4 BUSN Business Ethics & Social Responsibility: Doing Well by Doing Good ©2011 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part ©2011 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part Business Ethics and Social Responsibility: Doing Well by Doing Good • What is ethics? Business ethics? • What are the universal ethical standards? • What is an ethical dilemma? • How does ethics relate to the individual and the organization? • What is social responsibility and its impact on stakeholders? • What is the role of social responsibility in the global arena? • How companies evaluate their efforts to be socially responsible? BUSN ©2011 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part Business Ethics & Social Responsibility: Doing Well by Doing Good Ethics & Social Responsibility: A Close Relationship ETHICS Beliefs about right and wrong BUSN SOCIAL RESPONSIBILITY The obligation of a business to contribute to society ©2011 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part BUSN Business Ethics & Social Responsibility: Doing Well by Doing Good Defining Ethics: Murkier Than You’d Think ©2011 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 4 Business Ethics & Social Responsibility: Doing Well by Doing Good Universal Ethical Standards Developed by Character Counts, a nonpartisan organization of educators, community leaders, and ethicists Source: The Six Pillars of Character, Josephson Institute website, http://josephsoninstitute.org/MED/MED-2sixpillars.html, accessed February 2, 2009 BUSN ©2011 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part Business Ethics & Social Responsibility: Doing Well by Doing Good Business Ethics: Not an Oxymoron Ethical Dilemma Negative Consequences Two unfavorable options most challenging business decisions seem to arise when values are in conflict Ethical Lapse Business Ethics – the application of right and wrong in the workplace Clear misconduct BUSN ©2011 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part Business Ethics & Social Responsibility: Doing Well by Doing Good Ethics: Multiple Touchpoints Individuals must make their own ethical choices BUT The organization can have a significant influence on decisions BUSN ©2011 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part Business Ethics & Social Responsibility: Doing Well by Doing Good Ethics and the Individual: The Power of One Framework for Ethical Decisions: Do you understand the dimensions of the problem? Who would benefit? Who would suffer? Are the alternative solutions legal? Are they fair? Does your decision make you comfortable? Could you defend your decision on the nightly news? BUSN ©2011 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part Business Ethics & Social Responsibility: Doing Well by Doing Good Ethics and the Organization: It Takes a Village • Ethical influence starts at the top • Actions matter more than words • The appearance of shaky ethics can be deeply damaging “CEOs in particular must communicate their personal commitment to high ethical standards and consistently drive the message down to employees through their actions.” BUSN ©2011 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part Business Ethics & Social Responsibility: Doing Well by Doing Good Creating and Maintaining and Ethical Organization • Organizational Culture • Role of Top Management • Code of Ethics BUSN Executive Buy-in Clear expectations Integrated approach Global and local Whistleblower support Reporting and Enforcement ©2011 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 10 Business Ethics & Social Responsibility: Doing Well by Doing Good Capitalism with a Conscience • The gains in wealth, healthcare, education, and technology have not been evenly spread • Half of the world’s population lives on less than $2.00 per day • 94% of the world’s earnings go to 40% of the people • Bill Gates has called for a new approach to economics: creative capitalism • Nobel Peace prize winner Muhammad Yunus recognizes the power of business to solve societal issues BUSN ©2011 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 12 Business Ethics & Social Responsibility: Doing Well by Doing Good Defining Social Responsibility: Making the World a Better Place Social Responsibility is the obligation of a business to contribute to society Nearly 80% of Americans consider corporate citizenship when making investment and purchasing decisions BUSN ©2011 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 13 BUSN Business Ethics & Social Responsibility: Doing Well by Doing Good The Spectrum of Social Responsibility ©2011 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 14 Business Ethics & Social Responsibility: Doing Well by Doing Good Social Responsibility at Work: How would you judge the actions of these firms? Clorox introduced a line of “99% natural cleaning” products called Green Works The Sierra Club endorsed the product line Clorox makes annual contributions to the Sierra Club Tapping the potential of their fans, MTV has drawn millions of young people to the polls for the 2008 