reaching Beyond Our Borders) * * <ul><ul><ul><li>Almost half of Motorola’s employees live outside the U.S. </li></ul></ul></ul><ul><ul><ul><li>A Motorola employee returns to his home country to work and the company reimburses living expenses so he can live in a safe area. The employee is trying to do the honorable thing for his family and the company is trying to keep the employee safe. </li></ul></ul></ul><ul><ul><ul><li>If the employee uses the money to help his family instead, is it right for the company to stop payment? </li></ul></ul></ul>4-
    38. 38. WHO GIVES? Five States Contribute More Than a Third of the Nation’s Donations * * Source: Conde Nast Portfolio, www.portfolio.com , January 2008. <ul><li>California – 12.1% </li></ul><ul><li>New Jersey – 8.9% </li></ul><ul><li>Pennsylvania – 5.2% </li></ul><ul><li>Washington – 5% </li></ul><ul><li>New York – 5% </li></ul>Corporate Social Responsibility LG5 4-
    39. 39. PROGRESS ASSESSMENT * * Progress Assessment <ul><ul><ul><li>How are U.S. businesses demanding socially responsible behavior from their international suppliers? </li></ul></ul></ul><ul><ul><ul><li>Why is it unlikely that there will be a single set of international rules governing multinational companies soon? </li></ul></ul></ul>4-
    40. 40. PROGRESS ASSESSMENT * * Progress Assessment <ul><ul><ul><li>What are ethics? </li></ul></ul></ul><ul><ul><ul><li>How do ethics differ from legality? </li></ul></ul></ul><ul><ul><ul><li>When faced with ethical dilemmas, what questions can you ask yourself that might help you make ethical decisions? </li></ul></ul></ul>4-
    41. 41. PROGRESS ASSESSMENT * * Progress Assessment <ul><ul><ul><li>What are compliance-based and integrity-based ethics codes? </li></ul></ul></ul><ul><ul><ul><li>What are the six steps to follow in establishing an effective ethics program in a business? </li></ul></ul></ul>4-
    42. 42. PROGRESS ASSESSMENT * * Progress Assessment <ul><ul><ul><li>What’s corporate social responsibility, and how does it relate to each of a business’s major stakeholders? </li></ul></ul></ul><ul><ul><ul><li>What’s a social audit, and what kinds of activities does it monitor? </li></ul></ul></ul>4-

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