Copyright 2013 Pearson Education Inc Publishing as Prentice
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 1 -1 Business Ethics and Social Responsibility www. wileybusinessupdates. com Chapter Two Copyright 2017 John Wiley & Sons, Inc.
Learning Objectives 2 1 2 3 Explain the concern for ethical and societal issues Describe the contemporary ethical environment 4 5 Describe how businesses can act responsibly to satisfy society Explain the ethical responsibilities of businesses to investors and the financial community Discuss how organizations shape ethical conduct Copyright 2017 John Wiley & Sons, Inc.
Concern for Ethical and Societal Issues 3 Business Ethics The standards of conduct and moral values governing work actions and decisions Social Responsibility How a business decision impacts the environment, employees, and customers Enhancement of society’s welfare through philosophies, policies, procedures, and actions Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Copyright 2017 John Wiley & Sons, Inc.
4 Concern for Ethical and Societal Issues (continued) Firms have many responsibilities—to customers, to employees, to investors, and to society as a whole Often no clear-cut choices Business ethics are often shaped by the organization’s ethical climate Codes of conduct Ethical standards Doing the right things should be supported and applauded Copyright 2017 John Wiley & Sons, Inc.
The Contemporary Ethical Environment 5 High-profile investigations and arrests in headlines Corporate Social Responsibility Benefits Consumers Investors The environment The companies themselves The vast majority of businesses are ethical New corporate officers charged with deterring wrongdoing and ensuring ethical standards Access Coca-Cola’s Global Sustainability Report Copyright 2017 John Wiley & Sons, Inc.
Starbucks Standards of Business Conduct 6 Operating in 65 countries with more than 21, 000 stores, Starbucks has earned the number one ranking in the area of social responsibility from Fortune Magazine’s Most Admired Companies Copyright 2017 John Wiley & Sons, Inc.
Coca-Cola Company’s Global Sustainability Goals 7 To economically empower 5 million women entrepreneurs across its value chain by 2020 To meet 2020 water use and efficiency reduction and replenishment goals to offer more than 400 new beverage options, more than 100 of which are reduced, low, or nocalorie. Copyright © 2017 John Wiley & Sons, Inc.
The Contemporary Ethical Environment Sarbanes Oxley Act A 2002 law that added oversight for the nation’s major companies Includes a special oversight board to regulate public accounting firms that audit the financial records of these corporations New rules and regulations for securities trading and accounting practices Companies are required to publish a code of ethics Development of ethical compliance programs Provides safeguards for whistleblowers Copyright © 2017 John Wiley & Sons, Inc.
Current Ethical Environment 9 Current environment includes ethical compliance officers Companies adopt a three-pronged approach to ethics and social responsibility Corporate philanthropy Anticipating and managing risks Identifying opportunities to create value by doing the right thing Copyright 2017 John Wiley & Sons, Inc.
Minimum Compliance 10 Copyright 2017 John Wiley & Sons, Inc.
Individuals Make a Difference 11 Individuals can make the difference in the ethical environment of an organization Unethical behavior can be identified as: Putting one’s own interest ahead of the organization Lying to employees Misrepresenting hours Safety violations Internet abuse Technology has expanded unethical behavior All employees face ethical dilemmas Copyright 2017 John Wiley & Sons, Inc.
Development of Individual Ethics 12 Copyright 2017 John Wiley & Sons, Inc.
Common Business Ethical Challenges 13 Situation in which an action benefitting one person or group can potentially harm another Employee’s disclosure of illegal, immoral, or unethical practices in the organization Telling the truth and adhering to deeply felt ethical principles in business situations Employees are expected to be loyal, and to act in the best interests of the company, but an ethical conflict can arise when the truth about a company is not favorable Copyright © 2017 John Wiley & Sons, Inc.
Loyalty versus Truth Employers and employees value honesty and integrity, but what should happen when employees misuse Internet privileges for personal purposes? © August Columbo/Stockimo/Alamy Stock Photo Copyright © 2017 John Wiley & Sons, Inc.
Structure of an Ethical Environment 15 Copyright 2017 John Wiley & Sons, Inc.
