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Business Ethics and Social Responsibility

This document discusses business ethics and social responsibility. It defines business ethics as principles and standards that define acceptable conduct in business. Social responsibility is defined as a business's obligation to maximize its positive impact and minimize its negative impact on society. The document outlines theories of social responsibility like sustainability theory and stakeholder theory. It discusses ethical issues categories, recognizing ethical issues, and factors that influence business ethics decisions. It also discusses codes of ethics, whistleblowing, and the responsibilities of an ethics officer.

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265 views32 pages

Business Ethics and Social Responsibility

This document discusses business ethics and social responsibility. It defines business ethics as principles and standards that define acceptable conduct in business. Social responsibility is defined as a business's obligation to maximize its positive impact and minimize its negative impact on society. The document outlines theories of social responsibility like sustainability theory and stakeholder theory. It discusses ethical issues categories, recognizing ethical issues, and factors that influence business ethics decisions. It also discusses codes of ethics, whistleblowing, and the responsibilities of an ethics officer.

Uploaded by

S- Ajmeri
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
You are on page 1/ 32

BUSINESS ETHICS AND

SOCIAL RESPONSIBILITY
2-1

Business Ethics and Social


Responsibility
Business Ethics:
The principles and standards that define
acceptable conduct in business

Social Responsibility:
A businesss obligation to maximize its
positive impact and minimize its negative
impact on society

2-2

Recognizing an Ethical Issue


An ethical issue is an identifiable problem,
situation, or opportunity that requires a
person to choose from among several
actions that may be evaluated as right or
wrong, ethical or unethical.

2-3

Reasons For Not Reporting


Observed Misconduct
1. Didnt believe corrective action would be
taken
2. Feared retribution or retaliation from
supervisor or management
3. Feared they wouldnt remain anonymous
4. Thought someone else would report the
misconduct
5. Didnt know who to contact
.
2-4

Misconduct Observed in the


Workplace

2-5

Ethical Issue Categories


Conflict of interest
Fairness and
honesty
Communications
Business
relationships

2-6

Conflict of Interest
Occurs when a person must choose
whether to advance their own
personal interest or those of others

2-7

Fairness and Honesty


The heart of business
ethics
General values of
decision makers

2-8

Communications
False and misleading
advertising and deceptive
personal-selling tactics
anger customers and may
cause a business to fail.

2-9

Business Relationships
Businesspeople must be ethical toward
their customers, suppliers, and others in
their workplace.

2-10

Questions to Consider in Determining


Whether an Action is Ethical
Are there any potential legal restrictions or
violations that could result from the action?
Question: If I do this will it break any laws?

Does your company have a specific code of


ethics or a policy on the action?
Question: If I do this will I go against the
employee handbook?

2-11

Questions to Consider in Determining


Whether an Action is Ethical
Is this activity customary in your industry?
Are there any industry trade groups that
provide guidelines or codes of conduct
that address this issue?
Question: If I do this will I violate any trade
practices?

2-12

Questions to Consider in Determining


Whether an Action is Ethical
Would this activity be accepted by your
coworkers?
Will your decision or action withstand open
discussion with coworkers and managers
and survive untarnished?
Question: Will my action cause peer
acceptance or rejection, or any peer
pressure?
2-13

Questions to Consider in Determining


Whether an Action is Ethical
How does this activity fit with your own
beliefs and values?
Question: Will my action violate any of my
personal ethics, religious beliefs, or social
values?

2-14

Three Factors that Influence


Business Ethics

Individual
Standards
and
Values

Managers
and
Coworkers
Influence

Opportunity:
Codes and
Compliance
Requirements

Ethical/Unethical
Choices
in Business

2-15

Codes of Ethics
Formalized rules and standards that
describe what a company expects of its
employees

Did You Know?


Written ethics standards are more often found in
larger companies than smaller ones.

2-16

Whistleblowing
The act of an employee exposing the
employers wrongdoing to outsiders
The media
Government regulatory agencies

2-17

Theories of Social
Responsibility
Sustainability Theory:
If a company helps society through his
business as a main goal, then they will
reap success.
Forward thinking revolving around creating
new products in the long run will improve
social ills.

