This document discusses business ethics and social responsibility. It defines ethics and ethical behavior, and explains that business ethics refers to ethical or unethical behaviors by managers and employers. It also describes three categories of managerial ethics: behaviors toward employees, the organization, and other economic agents. Additionally, it outlines the stakeholder model of responsibility toward customers, employees, investors, suppliers, and local communities. Finally, it discusses areas of social responsibility including the environment, customers, and employees.

1. CHAPTER 3
 CONDUCTING BUSINESS ETHICALLY
AND RESPONSIBLY

2. Ethics in the Workplace
 Ethics: are beliefs about what is right and
wrong or good or bad.
 Ethical Behavior: Behavior conforming to
generally accepted social norms concerning
beneficial and harmful actions.
 Business Ethics: Ethical or Unethical
behaviors by a manager or employer of an
organization.

3. Business and Managerial
Ethics
 Managerial Ethics: Standards or behavior that guide
individual managers in their work. These can be classified
in three categories:
 1. Behavior Toward Employees: cover such matters as
hiring and firing, wages and working conditions and
privacy and respect.
 2. Behavior Toward the Organization: Ethical issues
arise from employee behavior toward employers in such
areas as conflict of interest (e.g. accepting gifts from
suppliers, using business phone / car for personal
interests).
 3. Behavior Toward other Economic Agents: Ethics
incorporated in the relationship between the firm and its
employees, customers, competitors, suppliers, dealers.

4. The Stakeholder Model of
Responsibility
 Customers: treat them fairly and
honesty by charging fair prices, honor
warranties, delivery commitments and
stand behind the quality of the product
they sell.
 Employees: treat workers fairly, make
them a part of the team, respect their
human rights.

5. The Stakeholder Model of
Responsibility (continued)
 Investors: Managers should follow proper
accounting procedures, provide appropriate
information to shareholders about financial
performance, and protecting the
shareholders’ rights.
 Suppliers: The importance of mutually
beneficial partnership arrangements with
suppliers is recognized.
 Local Communities: Being socially
responsible.

6. Areas of Social Responsibility
 Responsibility Toward the Environment: air
pollution, water pollution, land pollution; toxic
waste disposal and recycling.
 Responsibility Toward Customers: consumer
rights (safe products, informing customers
about all aspects of products, right to be
heard, right to choose what they buy), Unfair
pricing (illegal agreements between two or
more companies) and ethics in advertising.

7. Areas of Social Responsibility
(continued)
 Responsibility toward Employees;
recruiting, hiring, training, promoting,
and compensating employees are
important.
 Responsibility toward Investors; treat
financial recourses in an efficient and
effective way.