Lecture Topics
Ethics
Corporate Social Responsibility
Ethics
Ethics
Ethics is an area of study that deals with ideas about what is good and bad behavior
A branch of philosophy dealing with what is morally right or wrong
Ethics is about our actions and decisions
Right vs. Wrong
Ethics
ETHICS – The moral principles, values and beliefs that govern group or individual behavior according to what is right or wrong and what contributes to the balanced good of all stakeholders.
ETHICAL DILEMMA – A situation in which no choice is entirely right
Public vs. Private Ethic
Public Ethic—what do you claim or express publicly to others about your underlying values, intentions and motivations in a particular situation.
Private Ethic—what are your true values, intentions and motivations in the situation.
Public and Private ethics may be the same (transparent) or they may be different (deceptive)
Unethical Act
UNETHICAL ACT
has immoral intent. It is done with the full knowledge that it is fundamentally wrong legally and morally.
Ethical Mistake
Ethical Mistake is a decision or action that is unintentionally unethical.
Why we make ethical mistakes -
a lack of experience in making value-based decisions
lack of comprehension regarding the consequences of their actions on society, on our organization, on our colleagues…
and an inability to articulate and act on our own values and ethics in a leadership role
Making Ethical Decisions
Impartial analysis
• Visibility – the “newspaper test”
• Generality – would all organizational members be comfortable with action taken
• Legacy – would decision maker be comfortable being remembered for action taken
Codes of conduct – organization’s published guidelines of its expectations about ethical behavior
What Ethical Issues did Lance Armstrong face?
Discuss Lance Armstrong’s public and private ethics
Did Lance Armstrong make an ethical mistake, or did he act unethical?
Wells Fargo
Wells Fargo
Cross-selling means getting customers who use one service, such as checking, to use other services, such as savings or credit cards. There is nothing wrong with cross-selling - all banks do it.
In order to encourage employees to support the program, Wells Fargo provided incentives to employees who succeeded at cross-selling.
Employees manufactured fake accounts in the names of existing Well Fargo customers.
The problem was huge. In attempting to correct the problem the company fired 5,300 employees and lost its highly respected CEO, John Stumpf.
Wrong at a massive scale.
In the face of pressure at work do people become less concerned with ethics?
Enron Code of Ethics
(64 Pages)
CSUN Student
Core Values Statement & Ethical Conduct Pledge
College Of Business and Economics
California State University, Northridge
The College of Business and Economics at California State University, Northridge prepares students to be ethical decision makers. ...
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1. Lecture Topics
Ethics
Corporate Social Responsibility
Ethics
Ethics
Ethics is an area of study that deals with ideas about what is
good and bad behavior
A branch of philosophy dealing with what is morally right or
wrong
Ethics is about our actions and decisions
Right vs. Wrong
Ethics
ETHICS – The moral principles, values and beliefs that govern
group or individual behavior according to what is right or
wrong and what contributes to the balanced good of all
stakeholders.
ETHICAL DILEMMA – A situation in which no choice is
entirely right
2. Public vs. Private Ethic
Public Ethic—what do you claim or express publicly to others
about your underlying values, intentions and motivations in a
particular situation.
Private Ethic—what are your true values, intentions and
motivations in the situation.
Public and Private ethics may be the same (transparent) or they
may be different (deceptive)
Unethical Act
UNETHICAL ACT
has immoral intent. It is done with the full knowledge that it is
fundamentally wrong legally and morally.
Ethical Mistake
Ethical Mistake is a decision or action that is unintentionally
unethical.
Why we make ethical mistakes -
a lack of experience in making value-based decisions
lack of comprehension regarding the consequences of their
actions on society, on our organization, on our colleagues…
3. and an inability to articulate and act on our own values and
ethics in a leadership role
Making Ethical Decisions
Impartial analysis
• Visibility – the “newspaper test”
• Generality – would all organizational
members be comfortable with action taken
• Legacy – would decision maker be
comfortable being remembered for action taken
Codes of conduct – organization’s published guidelines of its
expectations about ethical behavior
What Ethical Issues did Lance Armstrong face?
Discuss Lance Armstrong’s public and private ethics
Did Lance Armstrong make an ethical mistake, or did he act
unethical?