Ethical Awareness 16 Awareness is the foundation of an ethical climate Ethical dilemmas will occur Help employees identify ethical problems Give employees guidance to respond A code of conduct is a way to provide support A formal statement Defines how the organization expects employees to resolve ethical questions Copyright 2017 John Wiley & Sons, Inc.
Ethical Education 17 A code of conduct provides only a framework Business must provide tools to evaluate options Many firms have instituted ethics training programs Some question whether ethics can be taught Training gives employees the chances to apply ethical values to hypothetical situations Copyright © 2017 John Wiley & Sons, Inc.
Ethical Action 18 Firms must allow structures and approaches Structure allow decisions to be turned into ethical actions Set realistic goals An employee hotline with ethics officers can provide advice Copyright © 2017 John Wiley & Sons, Inc.
Starbucks 19 At Starbucks, after identifying an ethical problem, the “Ethical Decision Making Framework” outlines the following to help partners (employees) determine the best approach: Is it consistent with Our Starbucks Mission, the Standards of Business Conduct, and any applicable law or regulation? Would your approach embarrass you or Starbucks? How would your approach look published in the newspaper? Would you be comfortable with the example it sets for future decisions? If the path isn’t clear, ask for guidance. Copyright © 2017 John Wiley & Sons, Inc. Follow through on your decision.
Ethical Leadership 20 Executives must demonstrate ethical behavior in their actions Use clear, explicit language Encourage behavior that generates and fosters values Practice moral absolutism Without a framework of ethics, damage can impact shareholders Stakeholders include customers, investors, employees, and the public Copyright © 2017 John Wiley & Sons, Inc.
Acting Responsibly to Satisfy Society 21 Social Responsibility Equal value in considering profit, consumer satisfaction, and societal well-being Concerns with qualitative dimensions and traditional quantitative measures A firm’s social performance is measured through a social audit, and by: Equal employment opportunities Cultural diversity Environmental concerns Safe and healthy workplace Charitable contributions and community service Copyright 2017 John Wiley & Sons, Inc.
Acting Responsibly to Satisfy Society Businesses are judged by their interactions with the surrounding community, including employees volunteering at charitable events. © Steve Debenport/i. Stockphoto Copyright © 2017 John Wiley & Sons, Inc.
Business’s Social Responsibilities 23 Copyright © 2017 John Wiley & Sons, Inc.
Responsibilities to the General Public 24 Public Health Issues Dangerous Protecting the Environment Using resources efficiently Developing a quality workforce Education products and diversity initiatives Corporate philanthropy Contributions and volunteer efforts Copyright 2017 John Wiley & Sons, Inc.
Public Health Issues To do their part to aid the general public, some businesses collaborate with urban neighborhoods to set up community gardens as a way of showing kids how to eat healthy. © Jani Bryson/i. Stockphoto Copyright © 2017 John Wiley & Sons, Inc.
Responsibilities to Customers 26 The public demands that a company considers the wants and needs of its customers in making decisions Consumers have certain rights, as follows: The right to be safe The right to be informed The right to choose The right to be heard Copyright 2017 John Wiley & Sons, Inc.
Responsibilities to Employees 27 Workplace Safety Quality-of-Life Issues Ensuring Equal Opportunity on the Job Age Discrimination Sexual harassment and sexism Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Copyright 2017 John Wiley & Sons, Inc.
Workplace Safety Workplace safety is an important business responsibility. In potentially dangerous areas, workers are required to wear safety equipment, including hard hats and protective eyewear. Laurentiu Iordache/i. Stockphoto Copyright 2017 John Wiley & Sons, Inc.
Age Discrimination Employers are responsible for avoiding age discrimination in the workplace. As the average of workers rises, employers will benefit from the older generation’s knowledge. Gregg Matthews/The New York Times/Redux Pictures Copyright 2017 John Wiley & Sons, Inc.
Responsibilities to Investors and the Financial Community 25 Obligation to make profits for shareholders Expectation of ethical and moral behavior Protection of investors by the Securities and Exchange Commission and state regulations Copyright 2017 John Wiley & Sons, Inc.
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