2. ©2015 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 Business Ethics and Social Responsibility:
Doing Well by Doing Good
Define ethics and explain the concept of
universal ethical standards
Describe business ethics and ethical dilemmas
Discuss how ethics relates to both the individual
and the organization
Define social responsibility and examine the
impact on stakeholder groups
Explain the role of social responsibility in the
global arena
Describe how companies evaluate their efforts to
be socially responsible
2
4-1
4-2
4-3
4-4
4-5
4-6

3. Ethics
￭ Sets of beliefs about right and wrong,
good and bad
￭ Challenge - Forming broad agreement on
specific ethical standards
 People come from diverse backgrounds
￭ Legal actions can be unethical
￭ Not all actions have ethical implications
3©2015 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. Exhibit 4.1 - Legal-Ethical Matrix
4©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

5. Exhibit 4.2 - Universal Ethical Standards
5©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Source: © 2009 Josephson Institute. Reprinted from the Josephson Institute’s Report Card on the Ethicsbof American Youth Summary with permission.

6. ©2015 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 its Connections
￭ Business ethics: Application of right
and wrong, good and bad, in a business
setting
￭ Ethical dilemma: Decision that
involves a conflict of values
6

7. Ethics and its Connections
7©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

8. Understanding Social Responsibility
8©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

9. Exhibit 4.3 - Ethics at Work: How Would You
Judge the Actions of These Business Leaders?
9©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

10. Key Elements of a Strong Culture
￭ Exhibition of ethical actions at all levels
of an organization
￭ Accountability for actions
10©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

11. Code of Ethics
Defines the ethical standards of an
organization and gives employees the
information they need to make ethical
decisions across a range of situations
￭In multinational companies:
 It lays out unifying values and priorities for
divisions that are rooted in different cultures
11©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

12. Steps to Maintain Code of Ethics
￭ Get executive buy-in and commitment to
follow-through
￭ Establish expectations for ethical
behavior at all levels of the organization
￭ Integrate ethics into mandatory staff
training
￭ Ensure that the ethics code is both
global and local in scope
12©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

13. Steps to Maintain Code of Ethics
￭ Build and maintain a clear, trusted
reporting structure for ethical concerns
and violations
￭ Establish protection for whistle-blowers
 Whistle-blowers: People who report illegal
or unethical behavior
￭ Enforce the code of ethics
13©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

14. Exhibit 4.4 - The Spectrum of Social
Responsibility
14©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

15. Social Responsibility: Stakeholder Groups
￭ Social responsibility: Obligation of a
business to contribute to society
￭ Stakeholders: Groups that have a stake
in the performance and actions of an
organization
15©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

16. Responsibility to Employees
￭ Employers must comply with laws that
relate to equal opportunity, workplace
safety and minimum wage
￭ Employers ensure:
 Hard work and talent are rewarded
 Proactive protections are established
 Programs for on-site day care
16©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

17. ©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Responsibility to Customers
 Consumerism: Social movement that
focuses on four key consumer rights
 Right to be safe
 Right to be informed
 Right to choose
 Right to be heard
• Planned obsolescence: Deliberately designing
products to fail in order to shorten the time
between consumer repurchases
17

18. ©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Responsibility to Investors
￭ Sarbanes-Oxley Act: Limits conflict-of-
interest issues by restricting the
consulting services that accounting
firms can provide for the companies they
audit
18

19. ©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Responsibility to Community
￭ Corporate philanthropy: All business
donations to nonprofit groups
￭ Cause-related marketing:
Partnership between a business and a
nonprofit
• Designed to spike sales for the company and
raise money for the nonprofit
￭ Corporate responsibility: Focuses on
the actions of the business itself rather
than donations of money and time
19

20. Reality TV Video Slide
20©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
www.cengage.com/introbusiness/book_content/97812851

21. © iStockphoto.com / DNY59
©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
￭ Use the spectrum of social
responsibility to evaluate the actions
of the Vancouver, British Columbia
company, Clearly Canadian, and
adventure capitalist Bobby G, who is
an investor in Clearly Canadian.
￭ Is the Nicaraguan clean water project
better described as corporate
philanthropy or corporate
responsibility?
21

22. ©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Web-link: Sustainability - Responsibility Towards
Environment
￭ The web-link is outlines Levi Strauss’
commitment to environmental
sustainability
http://www.levistrauss.com/sustainability/planet
22

23. Assessing Social Responsibility
23©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
￭ When does a gift become a bribe?
￭ How can corporations monitor corruption
and enforce corporate policies in their
foreign branches?
￭ What are other ways to gain a
competitive edge in countries where
bribes are both accepted and expected?

24. Assessing Social Responsibility
24©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
￭ Does a living wage mean enough to
support an individual or a family?
￭ Does “support” mean enough to subsist
day to day or enough to live in modest
comfort?
￭ Should American businesses ban child
labor in countries where families depend
on their children’s wages to survive?

25. Assessing Social Responsibility
25©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
￭ Social audit : Evaluation of how well a
firm is meeting its ethics and social
responsibility objectives
 Steps involved:
• Establishing goals
• Determining how to evaluate the achievement of
these goals

26. ©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Define ethics and explain the concept of universal
ethical standards
Describe business ethics and ethical dilemmas
Discuss how ethics relates to both the individual and
the organization
Define social responsibility and examine the impact on
stakeholder groups
Explain the role of social responsibility in the global
arena
Describe how companies evaluate their efforts to be
socially responsible
26
4-1
4-2
4-3
4-4
4-5
4-6