Chapter Three

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Chapter Three

• Demonstrating Ethical Behavior
• Social Responsibility

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The more I help others to succeed, the more I
succeed. Ray Kroc, Founder, McDonalds
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Key Topics

• Individual codes of ethics and the importance of
  ethics in the workplace
• Key terms
• Social responsibility in U.S. business
• Environmental issues and stakeholder
  relationships
• Approaches and implementation
• Implications for small business

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What Is Ethical Behavior?

• Ethics Codes of behavior based on definitions
  of right and wrong influenced by values and
  beliefs
• Ethical Behavior Conforming to generally
  accepted ethical principles

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Values Are Based Upon Beliefs

• Value something (as a principle or quality)
  intrinsically desirable
• Belief a state in which trust or confidence is
  placed
• Opinion or conviction of the truth of some
  statement or the reality of some being or
  phenomenon especially when based on examination
  of evidence

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Ethical Principles

• Beneficence - do good for you
• Non malfeasance - do not do harm

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Distributive Justice

• -Give what is deserved
• Allocation, what will be devoted
• Rationing, who gets what resource

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Autonomy

• I have the right to act and decide for myself

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What Is Ethical Behavior?

• Two general types of ethical Problems
• Ethical Dilemma
• Situation in which both sides of an issue have
  valid support
• Ethical lapse
• Situation in which an individual makes a decision
  that is morally wrong, illegal, or unethical

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Ethics Check Questions

• Is It Legal?
• Is It Balanced?
• How Will It Make Me Feel About Myself?

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Ethical Considerations

• Regarding a particular act
• Utility Does it optimize what is best for those
  who are affected by it?
• Rights Does it respect the rights of the
  individuals involved?
• Justice Is it consistent with what we regard as
  fair?
• Caring Is it consistent with peoples
  responsibilities to each other?

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Can I Be a Capitalist and Behave ethically?

• How?

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Company Practices and Business Ethics
Best Approach Open, Honest, Responsive!
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Factors That Cause WorkersTo Act Unethically

• Pressure to meet sales, budget or profit goals
• Lack of recognition
• Personal worries
• Balancing work family
• Poor communication

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Top Five Unethical/illegalBehaviors of Workers

• Cut corners in quality control
• Covered up incidents
• Abused or lied about sick days
• Lied to or deceived customers
• Put inappropriate pressure on others

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Formalizing the Commitment to Ethics
Adopting Written Codes
Instituting Ethics Programs
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Principles, Ethics, and Corporate Policy
Core Principles Organizational Values
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Social Responsibility

• Balancing Commitments to Stakeholders

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Stakeholders Groups, individuals, and
organizations that are directly affected by the
practices of an organization
CORPORATION
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The Evolution of Social Responsibility

• Contemporary Social Consciousness
• Era of Social Activism
• The Great Depression
• Entrepreneurial Era
• Public companies BELONG to the PUBLIC

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Responsibility Toward the Environment

• Air pollution
• Water pollution
• Land pollution
• Toxic waste
• Recycling

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Company Responsibility Toward Customers

• Ethics in Advertising
• Unfair Pricing
• Consumer Rights

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Responsibility Toward Employees

• Legal Social Commitments
• Whistle-blowers

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How Much Privacy Does Your Employer Owe You?

• Email
• Office correspondence
• Internet
• Cellular Phones

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Responsibility Toward Investors

• Improper financial management
• Check kiting
• Insider trading
• Misrepresentation of finances

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Approaches to Social Responsibility
Highest
Lowest
Obstructionist Stance
Proactive Stance
Defensive Stance
Accommodative Stance
Actively Seeks Opportunities to Contribute
Actively Avoids Responsibility
Does Legal Minimum
Responds to Requests
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Managing Social Responsibility Programs
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Ethics, Social Responsibility, and the Small
Business

• Do small businesses face different issues with
  regard to ethics and social responsibility?

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Chapter Review

• Discuss how individuals develop their personal
  codes of ethics.
• Explain why ethics matter in the workplace.
• Distinguish social responsibility from ethics.
• Show how social responsibility applies to
  environmental issues and to relationships with
  customers, employees, and investors.
• Identify four approaches to social
  responsibility.
• Describe the four steps a firm must take to
  implement a social responsibility program.
• Explain how social responsibly and ethics affect
  small business.