Mine presentaion on b.ethics and social responsibilty

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Mine presentaion on b.ethics and social responsibilty

  1. 1. PRESENTATION TOPIC: Business Ethics And Social Responsibility.
  2. 2. 7 - 2 GROUP MEMBERS: Farhan Ahmad (2729) Muhammad Ishaq (2750) Rezwan Ullah (2753) Shafqat-ullah Jan (2755) Izhar Ahmad (2771)
  3. 3. 7 - 3 INTRODUCTION  Businesses organized in the country are subject to its laws.  They are also subject to the laws of other countries in which they operate.  Business persons owe a duty to act ethically in the conduct of their affairs in that particular society.  Businesses owe a social responsibility not to harm society where it is operating.
  4. 4. 7 - 4 LAW AND ETHICS  Ethics –Ethics – A set of moral principles or values that governs the conduct of an individual or a group.  What is lawful conduct is not always ethical conduct.  The law may permit something that would be ethically wrong.
  5. 5. 7 - 5 MORAL THEORIES AND BUSINESS ETHICS Ethical RelativismEthical Relativism EthicalEthical FundamentalismFundamentalism UtilitarianismUtilitarianism Kantian EthicsKantian EthicsRawls’s SocialRawls’s Social Justice TheoryJustice Theory
  6. 6. 7 - 6 THEORIES OF ETHICS – SUMMARY (1 OF 2) TheoryTheory DescriptionDescription EthicalEthical fundamentalismfundamentalism Persons look to an outside source or centralPersons look to an outside source or central figure for ethical guidelines.figure for ethical guidelines. UtilitarianismUtilitarianism Persons choose the alternative that wouldPersons choose the alternative that would provide the greatest good to society.provide the greatest good to society. Kantian ethicsKantian ethics A set of universal rules establishes ethicalA set of universal rules establishes ethical duties. The rules are based on reasoningduties. The rules are based on reasoning and require (1) consistency in applicationand require (1) consistency in application and (2) reversibility.and (2) reversibility. Copyright © 2004 by Prentice-Hall. All rights reserved.
  7. 7. 7 - 7 THEORIES OF ETHICS – SUMMARY (2 OF 2) TheoryTheory DescriptionDescription Rawls’s socialRawls’s social justice theoryjustice theory Moral duties are based on an implied socialMoral duties are based on an implied social contract. Fairness is justice. Rules arecontract. Fairness is justice. Rules are established from an original position.established from an original position. Ethical relativismEthical relativism Individuals decide what is ethical based onIndividuals decide what is ethical based on their own feelings as to what is right ortheir own feelings as to what is right or wrong.wrong.
  8. 8. 7 - 8 THE SOCIAL RESPONSIBILITY OF BUSINESS  Business does not operate in a vacuum.  Decisions made by business have far-reaching effects on society.  In the past, many business decisions were made solely on a cost-benefit analysis.
  9. 9. 7 - 9 WHAT IS SOCIAL RESPONSIBILITY?  A business obligation to maximize its positive impact and decrease its negative impact on a society.  Doing the right thing in business by making decisions that are right for the environment,consumer,employees,communities,s takeholders and all other memebers of thepublic sphere.
  10. 10. 7 - 10 Ethics BriefEthics Brief Corporations that conduct socialCorporations that conduct social audits will be more apt to preventaudits will be more apt to prevent unethical and illegal conduct byunethical and illegal conduct by managers, employees, and agents.managers, employees, and agents.
  11. 11. 7 - 11 THE SOCIAL RESPONSIBILITY OF BUSINESS (CONTINUED)  Corporations are considered to owe some degree of social responsibilitysocial responsibility for their actions.  Ethics is a function of history, culture, religion, and other factors.  Therefore, ethical standards vary from country to country.  The Caux Round TableCaux Round Table promulgated an international ethics code called the Principles forPrinciples for International BusinessInternational Business.
  12. 12. 7 - 12 THE CAUX ROUND TABLE PRINCIPLES:  Principle 1Principle 1 The Responsibilities of Business Beyond Shareholders Toward Shareholders  Principle 2Principle 2 The Economic and Social Impact of Business: Toward Innovation, Justice, and World Community
  13. 13. 7 - 13 THE CAUX ROUND TABLE PRINCIPLES: (CONTINUED)  Principle 3Principle 3 Business Behavior: Beyond the Letter of Law Toward a Spirit of Trust  Principle 4Principle 4 Respect for Rules  Principle 5Principle 5 Support for Multilateral Trade  Principle 6Principle 6 Respect for the Environment  Principle 7Principle 7 Avoidance of Illicit Operations
  14. 14. 7 - 14 THEORIES OF SOCIAL RESPONSIBILITY MaximizingMaximizing ProfitsProfits MoralMoral MinimumMinimum StakeholderStakeholder InterestInterest CorporateCorporate CitizenshipCitizenship
  15. 15. 7 - 15 MAXIMIZING PROFITS  A theory of social responsibility that says a corporation owes a duty to take actions that maximize profits for shareholders.  The interests of other constituencies are not important in and of themselves.
