Business Ethics Ethical Decision Making and Cases Seventh

Business Ethics: Ethical Decision Making and Cases, Seventh Edition O. C. Ferrell University of New Mexico John Fraedrich University of Wyoming Linda Ferrell University of New Mexico Copyright © Houghton Mifflin Company For in-class note taking, choose Handouts or Notes Pages from the print options, with three slides per page. 1

Chapter 1 An Overview of Business Ethics Copyright © Houghton Mifflin Company 2

Business Ethics • Comprises principles and standards that guide behavior in the world of business • Right or wrong, acceptable or unacceptable behavior within the organization • Determined by you and key stakeholders Copyright © Houghton Mifflin Company 3

Social Responsibility • Obligation a business assumes toward society • Designed to maximize the positive influence and minimize the negative • Includes economic, legal, ethical, and philanthropic dimensions Copyright © Houghton Mifflin Company 4

Why Study Business Ethics and Social Issues? In a National Business Ethics Survey, employees perceived misconduct in these types of organizations: • For profit 31% • Government 38% • Nonprofit 29% Copyright © Houghton Mifflin Company 5

Business Ethics Development Before 1960 U. S. politics: • A living wage • The New Deal • The Fair Deal Theology’s domain Philosophy’s domain Copyright © Houghton Mifflin Company 6

The 1960 s The Great Society • Consumer’s Bill of Rights • Ralph Nader • Wholesome Meat 1967 • Radiation Control 1968 • Clean Water 1972 • Toxic Substances 1976 Copyright © Houghton Mifflin Company 7

The 1970 s Corporate Social Responsibility • Bribery • Deceptive advertising • Price collusion • Product safety • The environment Copyright © Houghton Mifflin Company 8

The 1980 s • Organized field of study • Business ethics centers • Business ethics courses • Defense industry initiative • Multinationals • Self-regulation (Reagan/Bush) Copyright © Houghton Mifflin Company 9

The 1990 s The U. S. and Clinton • Free trade • Self-regulation • Federal Sentencing Guidelines for Organizations (FSGO) • More multinationals Copyright © Houghton Mifflin Company 10

Federal Sentencing Guidelines for Organizations • • Standards and procedures (code of ethics) High level oversight Care in delegation of authority Effective communication (training) Systems to monitor, audit, and report Consistent enforcement Continuous improvement Copyright © Houghton Mifflin Company 11

The 21 st Century • • • Sarbanes-Oxley Act NAFTA Mercosur WTO Caux Round Table Copyright © Houghton Mifflin Company 12

Common Unethical Acts • Insider trading of stocks and bonds • Bribery • Falsifying documents • Deceptive advertising • Defective products • Employee theft • Questionable activities of online companies Copyright © Houghton Mifflin Company 13

Benefits of Business Ethics • Better ethical climate • Employee commitment and trust • Investor loyalty and trust • Customer satisfaction and trust • Long term profits Copyright © Houghton Mifflin Company 14