presidential election As obesity among kids grows, Kraft Foods pledged to stop advertising unhealthy yet profitable foods After receiving $45 billion in taxpayer bailout funds, Bank of America sponsored a five-day carnival-like event outside the 2009 Super Bowl BUSN ©2011 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 15 Business Ethics & Social Responsibility: Doing Well by Doing Good The Stakeholder Approach: Responsibility to Whom? Stakeholders are any groups that have a stake or a personal interest in the performance and actions of an organization BUSN ©2011 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 16 Business Ethics & Social Responsibility: Doing Well by Doing Good The Stakeholder Approach: Responsibility to Whom? EMPLOYEES Creating Jobs that Work CUSTOMERS Value, Honesty and Communication INVESTORS Fair Stewardship and Full Disclosure COMMUNITY Business and the Greater Good ENVIRONMENT Sustainable Development BUSN ©2011 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 17 Business Ethics & Social Responsibility: Doing Well by Doing Good Responsibility to Employees: Creating Jobs that Work • Meet Legal Standards • Workplace Safety • Minimum Wage/Overtime Requirements Value Employees Provide Work/Life Balance BUSN â2011 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 18 Business Ethics & Social Responsibility: Doing Well by Doing Good Responsibility to Customers: Value, Honesty and Communication CONSUMERISM: • The Right to Be Safe • The Right to Be Informed • The Right to Choose • The Right to be Heard Planned Obsolescence – Deliberately designing products to fail in order to shorten the time between consumer repurchases BUSN ©2011 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 19 Business Ethics & Social Responsibility: Doing Well by Doing Good Apple Angst • Apple introduced the iPhone on June 9, 2007 to rave reviews despite $599 price tag • Apple dropped the price to $200 to increase customers • Customers were livid! • CEO, Steve Jobs apologized and gave customers $100 store credit BUSN ©2011 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 20 Business Ethics & Social Responsibility: Doing Well by Doing Good Responsibility to Investors: Fair Stewardship and Full Disclosure • Legal Requirements Sarbanes-Oxley • Responsible use of Corporate Dollars Honesty • Is Optimism or Pessimism Socially Responsible? BUSN ©2011 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 21 Business Ethics & Social Responsibility: Doing Well by Doing Good Responsibility to Community: Business and the Greater Good Cause-related Marketing – partnerships between businesses and nonprofit organizations, designed to spike sales for the company and raise money for the nonprofit Corporate Philanthropy business donations to nonprofit groups, including both money and time BUSN Corporate Responsibility actions of the business rather than donations of money and time ©2011 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 22 Business Ethics & Social Responsibility: Doing Well by Doing Good Responsibility to the Environment: Sustainable Development Sustainable Development Beyond federal, state and local laws: doing business to meet the needs of this generation without harming the ability of future generations Carbon Footprint Amount of harmful greenhouse gases a firm emits Green Marketing Marketing environmental products and practices for competitive advantage BUSN ©2011 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 23 Business Ethics & Social Responsibility: Doing Well by Doing Good Ethics and Social Responsibility in the Global Arena: A House of Mirrors? Corruption is part of the culture in many countries Bribes or Gifts Labor issues in host countries can be complicated Living Wage Child Labor BUSN ©2011 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 24 Business Ethics & Social Responsibility: Doing Well by Doing Good Monitoring Ethics and Social Responsibility: Who is Minding the Store? SOCIAL AUDIT A systematic evaluation of how well a firm is meeting its ethics and social responsibility objectives BUSN ©2011 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 25 Looking Back • What is ethics? Business ethics? • What are the universal ethical standards? • What is an ethical dilemma? • How does ethics relate to the individual and the organization? • What is social responsibility and its impact on stakeholders? • What is the role of social responsibility in the global arena? • How companies evaluate their efforts to be socially responsible? BUSN 26 ©2011 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part ... purchasing decisions BUSN ©2011 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 13 BUSN Business Ethics... Good Ethics & Social Responsibility: A Close Relationship ETHICS Beliefs about right and wrong BUSN SOCIAL RESPONSIBILITY The obligation of a business to contribute to society ©2011 Cengage Learning... scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part BUSN Business Ethics & Social Responsibility: Doing Well by Doing Good Defining Ethics: Murkier