  16. 16. 7 - 16 MORAL MINIMUM  A theory of social responsibility that says a corporation’s duty is to make a profit while avoiding harm to othersavoiding harm to others.  As long as business avoids or corrects the social injury it causes, it has met its duty of social responsibility.
  17. 17. 7 - 17 MORAL MINIMUM (CONTINUED)  The legislative and judicial branches of government have established laws that enforce the moral minimum of social responsibility on corporations.  e.g., Occupational safety laws  e.g., Consumer protection laws for product safety
  18. 18. 7 - 18 STAKEHOLDER INTEREST  A theory of social responsibility that says a corporation must consider the effects its actions have on persons other than its stockholdersother than its stockholders.  This theory is criticized because it is difficult to harmonize the conflicting interests of stakeholders.
  19. 19. 7 - 19 OTHER STAKEHOLDERS OF A BUSINESS CustomersCustomers EmployeesEmployees SuppliersSuppliers LocalLocal CommunityCommunity CreditorsCreditors
  20. 20. 7 - 20 CORPORATE CITIZENSHIP  A theory of responsibility that says a business has a responsibility to do good.  Business is responsible for helping to solve social problems.  Corporations owe a duty to promote the same social goals as do individual members of society.
  21. 21. 7 - 21 CORPORATE CITIZENSHIP (CONTINUED)  This theory argues that corporations owe a debt to society to make it a better place.  This duty arises because of the social power bestowed on corporations.  A major criticism of this theory is that the duty of a corporation to “do good” cannot be expanded beyond certain limits.
  22. 22. 7 - 22 THEORIES OF SOCIAL RESPONSIBILITY – SUMMARY TheoryTheory Social ResponsibilitySocial Responsibility Maximizing profitsMaximizing profits To maximize profits for stockholders.To maximize profits for stockholders. Moral minimumMoral minimum To avoid causing harm and to compensate forTo avoid causing harm and to compensate for harm caused.harm caused. Stakeholder interestStakeholder interest To consider the interests of all stakeholders,To consider the interests of all stakeholders, including stockholders, employees, customers,including stockholders, employees, customers, suppliers, creditors, and local community.suppliers, creditors, and local community. Corporate citizenshipCorporate citizenship To do good and solve social problemsTo do good and solve social problems
  23. 23. 7 - 23 THE CORPORATE SOCIAL AUDIT  Corporate audits should be extended to include the moralmoral healthhealth of the corporation.  Corporations that conduct social audits will be more apt to prevent unethical and illegal conduct by managers, employees, and agents.
  24. 24. 7 - 24 THE CORPORATE SOCIAL AUDIT (CONTINUED)  The audit would examine how well:  Employees have adhered to the company’s code of ethics; and  The corporation has met its duty of social responsibility.
  25. 25. 7 - 25 THE CORPORATE SOCIAL AUDIT (CONTINUED)  Such audits would focus on the corporation’s efforts to:  Promote employment opportunities for members of protected classes  Worker safety  Environmental protection  Consumer protection
  26. 26. 7 - 26 THE CORPORATE SOCIAL AUDIT (CONTINUED) Companies should institute the followingCompanies should institute the following procedures when conducting a social audit:procedures when conducting a social audit:  An independent outside firm should be hired to conduct the audit.  This will ensure autonomy and objectivity.  The company’s personnel should cooperate fully with the auditing firm while the audit is being conducted.
  27. 27. 7 - 27 THE CORPORATE SOCIAL AUDIT (CONTINUED) Procedures for conducting the auditProcedures for conducting the audit (continued):(continued):  The auditing firm should report its findings directly to the company’s board of directors.  The results of the audit should be reviewed by the company’s board of directors.
  28. 28. 7 - 28 THE CORPORATE SOCIAL AUDIT (CONTINUED) Procedures for conducting the auditProcedures for conducting the audit (continued):(continued):  The board of directors should determine how the company can:  Better meet its duty of social responsibility; and  Use the audit to implement a program to correct any deficiencies it finds.
  29. 29. 7 - 29 UNITED NATIONS CODE OF CONDUCT FOR TRANSNATIONAL CORPORATIONS  Respect for National Sovereignty  Adherence to Socio-Cultural Objectives and Values  Respect for Human Rights and Fundamental Freedoms  Abstention from Corrupt Practices
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