Chapter 4a demanding ethical and socially responsible behavior

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