Chapter 4 Business Ethics and Social Responsibility pp

Chapter 4 Business Ethics and Social Responsibility pp. 52 -65

Chapter 4 Learning Objectives After completing this chapter, you’ll be able to: 1. Define ethics and business ethics. 2. Give reasons why ethical behavior is good for business. 3. List the steps for dealing with an ethical dilemma Introduction to Business, Business Ethics and Social Responsibility

Chapter 4 WHAT IS ETHICS? • Ethics is the set of moral principles by which people conduct themselves in society - personally, socially, or professionally. Example: stealing, cheating, lying reflects one’s integrity Introduction to Business, Business Ethics and Social Responsibility

Chapter 4 WHAT IS ETHICS? • Business ethics is a set of laws about how a business should conduct itself. • To be successful - any business must operate legally and humanely. Introduction to Business, Business Ethics and Social Responsibility

Chapter 4 LEGAL RESPONSIBILITY • Sweatshops are factories that pay workers poorly, are unhealthy, and treat workers badly. • Sweatshops led to the creation of… Introduction to Business, Business Ethics and Social Responsibility

Chapter 4 LEGAL RESPONSIBILITY …The Occupational Safety and Health Administration (OSHA) • OSHA is a division of the Department of Labor that sets and enforces work-related health and safety rules. Introduction to Business, Business Ethics and Social Responsibility

Chapter 4 LEGAL RESPONSIBILITY • Other independent agencies protect consumers, monitor broadcast communications, and address discrimination in the workplace Introduction to Business, Business Ethics and Social Responsibility

Chapter 4 LEGAL RESPONSIBILITY • Most businesses police themselves by distributing codes of ethics. • A code of ethics is a set of strict guidelines for maintaining ethics in the workplace. Introduction to Business, Business Ethics and Social Responsibility

Chapter 4 ETHICS AS GOOD BUSINESS • Unethical business practices can affect your business indirectly – come back and haunt you • Violating gov regulations or code of ethics can lead to being fired, losing licenses, jail time Introduction to Business, Business Ethics and Social Responsibility

Chapter 4 ETHICS AS GOOD BUSINESS • Amount made in profits from one unhappy customer can = a lot more lost in business because of missed repeat business or bad word-of-mouth Example: Worst place to eat in town? Why? Introduction to Business, Business Ethics and Social Responsibility

Chapter 4 ETHICAL DECISION MAKING • Business works best when there is mutual trust between the buyer and the seller. BUYER Mutual Trust SELLER Introduction to Business, Business Ethics and Social Responsibility

Chapter 4 ETHICS AS GOOD BUSINESS • Treating employees unethically can also backfire • Mistreating employees leads to a high turnover rate. This increases the cost of hiring and training new employees. Introduction to Business, Business Ethics and Social Responsibility

Chapter 4 ETHICAL DECISION MAKING Ethical Decision Making = more business activity and more efficient productions of goods and services! Introduction to Business, Business Ethics and Social Responsibility

Chapter 4 MAKING ETHICAL DECISIONS Steps if you find yourself in an ethical dilemma or situations: 1. Identify the ethical dilemma 2. Discover alternative actions 3. Decide who might be affected 4. List the probable effects of the alternatives 5. Select the best alternative Introduction to Business, Business Ethics and Social Responsibility

4 Graphic Organizer IMPORTANT ETHICAL QUESTIONS Chapter Does it violate the law or policies? YES UNETHICAL NO What if everyone did this, but it’s bad? YES UNETHICAL NO Would this sacrifice long-term benefits for short-term gain? YES NO ETHICAL DECISION Introduction to Business, Business Ethics and Social Responsibility MAY BE UNETHICAL

Chapter 4 • HOMEWORK – Rd. Pgs. 59 -63 – Questions 1 -3 on Pg. 63 Introduction to Business, Business Ethics and Social Responsibility

Chapter 4 IMPORTANT ETHICAL QUESITIONS Example: Downloading music on KAZAA or My. Napster? How is this “fair” to the artists? How do they make money and keep making albums? Introduction to Business, Business Ethics and Social Responsibility

