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 Ethics 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… 4-5 Ethics As You Know It To Be Right BASIC MORAL VALUES Right: • Integrity • Respect for human life • Self control Wrong: •Cheating •Cowardice •Cruelty • Honesty • Courage • Selfsacrifice 4-7 Ethics Ethics Begins With Each of Us Stem From Individual More Than Legality 4-8 Ethical Dilemma a situation requiring a choice between equally undesirable alternatives 4-11 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? 4-12 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 4-32 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 4-36 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 4-37 RESPONSIBILITY to EMPLOYEES 4-38 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 4-39 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 4-40 RESPONSIBILITY to the ENVIRONMENT 4-42 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 4-44 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 4-47 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 4-48 Social Responsibility Bottom Line: Should Companies Have? 4-49 The Majority View Companies are citizens in the communities in which they reside, therefore, They have a Social Responsibility 4-50 An Economist’s View Milton Friedman – Argues that firms need to focus on making a profit, not on social responsibility – Claims that firms that focus on social responsibility get distracted from their real purpose 4-51 Social Responsibility To Sum It Up: Doing Good vs Doing Well 4-52 ... of their family? ?and? ?friends • Unethical? ?behavior? ?does financial damage to a company and? ?investors are cheated 4-37 RESPONSIBILITY to EMPLOYEES 4-38 RESPONSIBILITY to EMPLOYEES • Create jobs? ?and? ?provide a chance for upward ... 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... preventing unlawful? ?behavior? ?by increasing control and? ?by penalizing wrongdoers • IntegrityBased Ethics Code Define the organization’s guiding values, create an environment that supports ethically sound? ?behavior? ?and? ?stress a