Chapter4

149
-1

Published on

Published in: Business, Technology
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
149
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
0
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Chapter4

  1. 1. ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.4©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
  2. 2. ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.4©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.BusinessEthics andSocialResponsibility:Doing Well By DoingGood2LO1 What is ethics? What are theuniversal ethics standards?LO2 What are business ethics? What isan ethical dilemma?LO3 How does ethics relate to theindividual and the organization?LO4 What is social responsibility andhow does it impact stakeholdergroups?LO5 What is the role of socialresponsibility in the global arena?LO6 How do companies evaluate theirefforts to be socially responsible?
  3. 3. ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.Ethics & Social Responsibility:A Close Relationship3ETHICSBeliefs aboutright and wrongSOCIALRESPONSIBILITYThe obligation of a businessto contribute to society
  4. 4. ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.Defining Ethics4
  5. 5. ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.Universal Ethical Standards5
  6. 6. ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.Business Ethics: Not anOxymoron6Ethical DilemmaNegative consequencesTwo unfavorable optionsEthical LapseClear misconductMost challengingbusiness decisions seemto arise when values arein conflict.Business Ethics is theapplication of right andwrong in the workplace.
  7. 7. ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.Bad News for Business—WorseNews Tomorrow!739% believe that a person has to lie or cheatsometimes in order to succeed.59% admitted that they cheated on a test atschool within the past 12 months.72% agree that it’s sometimes OK to hit or threatena person who makes me very angry.18% admitted that they stole something froma friend within the past 12 months.28% admitted that they stole somethingfrom a store within the past 12 months.A study of 43,000 high school students revealed:High school attitudes are a clear predictor of adult behavior.© DIGITAL VISION/GETTY IMAGESSource: The Ethics of American Youth. What would Honest Abe say? Josephson Institute Press Release, February 10, 2011, Character Counts websitehttp://charactercounts.org/programs/reportcard/2010/installment02_report-card_honesty-integrity.html, accessed February 20, 2011
  8. 8. ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.Ethics: Multiple TouchpointsIndividuals must maketheir ownethical choicesBUTThe organization canhave a significantinfluence on decisions8© STOCKBYTE/GETTY IMAGES
  9. 9. ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.Ethics and the Individual:The Power of One9Key Principles of Decisions:1. Do you fully understand each dimension of the problem?2. Who would benefit? Who would suffer?3. Are the alternative solutions legal? Are they fair?4. Does your decision make you comfortable as a “gut feel” level?5. Could you defend your decision on the nightly TV news?6. Have you considered and reconsidered your response to eachquestion?
  10. 10. ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.Ethics and the Organization:It Takes a Village• Ethical influence starts at the top, actions mattermore than words.• The Big Three Automakers went to Washington torequest a $25 billion bailout package in corporatejets• After the government gave AIG $85 billion to avoidbankruptcy; the company spent $440,000 on a salesretreat• Disney CEO hired his friend who was fired forincompetence after 14 months; the 140 millionsettlement and his expense account details caused10Source: Big Three auto CEOs flew private jets to ask for taxpayer money by Josh Levs, November 19, 2008, CNN website, http://www.cnn.com/2008/US/11/19/autos.ceo.jets/, accessed February 2, 2009.Lawmakers, Questioning Fed Bailout, Seek AIG `Junket Refund By Ryan J. Donmoyer - October 9, 2008 Bloomberg website http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aPlPYw6JXIBU&refer=us, accessed February 21, 2011
  11. 11. ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.How Would you Judge the Actions ofthese Business Leaders?11Stanley O’Neal began as Merrill Lynch began racking up lossesthat led to its collapse, he announced his “retirement.”Sanjay Kumar of Computer Associates was convicted ofmassive accounting fraud in 2006.Martha Stewart was convicted of obstructing justice in a $40,000well timed stock sale.Sherron Watkins, former vice president of Enron reported the accountingIrregularities that led to the discovery of corporate fraud.Pierre Omidyar, the founder of eBay has given away over$100 million to Tufts University Micro Finance Fund.Whole Foods CEO, John Mackey posted thousands of comments on Yahoo Finance,hyping his company and attacking Wild Oats, which he was planning to purchase.
  12. 12. ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.Creating and Maintaining andEthical Organization12Role of TopManagementthe tone from the topmust be reinforced bybehaviorRole of TopManagementthe tone from the topmust be reinforced bybehaviorOrganizationalCulturestrongest variable onethical conductOrganizationalCulturestrongest variable onethical conduct