Chapter 4 Learning Objectives After completing this chapter, you’ll be able to: 1. Define social responsibility. 2. Describe the social responsibilities businesses have to society. Introduction to Business, Business Ethics and Social Responsibility

Chapter 4 SOCIAL RESPONSIBILITY Social responsibility is the duty to do what is best for the good of society. • Provide safe products • Create jobs • Protect the environment (recycling) • Contribute to the standard of living in society Introduction to Business, Business Ethics and Social Responsibility

Chapter 4 SOCIAL RESPONSIBILITY A conflict of interest is when a business is tempted to put profits before social welfare Example: Dumping waste in the middle of nowhere to save on disposal costs, putting oil or other waste in a river so it will just “wash away” Introduction to Business, Business Ethics and Social Responsibility

Chapter 4 RESPONSIBILITY TO CUSTOMERS • Business’s first responsibility is to the customers. • The Food and Drug Administration (FDA), a government agency, protects consumers from dangerous or falsely advertised products. Introduction to Business, Business Ethics and Social Responsibility

Chapter 4 OVER-THE-COUNTER MEDICINE LABEL The FDA governs advertising and labeling of OTC medicines. Why does the FDA feel that regulation of advertising and packaging labels is necessary? Introduction to Business, Business Ethics and Social Responsibility

Chapter 4 CASE STUDY • • 1982 Johnson & Johnson poisoned Tylenol bottles popping up recalled all bottles, cost - $100 million made “tamper proof bottles” Today = best selling pain medicine Introduction to Business, Business Ethics and Social Responsibility

Chapter 4 RESPONSIBILITY TO CUSTOMERS • Fair competition = healthy for the marketplace • Some companies use unethical means to eliminate competition Example conspire with other companies to control the market for a product Introduction to Business, Business Ethics and Social Responsibility

Chapter 4 RESPONSIBILITY TO EMPLOYEES • Businesses have a social responsibility to create jobs • They are expected to provide employees with safe working conditions, equal treatment, and fair pay Introduction to Business, Business Ethics and Social Responsibility

Chapter 4 RESPONSIBILITY TO EMPLOYEES • Equal Pay Act (passed in 1964) requires that men and women be paid the same wages for doing equal work • Americans with Disabilities Act bans discrimination against persons with physical/mental disability Introduction to Business, Business Ethics and Social Responsibility

Chapter 4 RESPONSIBILITY TO EMPLOYEES • It’s in a company’s best interest to treat its workers fairly otherwise… • low morale • poor productivity • high turnover rate …will result Introduction to Business, Business Ethics and Social Responsibility

Chapter 4 RESPONSIBILITY TO SOCIETY • Businesses also have responsibilities to society as a whole • Many businesses plan for their social responsibilities just like planning for production or sale of their products Introduction to Business, Business Ethics and Social Responsibility

Chapter 4 RESPONSIBILITY TO SOCIETY • Environmental Protection Agency (EPA, created 1970 by U. S. Gov) is a federal agency that enforces rules that protect the environment and control pollution Introduction to Business, Business Ethics and Social Responsibility

Chapter 4 RESPONSIBILITY TO SOCIETY • Environmentally friendly things to do: • Use biodegradable materials • recycle, use recycled products • soy based ink • Eco-cars • Better PUBLIC RELATIONS by being environmentally aware Introduction to Business, Business Ethics and Social Responsibility

Chapter 4 RESPONSIBILITY TO CREDITORS & OWNERS • Many companies have kept inaccurate accounting records • This effects both creditors and stockholders • Sarbanes-Oxley Act holds CEO accountable Introduction to Business, Business Ethics and Social Responsibility

Chapter 4 • HOMEWORK • Key Points Review – Questions 2 -5. Introduction to Business, Business Ethics and Social Responsibility

Chapter 4 Things you do personally to be Environmentally Friendly How often do you help the environment? What do you do? Source: The NPD Group Introduction to Business, Business Ethics and Social Responsibility

Chapter 4 QUESTIONS? • QUIZ NEXT CLASS – 20 pts (18 ? ’s) • T/F, Multiple Choice, Matching • 1 Short Answer Question • NOT Scantron, can use pen Introduction to Business, Business Ethics and Social Responsibility

End of Chapter 4 Business Ethics and Social Responsibility