Business Ethics and Corporate Social Responsibility

2. BUSINESS
ETHICS AND
SOCIAL
RESPONSIBILITY
Entrepreneurship in
Action
Consider Ethics and
Social Responsibility
Going Green
Enter the World of
Business

3.  Business Ethics and Social Responsibility
ethics as the principles and standards that determine
acceptable conduct in business organizations.
The acceptability of behavior in business is
determined by not only the organization but also
stakeholders such as customers, competitors,
government regulators, interest groups, and the public,
as well as each individual’s personal principles and
values.

4.  The Role of Ethics in Business
Why ethics are important in business? Because ethics
concern an individual's moral judgments about right and wrong.
Ethical behaviour and corporate social responsibility can
bring significant benefits to a business.
a. Recognizing Ethical Issues in Business
An ethical issue is an identifiable problem, situation, or
opportunity that requires a person to choose from among several
actions that may be evaluated as right or wrong, ethical or
unethical.
1. Misuse of Company Time.
2. Abusive and Intimidating Behavior.
3. Misuse of Company Resources.
4. Conflict of Interest.

5. b. Fairness and Honesty
Fairness and honesty are at the heart of business ethics and
relate to the general values of decision makers. At a minimum,
businesspersons are expected to follow all applicable laws and
regulations.
1. Communications.
2. Business Relationships.
c. Making Decisions about Ethical Issues
Once a person has recognized an ethical issue and can openly
discuss it with others, he or she has begun the process of
resolving that issue.
d. Improving Ethical Behavior in Business
Ethical decisions in an organization are influenced by three
key factors:
1. individual moral standards
2. the influence of managers and co-workers
3. the opportunity to engage in misconduct

6.  The Nature of Social Responsibility
Classify four stages of social responsibility:
1. financial/economic
2. legal compliance
3. ethics/ethical
4. philanthropy/voluntary (including philanthropic)
 Social Responsibility Issues
Between many social problems that managers must consider
are their relationship with the owner and shareholders,
employees, consumers, the environment and the community.
a. Relations with Owners and Stockholders.
Businesses must fi rst be responsible to their owners, who are
primarily concerned with earning a profi t or a return on their
investment in a company.

7. b. Employee Relations
Another issue of importance to a business is its
responsibilities to employees. Without employees, a
business cannot carry out its goals.
c. Consumer Relations
A critical issue in business today is business’s
responsibility to customers, who look to business to
provide them with satisfying, safe products and to
respect their rights as consumers.
d. Sustainability Issues
Most people probably associate the term
environment with nature, including
wildlife, trees, oceans, and mountains.

8. Going green is defined as making more
environmentally friendly decisions such as to "reduce,
reuse and recycle."
With global warming concerns and rising gas
prices, the U.S. Government has begun to recognize
the need to look toward alternative forms of energy as
a source of fuel and electricity. There have been many
different ideas as to which form of alternative energy
would best suit the United States’ energy needs. These
sources include wind power, solar power, nuclear
power, biofuels, electric cars, and hydro- and
geothermal power. As of yet, no “best” form of
alternative fuel has been selected to replace gasoline.