  13. 13. ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.Bringing Code of Ethics to Life13Code of Ethics is awritten documentprovidingdirection foremployees tomake ethicaldecisions.1. Executive Buy-in2. Clear expectations3. Integrated approach4. Global and local5. Whistleblower support6. Reporting andEnforcement© Brian A Jackson / Shutterstock.com
  14. 14. ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.Defining Social ResponsibilityCore stakeholder groups includeemployees, customers, investors, andcommunity.14Social Responsibility is the obligation of abusiness to contribute to society.
  15. 15. ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.The Stakeholder Approach15EMPLOYEESINVESTORSCOMMUNITYENVIRONMENTCUSTOMERSCreating Jobs that WorkSustainable DevelopmentValue, Honesty and CommunicationFair Stewardship and Full DisclosureBusiness and the Greater Good
  16. 16. ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.The Spectrum of Social Responsibility16
  17. 17. ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.Stakeholders17Stakeholders are any groups that have a stakeor a personal interest in the performance andactions of an organization.
  18. 18. ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.• Meet Legal Standards• Workplace Safety• Minimum Wage/OvertimeRequirements• Protection from SexualHarassment• Provide Work/Life Balance Family and Medical Leave18Responsibility to Employees:Creating Jobs that Work© Purestock/ Jupiterimages
  19. 19. ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.How Would You Judge theActions of These Firms?1. Clorox introduced a line of “99% natural cleaning”products called Green Works. The Sierra Clubendorsed the product line. Clorox makes annualcontributions to the Sierra Club2. Tyson has been accused of unfair business practicesand unsavory labor/environmental practices. In2009, the farmer gave 11% of its profits to charity.3. As obesity among kids grows, Kraft Foods pledgedto stop advertising unhealthy yet profitable foods toyoung children.4. After receiving $45 billion in taxpayer bailout funds,Bank of America sponsored a five-day carnival-likeevent outside the 2009 Super Bowl.19©TheStudioDog/Photodisc/GettyImages
  20. 20. ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Right to Be Safe The Right to Be Informed The Right to Choose The Right to be Heard The Right to Be Safe The Right to Be Informed The Right to Choose The Right to be HeardPlanned Obsolescence –Deliberately designing products to fail in order to shortenthe time between consumer repurchases20Responsibility to Customers: Value,Honesty, and CommunicationConsumerism: a socialmovement suggests thatconsumer rights shouldbe the starting point.President Kennedydefined these rights.
  21. 21. ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.Amazon: Who Owns the Books• In 2009, Amazon remotely andabruptly deleted digital editions ofbooks from customers’ Kindledevices• Customers were furious at theprivacy violation• Amazon refunded the purchasesand issued an apology• Amazon recovered; the Kindleremains Amazon’s best sellingproduct and sales of digital bookshas hit 48%21© David Robertson / AlamyThe year in technology industry apologies By Bob Brown, Network World, 12/01/2009, Network World website http://www.networkworld.com/slideshows/2009/120109-apologies.html#slide2, accessed February 22, 2011; Amazon Erases OrwellBooks From Kindle by Brad Stone July 17, 2009, New York Times website, http://www.nytimes.com/2009/07/18/technology/companies/18amazon.html, accessed February 22, 2011; The Customer Is Always Right by Daniel Lyons, December 21, 2009,NewsWeek website, http://www.newsweek.com/2009/12/20/the-customer-is-always-right.html, accessed February 22, 2011.
  22. 22. ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.Apple Angst• Apple introduced the iPhone on June 9th,2007 to rave reviews despite $599 pricetag• Apple dropped the price to $200 toincrease customers• Customers were livid!• Steve Jobs (former Apple CEO) apologizedand gave customers $100 store credit22Source: http://www.apple.com/hotnews/openiphoneletter/, accessed February 3, 2009; Apple’s customer satisfaction up despite struggling industry by Jeff Smykil, August 19, 2008, Ars Technica website,http://arstechnica.com/apple/news/2008/08/apples-customer-satisfaction-up-despite-struggling-industry.ars, accessed February 3, 2009.
  23. 23. ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.• Legal RequirementsSarbanes-Oxley• Responsible use ofCorporate DollarsHonesty• Is Optimism orPessimism SociallyResponsible?23Responsibility to Investors: FairStewardship and Full Disclosure
  24. 24. ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.Corporate Philanthropy -business donations tononprofit groups, includingboth money and time.CorporateResponsibility -actions of the business ratherthan donations of money andtimeCause-related Marketing –partnerships between businessesand nonprofit organizations,designed to spike sales for thecompany and raise moneyfor the nonprofit24Responsibility to the Community:Business and the Greater Good©TheStudioDog/Photodisc/GettyImages
  25. 25. ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.Scholfield HondaVideo HereVideo Here25
