Chapter 2 Business Ethics and Social Responsibility
Learning Goals1 Explain the concepts of business ethics 4 Describe how businesses’ social and social responsibility responsibility is measured and summarize the responsibilities of2 Describe the factors that influence business to the general public, business ethics. customers, and employees.3 List the stages in the development of 5 Explain why investors and the ethical standards and discuss how financial community are concerned organizations shape ethical behavior. with business ethics and social responsibility.
Concern for Ethical and Societal IssuesBusiness Ethicss The standards of conduct and moral values governing actions and decisions in the work environment. s Social responsibility s Balance between what’s right and what’s profitable s Often no clear-cut choices s Often shaped by the organization’s ethical climateSarbanes-Oxley Acts A 2002 law that added oversight for the nation’s major companies and a special oversight board to regulate public accounting firms that audit the financial records of these corporations.
The Contemporary Ethical Environments High-profile investigations and arrests in headlines.s Vast majority of businesses are ethical.s New corporate officers charged with deterring wrongdoing and ensuring ethical standards.
Business Approach to Ethics and Social Responsibilitys Engage in traditional corporate philanthropy, which involves giving to worthy causes.s Anticipate and manage risks.s Identify opportunities to create value by doing the right thing.s See how Walmart highlights corporate responsibility on its website.
Individuals Make a Differences Individuals can make the difference in ethical expectations and behavior. s Putting own interest ahead of the organization s Lying to employee s Misrepresenting hours s Safety violations s Internet abuses Technology is expanding unethical behavior.
On-the-Job Ethical DilemmasSituation in which a Telling the truth andbusiness decision may adhering to deeply feltbe influenced for ethical principles inpersonal gain. business decisions. Employee’s Businesspeople disclosure of illegal, expect employees to immoral, or unethical be loyal and truthful, practices in the but ethical conflicts organization. may arise.
Ethical Awareness Code of Conduct: Formal statement that defines how the organization expects and requires employees to resolve ethical questions.
Ethical Education Codes of conduct cannot detail a solution for every ethical situation, so corporations provide training in ethical reasoning.
Ethical Action Helping employees recognize and reason through ethical problems and turning them into ethical actions. TI Ethics Quick Test
Ethical LeadershipExecutives must demonstrateethical behavior in theiractions.s use clear, explicit language rather than euphemisms for corrupt behaviors encourage behavior that generates and fosters ethical values
Acting Responsibly to Satisfy SocietySocial Responsibilitys Management’s consideration of profit, consumer satisfaction, and societal well-being of equal value in evaluating the firm’s performance.s Contributions to the overall economy, job opportunities, and charitable contributions and service.
Responsibilities to the General Publics Public Health Issues. What to do about inherently dangerous products such as alcohol, tobacco, vaccines, and steroids.s Protecting the Environment. Using resources efficiently, minimizing pollution. s Green marketing s Sustainabilitys Developing the Quality of the Workforce. Enhancing quality of the overall workforce through education and diversity initiatives.s Corporate Philanthropy. Cash contributions, donations of equipment and products, and supporting the volunteer efforts of company employees.
Responsibilities to CustomersCONSUMERISMs The Right to Be Safe. Safe operation of products, avoiding product liability.s The Right to Be Informed. Avoiding false or misleading advertising and providing effective customer service.s The Right to Choose. Ability of consumers to choose the products and services they want.s The Right to Be Heard. Ability of consumers to express legitimate complaints to the appropriate parties.
Responsibilities to Employeess Workplace Safety. Monitored by Occupational Safety and Health Administration.s Quality-of-Life Issues. Balancing work and family through flexible work schedules, subsidized child care, and regulation such as the Family and Medical Leave Act of 1993.s Ensuring Equal Opportunity on the Job. Providing equal opportunities to all employees without discrimination; many aspects regulated by the Equal Employment Opportunity Commission.s Age Discrimination. Age Discrimination in Employment Act of 1968 protects workers age 40 or older.s Sexual Harassment and Sexism. Avoiding unwelcome actions of a sexual nature; equal pay for equal work without regard to gender.
Responsibilities to Investorss Obligation to make profits for shareholders.s Expectation of ethical and moral behavior.s Protection of investors by the Securities and Exchange Commission and state regulations.