4. Wells Fargo
Wells Fargo
Cross-selling means getting customers who use one service,
such as checking, to use other services, such as savings or
credit cards. There is nothing wrong with cross-selling - all
banks do it.
In order to encourage employees to support the program, Wells
Fargo provided incentives to employees who succeeded at cross-
selling.
Employees manufactured fake accounts in the names of existing
Well Fargo customers.
The problem was huge. In attempting to correct the problem the
company fired 5,300 employees and lost its highly respected
CEO, John Stumpf.
Wrong at a massive scale.
In the face of pressure at work do people become less concerned
with ethics?
Enron Code of Ethics
5. (64 Pages)
CSUN Student
Core Values Statement & Ethical Conduct Pledge
College Of Business and Economics
California State University, Northridge
The College of Business and Economics at California State
University, Northridge prepares students to be ethical decision
makers. The college maintains high standards of ethical
conduct that students are expected to maintain throughout their
academic and professional careers.
Students in the College of Business and Economics have
identified the values of respect, honesty, integrity, commitment,
and responsibility as their guiding principles. The following
statement describes these core values.
Student Core Values:
Respect
Treat our classmates, professors, staff, and administrators with
respect. We respect diversity and do not discriminate on the
basis of race, color, ethnicity, religion, gender, disability,
sexual orientation, age, or other characteristics. We respect
different points of view that add to our knowledge. We respect
our learning opportunities by behaving professionally in the
classroom, and making academic achievement an important
6. priority.
Honesty
Communicate truthfully with our classmates, professors, staff,
and administrators in all academic matters while remaining
respectful. We observe university policies on academic
dishonesty in completing all academic work. In seeking
employment, internships, and other opportunities we represent
ourselves truthfully, understanding that misrepresentation may
not only harm our own reputation but that of our classmates and
the college.
Integrity
Maintain integrity. Because we zealously integrate these core
values into our academic work and preparation for our
profession, our integrity enables us to reach our goals,
overcome obstacles, and successfully resolve ethical dilemmas.
Commitment
Strive for success as students, professionals, and citizens. We
keep our promises, and adhere to our core values in all our
activities both as students and alumni. We are committed to
acting honestly, respectfully, and responsibly in our effort to
achieve our goals. We understand that commitment to our core
values benefits both students and the community now and in the
future.
Responsibility
Embrace the responsibility we have to ourselves and to each
other to maintain high ethical standards. With each task at hand
comes the responsibility to uphold the core values that unite us.
We support each other in our adherence to these standards. We
recognize that reporting unethical conduct is a responsibility we
all share.
7. My Pledge:
I pledge to join my classmates in upholding these core values.
(Print Name)
(Signature) (Date)
Corporate Social Responsibility
Relationship Between Ethics and Corporate Social
Responsibility
The main meaning of social responsibility is that it’s more of an
obligation or a duty towards the people that the business
affects.
Ethics is about right and wrong behavior.
What is good for the society is sometimes not good for the
business, and what is good for the business is sometimes not
good for the society.
8. Corporate Social Responsibility (CSR)
Business practices that involve accessing and taking
responsibility for the company’s effects on the environment and
social issues
Generally applies to corporate efforts that go beyond what
might be required by regulations
Proactive approach
Programs that coordinate the company’s efforts to address
societal and community challenges as they emerge
The Triple Bottom Line
Economic
Revenue
10. How Do Managers Make a Difference?
Managers’ bottom line defined by the “3 P’s”
People – invest in the well-being of employees and provide
interesting and rewarding jobs that offer the opportunity to be
productive
Profit – ensure that the company is financially healthy
Planet – protect and support the environment, causes, and
communities
Social Responsibility
Approaches to Social Responsibility
Proactive approach – organization goes beyond industry norms
to solve and prevent problems
Accommodative approach – organization accepts responsibility
and takes action in response to societal pressures
Defensive approach – organization accepts responsibility, but
does only the minimum required
Reactive approach – organization denies responsibility for
social problems and responds only when legally required
11. Social Responsibility
Social entrepreneurs – people who start a business for the dual
purpose of
profits and societal benefits
Consumers and investors are becoming more active in
supporting and
investing in socially responsible companies
Calvert Social Investment Fund screens
companies on financial performance and:
• Environment
• Human Rights
• Community Relations
• Governance Business Ethics
• Workplace
• Indigenous peoples’ rights
• Product safety and impact
“There is one and only one social responsibility of business —
to use its resources and engage in activities designed to increase
its profits.”
