Slide 1. Slide 2. Slide 3. Business Ethics and Social Responsibility. BA-101 Introduction to Business. Ethics in the Workplace
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1 Slide 1 BA-101 Introduction to Business Business Ethics and Social Responsibility Chapter Two 1-1 Slide 2 Ethics in the Workplace Ethics beliefs about what is right and wrong or good and bad in actions that affect others Business ethics refers to ethical or unethical behaviors by employees in the context of their jobs 2-2 Slide 3 Business and Managerial Ethics Managerial Ethics standards of behavior that guide individual managers in their work Behavior toward Employees Behavior toward the Organization Behavior toward Other Economic Agents 2-3
2 Slide 4 Ethical Principles 1. Utility What action produces the greatest good and least harm to those involved? 2. Rights Does the action respect the rights of all individual s involved? 3. Justice Is the action equitable and consistent with justice? 4. Caring Is the action consistent with your responsibility to others? 2-4 Slide 5 Eight Steps to Sound Ethical Decision Making 1. Gather the facts 2. Define the ethical issues 3. Identify the affected parties 4. Identify the consequences 5. Identify the obligations 6. Consider your character and integrity 7. Think creatively about potential actions 8. Check your gut Trevino and Nelson (2007) Managing Business Ethics Straight Talk About How To Do It Right Chapter 2 - Ethics & Social Responsibility 5 Slide 6 Company Practices and Business Ethics Two of the most common approaches to formalizing top management commitment to ethical business practices: Adopting written codes Instituting ethics programs 2-6
3 Slide 7 Corporate Social Responsibility Social responsibility refers to the overall way in which a business attempts to balance its commitments to relevant groups and individuals in its social environment Organizational Stakeholders those groups, individuals, and organizations that are directly affected by the practices of an organization and who therefore have a stake in its performance 2-7 Slide 8 Historical Perspective on CSR Economic Model The demands of the marketplace will regulate business Legal Model Business will be regulated through legislation Social Model The needs of stakeholders will regulate business 8 Slide 9 The Pyramid of CSR 9
4 Slide 10 Responsibility Economic Pyramid of Corporate Social Responsibility Understanding the Four Components Societal Expectation Required Examples Be profitable. Maximize sales, minimize costs Legal Required Obey laws and regulations Ethical Expected Do what is right, fair, and just Philanthropic Desired/ Expected Be a good corporate citizen 10 Slide 11 The Stakeholder Model of Responsibility Most companies that strive to be responsible to their stakeholders concentrate first and foremost on five main groups: Customers Employees Investors Suppliers Local communities where they do business 2-11 Slide 12 Contemporary Social Consciousness The Concept of Accountability The expectation of an expanded role for business in protecting and enhancing the general welfare of society 2-12
5 Slide 13 Areas of Social Responsibility Environment Customers Employees Investors 2-13 Slide 14 Responsibility toward the Environment Air pollution Water pollution Land pollution Toxic waste disposal Are there responsibilities to the environment in addition to legal responsibilities? 2-14 Slide 15 Responsibility toward Customers Consumer rights Consumerism social activism dedicated to protecting the rights of consumers in their dealings with businesses Legal Responsibility - Unfair pricing Collusion two or more firms collaborate on such wrongful acts as price fixing Are there responsibilities to Consumers in addition to legal responsibilities? 2-15
6 Slide 16 Responsibility toward Employees Legal responsibility Providing employees with equal opportunities without regard to race, sex, or other irrelevant factors What other responsibilities do businesses have to employees? 2-16 Slide 17 Responsibility toward Investors Legal Responsibilities Insider trading using confidential information to gain from the purchase or sale of stocks. Misrepresentation of finances Are there responsibilities to the investors in addition to legal responsibilities? 2-17 Slide 18 Approaches to Social Responsibility 2-18
7 Slide 19 Approaches to Social Responsibility Obstructionist Stance involves doing as little as possible and may involve attempts to deny or cover up violations Defensive Stance company meets only minimum legal requirements in its commitments to groups and individuals its social environment 2-19 Slide 20 Approaches to Social Responsibility Accommodative Stance a company, if specifically asked to do so, exceeds legal minimums in its commitments to groups Proactive Stance a company actively seeks opportunities to contribute to the wellbeing of groups and individuals in its social environment 2-20 Slide 21 Managing Social Responsibility Programs 1. Social responsibility must start at the top and be considered a factor in strategic planning 2. A committee of top managers must develop a plan detailing the level of management support 3. One executive must be put in charge of the firm s agenda 4. The organization must conduct occasional social audits 2-21
8 Slide 22 Social Responsibility and the Small Business What about small business? For small businesses, ethical issues are questions of individual ethics How does a small business demonstrate social responsibility? 2-22
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