Ethics and Corporate Social Responsibility Chapter 2 2

Ethics and Corporate Social Responsibility Chapter 2 2 -1 © 2007 Prentice Hall

Chapter 2 Objectives After studying this chapter, you will be able to: • Discuss what it means to practice good business and explain the three factors that influence ethical behavior • Identify three steps that businesses are taking to encourage ethical behavior • List four questions you might ask yourself when trying to make an ethical decision • Explain the difference between an ethical dilemma and ethical lapse 2 -2 © 2007 Prentice Hall

Chapter 2 Objectives, cont. • Explain the controversy surrounding corporate social responsibility • Discuss how a business can become more socially responsible • Define sustainable development and explain the strategic advantages of managing with sustainability as a priority 2 -3 © 2007 Prentice Hall

Two Sets of Ideals Social Responsibility Ethics 2 -4 © 2007 Prentice Hall

What is Ethical Behavior? • Definition • Competing Fairly and Honestly • Communicating Truthfully • Not Causing Harm to Others 2 -5 © 2007 Prentice Hall

Competing Fairly and Honestly • Trade Secrets • Industrial Espionage • Pretexting 2 -6 © 2007 Prentice Hall

Communicating Truthfully • Tell the Truth, Whole Truth and Nothing but the Truth • Transparency 2 -7 © 2007 Prentice Hall

Not Causing Harm to Others • Insider Trading • Conflict of Interest 2 -8 © 2007 Prentice Hall

Corporate Fraud Adelphia World. Com Ford and Firestone 2 -9 © 2007 Prentice Hall

Corporate Fraud Enron Tyco Arthur Andersen 2 -10 © 2007 Prentice Hall

Ethical Business Behavior Organizational Behavior Knowledge Influential Factors Cultural Differences 2 -11 © 2007 Prentice Hall

Be an Ethical Leader • Lead by example • Don’t tolerate unethical behavior • Inspire concretely • Acknowledge reality • Communicate • Be honest • Hire good people 2 -12 © 2007 Prentice Hall

The Four Questions • Is the decision legal? • Is it balanced? • Can you live with it? • Is it feasible? 2 -13 © 2007 Prentice Hall

Ethical Situations Ethical Dilemma Ethical Lapse 2 -14 © 2007 Prentice Hall

Business and Society • Consumers expect benefits that require money. • Business generates a majority of money in a free -market economy. • Standard of living is generally derived from profitseeking companies. • Businesses cannot hope to operate profitably without the many benefits provided by a safe and relatively predictable business environment. 2 -15 © 2007 Prentice Hall

Corporate Social Responsibility Perspectives • Minimalist • Defensive • Cynical • Conscientious 2 -16 © 2007 Prentice Hall

Efforts to Increase Social Responsibility Social Audit Philanthropy Cause-Related Marketing 2 -17 © 2007 Prentice Hall

Reduce Pollution Industrial Discharges Vehicle Emissions Chemical Spills 2 -18 © 2007 Prentice Hall

Responsibility Toward Consumers • Consumerism: § The right to safe products § The right to be informed § The right to choose § The right to be heard 2 -19 © 2007 Prentice Hall

Responsibility Toward Investors Fair Profit Distribution Social Responsibility Ethical Behavior 2 -20 © 2007 Prentice Hall

Responsibility Toward Employees • Equal Opportunity § Civil Rights Act § EEOC • Affirmative Action 2 -21 © 2007 Prentice Hall

Responsibility Toward Employees • People with disabilities § ADA • OSHA 2 -22 © 2007 Prentice Hall

Global Responsibilities • Bribery • Environmental Abuse • Unscrupulous Business Practices 2 -23 © 2007 Prentice Hall