Milton Friedman
American Economist
1962
12. Criticism of CSR
Detracts from the fundamental economic role of business
Just superficial window-dressing
Pre-empts the role of governments as the watchdog over
powerful multinational corporations
How CSR Programs Benefit Employers
What do employees want the companies they work for to
provide for them?
Traditional benefits like health insurance (94 percent)
A competitive financial package (92 percent)
Support the issues and causes that matter to them (64 percent
And most (78 percent) say they want to be able to actively
participate in helping improve their companies CSR practices
Study by Cone Communications
Corporate Social Responsibility
Patagonia
13. Tom’s Shoes
Apple Computer
Nestle
Patagonia
Environmental & Social Responsibility
PATAGONIA'S MISSION STATEMENT
Our values reflect those of a business started by a band of
climbers and surfers, and the minimalist style they promoted.
The approach we take towards product design demonstrates a
bias for simplicity and utility. Our mission is to build the best
product, cause no unnecessary harm, use business to inspire and
implement solutions to the environmental crisis
14. Record-breaking Black Friday Sales to Benefit the Planet
“100 percent of our global retail and online Black Friday sales
directly to grassroots nonprofits working on the frontlines to
protect our air, water and soil for future generations, we heard
from many of our customers calling it a “fundraiser for the
earth.”
We’re humbled to report the response was beyond expectations:
With your help, Patagonia reached a record-breaking $10
million in sales. We expected to reach $2 million in sales—we
beat that expectation five times over. The enormous love our
customers showed to the planet on Black Friday enables us to
give every penny to hundreds of grassroots environmental
organizations working around the world.
Toms Shoes
15. Toms Shoes
Apple Computer
Apple Computer
“How can a company that is this extraordinary in other respects
be missing in action on corporate social responsibility?”
Forbes Magazine
Economic
Social
Environmental
More than 90 percent of Apple’s products – including the
iPhone, iPad and Mac computer are assembled in China
Labor practices and working and living conditions at factory-
owned dorms came under scrutiny after more than a dozen
workers committed suicide starting in 2010
Average worker salary $1.78 per hour
17. Price $649 for 32GB
Material costs $219.80
Labor costs between $5.00 per phone
Total build $224.80
Tim Cook states these costs are not accurate. There are other
expenses not captured in these numbers.
Apple X iPhone
2017 report
3,000 student interns were “forced” to work at Foxconn in order
to graduate from their high school
Factory hires students every year during the busy season
between August and December. Such hiring increases the
number of employees from 100,000 to more than 300,000
workers
Produce up to 20,000 iPhones a day
One person can assemble 1,200 iPhone cameras per day
Financial Times, Yuan Yang in Zhengzhou, NOVEMBER 21,
2017
18. China Labor Watch
Apple Computer
Earlier this year, the Justice Department filed a lawsuit against
Apple, seeking the company's help in unlocking the iPhone 5c
used by San Bernardino attacker Syed Farook. Apple declined
the request even after a judge said it would need to create
software to let the FBI unlock the smartphone. In an open letter,
Apple CEO Tim Cook argued that user privacy was at risk and
opening one iPhone could open the floodgates to the FBI
accessing other users' smartphones. He added that he was
willing to take the fight to the U.S. Supreme Court.
Fortune Don Reisinger
WATER
Water
Comprise 71% of earth
60% of the adult body
Water business grosses $600 billion annually
Is clean water a human right?
19. What are the 3 Things Most of the World Cannot Do?
Nestle Water
20. Nestle
Owns 70 of the bottled water companies
At one site in Michigan they pump 450 gallons per minute
Nestle does not pay for this water
Estimated profits from this pumping site is $1.8 million per day
Nestle
Tim Brown, Nestle North America CEO
In response to CA drought
"If I stop bottling water tomorrow, people would buy a different
brand of bottled water. We see this everyday," Brown told
KPCC. "In fact, if I could increase [bottling], I would.”
Brown claims the company has complied with all regulatory
agencies
Bottling water still takes 30% to 50% more water than turning
on the tap
Is this really an environmentally, ethically correct thing to be
doing right now?
CEO Activism