2-18

Stakeholders Theory:
Stakeholders influence business and
business influence stakeholders
Identifying stakeholders

Primary stakeholders are those whose


continued association is necessary to for a firm
survival

Secondary stakeholders are those do not


typically engage in transactions with a company
and not essential for the survival
2-19

Stakeholders Theory:
The central focus is giving attention to
every stakeholder in the entire company

Employee
Employer
Suppliers
Customers
Managers
Society
2-20

Employee wants great job security and


excellent wages
Employer wants increased share value
and profits
Suppliers wants their business to be
plentiful
Customers expects excellent customer
service and high quality products
2-21

Manager wants happy workers and profits


Society wants payment of corporate taxes,
offer good wages and no pollution.

2-22

The Nature of Social


Responsibility
Four Dimensions:
Economic earn profits
Legal comply with the law
Ethical
Not just for profit only

Voluntary & Philanthropic


Promote human welfare and goodwill

2-23

The Pyramid of Social


Responsibility
Voluntary
Responsibilities
being a
good corporate citizen;
contributing to the
community and quality of life
Ethical Responsibilities
being ethical; doing what is right, just,
and fair; avoiding harm
Legal Responsibilities
obeying the law (societys codification
of right and wrong)
Economic Responsibilities
being profitable
Source: Adapted from Archie B. Carroll, The Pyramid of Corporate Social Responsibility: Toward the
2-24
Moral Management of Organizational Stakeholders. Business Horizons 34 (July/August 1991): 42.

Social Responsibility Issues


Organizational relationships with owners and
stockholders:
Profit and ROI

Employee relations:
Providing a safe workplace, adequate pay,
information about the company, listening to
grievances, and treating employees fairly

Consumer relations:
Respecting the rights of customers and providing
them with safe and satisfying products
2-25

Social Responsibility Issues


Environmental issues:
Animal rights
Pollution
Global warming

Community relations:
Responsibility to the general welfare of
the community
Did You Know?
In one year, Americans generated 230 million
tons of trash and recycled 23.5 percent of it.
2-26

Best Corporate Citizens


1.
2.
3.
4.
5.
6.
7.
8.
9.
10.

Green Mountain Coffee


Hewlett-Packard
Advanced Micro Devices
Motorola
Agilent Technologies
Timberland
Salesforce.com
Cisco Systems
Dell
Texas Instruments

11.
12.
13.
14.
15.
16.
17.
18.
19.
20.

Intel
Johnson and Johnson
NIKE
General Mills
Pitney Bowes
Wells Fargo
Starbucks
Wainright Bank & Trust
St. Paul Travelers
Ecolab

Source: Philip Johansson, The Best 100 Corporate Citizens, Business Ethics, March/April
2006, p. 22.
2-27

Arguments for Social


Responsibility
1. Business helped to create many of the social
problems that exist today, so it should play a
significant role in solving them
2. Businesses should be more responsible
because they have the financial and technical
resources to help solve social problems
3. As members of society, businesses should do
their fair share to help others

2-28

Arguments for Social


Responsibility
4. Socially responsible decision making by
businesses can prevent increased government
regulation
5. Social responsibility is necessary to ensure
economic survival

Businesses must take steps to help solve the social


and environmental problems that exist today

2-29

Arguments Against Social


Responsibility
1. Managers are sidetracked from the primary
goal of business
Earning profits

2. Participation in social programs gives


businesses greater power, perhaps at the
expense of particular segments of society

2-30

Arguments Against Social


Responsibility
3. Some people question whether business has
the expertise needed to assess and make
decisions about social problems
4. Many people believe that social problems are
the responsibility of government agencies and
officials

2-31

Responsibility of the Ethics


Officer
Provide advice about ethics to employees and
management
Distribute the companys code of ethics
Create and maintain an anonymous, confidential
service to answer questions about ethical issues
Take action on ethics violations
Review and modify the code of ethics as needed

2-32

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