Chapter 3 Practising Ethical Behaviour and Social Responsibility

Chapter 3 Practising Ethical Behaviour and Social Responsibility Copyright © 2009 Pearson Education Canada 1

Two Important Concepts Social responsibility Copyright © 2009 Pearson Education Canada Ethical behaviour 2

What Is Ethical Behaviour? Competing fairly and honestly Communicating truthfully Not causing harm to others Copyright © 2009 Pearson Education Canada 3

Factors Influencing Ethical Behaviour Cultural differences Knowledge Organizational behaviour Copyright © 2009 Pearson Education Canada 4

Business Ethics Top-management commitment Code of ethics Ethics Officer Reporting system Copyright © 2009 Pearson Education Canada 5

Making Ethical Decisions Stakeholder Issues Is It Ethical? Philosophical Approaches Outsiders Legality and balance Utilitarianism Supervisors Acceptability Individual, legal and human rights Employees Feasibility Principles of justice Copyright © 2009 Pearson Education Canada 6

Types of Ethical Situations Ethical dilemma Ethical lapse Copyright © 2009 Pearson Education Canada 7

Social Responsibility in Business Early 20 th Century Maximize profits Middle 20 th Century Provide jobs and pay taxes Copyright © 2009 Pearson Education Canada Early 21 st Century Balance profits and social issues 8

Percentage of Executives Who “Strongly Agree” Percentage or “Agree” That Companies Should: • Be environmentally responsible 100 • Be ethical in operations 100 • Earn profits 96 • Employ local residents 94 • Pay taxes 94 • Encourage and support employee volunteering 89 • Contribute money and leadership to charities 85 • Be involved in economic development 75 • Be involved in public education 73 • Involve community representatives in business decisions 62 • Target a portion of purchasing toward local vendors 61 • Help improve quality of life for low-income populations 54 Copyright © 2009 Pearson Education Canada 9

Balancing Business and Stakeholders’ Rights Business Investors Consumers Employees Society Profits Fair Disclosure Informed Purchase Equity Health & Safety Clean Environment Safe Products Copyright © 2009 Pearson Education Canada Product Choice 10

Efforts to Increase Social Responsibility Social Audit Cause-related Philanthropy Marketing Copyright © 2009 Pearson Education Canada 11

Causes of Pollution Industrial discharges Vehicle emissions Chemical spills Copyright © 2009 Pearson Education Canada 12

Government Efforts to Reduce Pollution Regulate air and water Reduce automobile emissions License pesticides Control toxic substances Canadian Environmental Protection Act (CEPA) Copyright © 2009 Pearson Education Canada Safeguard drinking water 13

The Kyoto Protocol • The goal of the Kyoto Protocol is to reduce greenhouse gas emissions • Canada’s commitment: – Reduce Canadian GHG’s to 6% below 1990 levels by 2012 – In 2007, Canada was above 1990 levels by 27 percent Copyright © 2009 Pearson Education Canada 14

Business Efforts to Reduce Pollution Environmental issues Long-term cost Environmental staff Product development Performance expectations Supplier expectations Performance rewards Training and awareness Copyright © 2009 Pearson Education Canada 15

Responsibility Toward Consumers The Right to Safe Products The Right to Be Informed The Right to Choose The Right to Be Heard Copyright © 2009 Pearson Education Canada 16

Responsibility Toward Investors Social responsibility Copyright © 2009 Pearson Education Canada Business ethics 17

Responsibility Toward Employees Equal employment Equity opportunity Act Diversity initiatives Copyright © 2009 Pearson Education Canada Occupational health and safety 18

Global Ethics and Social Responsibility Bribery Environmental abuse Unscrupulous business practices Copyright © 2009 Pearson Education Canada 19