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Understanding business 10th chapter 4b demanding ethical and socially responsible behavior

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Demanding Ethical and Socially Responsible Behavior McGraw-Hill/Irwin Copyright © 2010 by the McGraw-Hill Companies, Inc All rights reserved Ethics & Social Responsibility 4-2 4-3 4-3 WHAT are ETHICS? • Ethics ­­ The standards of moral behavior.  Behaviors that are accepted by society as right  versus wrong 4-4 Ethics Doing What Is Right… As You Know It To Be Right 4-5 BASIC MORAL VALUES Right: • Integrity  • Respect for human life  • Self control  Wrong: •Cheating •Cowardice •Cruelty • Honesty  • Courage • Self­sacrifice 4-6 Ethics Ethics Begins With Each of Us Stem From Individual More Than Legality 4-7 4-7 Ethical Dilemma A situation requiring a choice between equally undesirable alternatives 4-9 Ethics Begins  with Each of Us FACING ETHICAL DILEMMAS LG2 • Ask yourself these  questions: - Is it legal? - Is it balanced? - How will it make  me feel about  myself? 4-10 Ethics Begins  with Each of Us ETHICS and YOU • Plagiarizing from Internet  materials is the most  common form of  cheating in schools  today • Studies found a strong relationship between academic dishonesty and dishonesty at work 4-11 PRESIDENT KENNEDY’S BASIC  RIGHTS of CONSUMERS • The Right to Safety • The Right to be Informed • The Right to Choose • The Right to be Heard 4-28 Responsibilities to Customers   The Right to Be Safe Safe operation of products, avoiding product liability The Right to Be Informed Avoiding false or misleading advertising and providing effective customer service  The Right to Choose Ability of consumers to choose the products and services they want  The Right to Be Heard Ability of consumers to express legitimate complaints to the appropriate parties  Consumer Product Safety Commission  www.cpsc.gov RESPONSIBILITY TO INVESTORS 4-32 RESPONSIBILITY TO INVESTORS • Insider Trading ­­ Insiders using  private company information to  further their own fortunes or those  of their family and friends • Unethical behavior does  financial damage to a company  and investors are cheated 4-33 RESPONSIBILITY to  EMPLOYEES 4-34 RESPONSIBILITY to EMPLOYEES • Create jobs and provide a chance for upward  mobility • Treat employees with respect • Offer salaries and benefits that help employees  reach their personal goals 4-35 AMERICA’S MOST ADMIRED  COMPANIES 10 Apple Google Berkshire Hathaway Southwest Airlines Procter & Gamble Coca­Cola Amazon FedEx Microsoft McDonald’s Source: Fortune, www.fortune.com, March 21, 2011 4-36 RESPONSIBILITY to the  ENVIRONMENT 4-38 RESPONSIBILITY to the  ENVIRONMENT • Environmental efforts may increase costs but  can offer good opportunities.  • The emerging renewable­energy and energy­ efficiency industries account for 8.5 million U.S.  jobs • By 2030, as many as 40  million “Green” jobs will  be created 4-40 SOCIAL AUDITING • Social Audit ­­ A systematic evaluation of an  organization’s progress toward implementing  socially responsible and responsive programs • Five Types of Social Audit Watchdogs 1) 2) 3) 4) 5) Socially conscious investors Socially conscious research organizations Environmentalists Union officials Customers 4-43 INTERNATIONAL ETHICS • Many businesses want socially responsible  behavior from their international suppliers • In the 1970s, the Foreign Corrupt Practices Act  criminalized the act of paying foreign  businesses or government leaders in order to  get business • Partners in the Organization of American  States signed the Inter­American Convention  Against Corruption 4-44 Social Responsibility Bottom Line: Should Companies Have? 4-45 The Majority View Companies are citizens in the communities in which they reside, therefore, They have a Social Responsibility! 4-46 An Economist’s View Milton Friedman – Argues that firms need to focus on making a profit, not on social responsibility, and – Claims that firms that focus on social responsibility get distracted from their real purpose 4-47 Social Responsibility To Sum It Up: Doing Good vs Doing Well 4-48 ... organization’s guiding values, create an environment  that supports ethically sound? ?behavior? ?and? ?stress a  shared accountability among employees 4-15 HOW to IMPROVE AMERICA’S  BUSINESS? ?ETHICS Top management must adopt? ?and? ? unconditionally support an explicit corporate ... Employees must understand that senior  management expects all employees to act  ethically Managers? ?and? ?others must be trained to consider  the? ?ethical? ?implications of all? ?business? ?decisions (continued)... suppliers, subcontractors, distributors and customers The ethics code must be enforced 4-17 * Setting  Corporate  HOW to PREVENT UNETHICAL  BEHAVIORS Ethical? ? Standards LG4 * Managers must communicate the organization’s 

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