  26. 26. ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.Gather Around the Water Cooler:Let’s Talk•26©iStockphoto.com/DNY59• How is Scholfield Honda practicing socialresponsibility?• What are the benefits of this hybridtechnology to stakeholders?• How is the economic environmentinfluencing car buyers to go green?
  27. 27. ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.Greenwashing• Greenwashing is when an organization spendstime/money claiming to be “green” throughmarketing• An energy company advertises “green” technologythey’re working on — but the technology is only asmall part of a “not-so green” business.• A hotel chain calls itself “green” because it asksguests to sleep on the same sheets and reuse towelsbut does very little to save water and energy• Can “doing good” be unethical?27©TheStudioDog/Photodisc/GettyImagesSource: http://www.greenwashingindex.com/what.php, accessed August 4, 2011.
  28. 28. ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.Sustainable DevelopmentDoing business to meet theneeds of this generationwithout harming the ability offuture generationsCarbon FootprintAmount of harmful greenhousegases a firm emitsGreen MarketingMarketing environmentalproducts and practices forcompetitive advantageResponsibility to the Environment28
  29. 29. ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.Corporations Tracking Emissions• The goal is for companies to becomecarbon neutral; emit zero gasses or tocounteract impact of emissions• Dell Inc. became carbon neutral in 2008• Corporations track three types ofemissions: Scope 1: direct emissions from operations Scope 2: emissions from electricity, heat andsteam Scope 3: outside the company boundary that29Source: U.S. Corporations Size Up Their Carbon Footprints by Rachel King, June 1, 2009, Bloomberg Businessweek, Businessweek website,http://www.businessweek.com/technology/content/jun2009/tc2009061_692661.htm, accessed February 24, 2011
  30. 30. ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.Ethics and Social Responsibility inthe Global Arena: A House ofMirrors?Corruption is part of the culturein many countries Bribes or GiftsLabor issues in host countriescan be complicated Living Wage Child Labor30
  31. 31. ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.Going Green: It’s Not JustGovernments• Bank of America reduced paper use by 32% from 2000 TO 2005despite 24% customer growth.• Arrowhead bottled water introduced smaller “Eco Shape” bottlesthat helped save 245 million pounds of plastic resin.• DuPont reduced greenhouse gas emissions during the 1990s by63%.• Telsa Motors is developing environmentally friendly sports carswith virtually no emissions• Hewlett-Packard owns gigantic e-waste recycling plants thatreclaim steel, plastic and toxic chemicals.Sources: BusinessPundit, “25 Big Companies That Are Going Green,” July 29, 2008, <http://www.businesspundit.com/25-big-companies-that-are-going-green/>,(accessed May 17,2010); CNNMoney, “Ten Green Giants,” <http://money.cnn.com/galleries/2007/fortune/0703/gallery.green_giants.fortune/8.html> (accessed May 17, 2010) Arrowhead website,http://www.arrowheadwater.com/KnowH2O/Be-Green.aspx, accessed February 25, 2011.©JameyEkins/Shutterstock.com
  32. 32. ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.A Loaf of Bread and a Packet ofShampoo?C.K. Prahalad believescompanies could add to theglobal economy by providingsmall luxuries to those at“the bottom of thepyramid”32Critics suggest that the strategy is exploitationof the “aspirational poor”What do you think?© imagebroker / Alamy
  33. 33. ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.Ethics and Social Responsibility:Who is Minding the Store?33SOCIAL AUDITA systematic evaluation ofhow well a firm is meeting itsethics and socialresponsibility objectives
  34. 34. ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.Ethical Behavior in The OfficeVideo HereVideo Here34
  35. 35. ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.Gather Around the Water Cooler:Let’s Talk•35©iStockphoto.com/DNY59• If ethical behavior depend on individualsin an organization, how do managerspromote ethical behavior?• Why are all the actions of managersimportant to model ethical behavior?• Do small favors count in modeling ethicalbehavior?
  36. 36. ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.Reality TV: Bobby G. VentureCapitalistVideo HereVideo Here36
  37. 37. ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.Gather Around the Water Cooler:Let’s Talk•37©iStockphoto.com/DNY59• Use the spectrum of social responsibility (i.e.,Figure 4.4 in the text) to evaluate the actions ofthe Vancouver, British Columbia company,Clearly Canadian, and adventure capitalistBobby G, who is an investor in Clearly Canadian.• Is the Nicaraguan clean water project betterdescribed as corporate philanthropy orcorporate responsibility?
  38. 38. ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.4©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.Looking Back• What is ethics? What are the universal ethics standards?• What are business ethics? What is an ethical dilemma?• How does ethics relate to the individual and the organization?• What is social responsibility and how does it impactstakeholder groups?• What is the role of social responsibility in the global arena?• How do companies evaluate their efforts to be sociallyresponsible? 38

×