Business in A Global Environment: Business Ethics and Social Responsibility

Part 1 Business in a Global Environment
Chapter 2
Business Ethics and Social Responsibility
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Copyright 2005 by South-Western, a division of Thomson Learning, Inc. All rights reserved.
Chapter Objectives
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Explain the concepts of business ethics and social responsibility. Describe the factors that influence business ethics. List the stages in the development of ethical standards. Identify common ethical dilemmas in the workplace. Discuss how organizations shape ethical behavior. Describe how businesses social responsibility is measured. Summarize the responsibilities of business to the general public, customers, and employees. Explain why investors and the financial community are concerned with business ethics and social responsibility.
Concern for Ethical and Societal Issues
Business ethicsstandards of business conduct and moral values governing actions and decisions in the work environment.

Right Wrong Balance between doing what is right and doing what is profitable
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Concern for Ethical and Societal Issues
Constituencies to which businesses are responsible:
Conflicts may arise

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The New Ethical Environment

High profile investigations and arrests in headlines. Yet vast majority of businesses ethical. New corporate officers charged with deterring wrongdoing and ensuring ethical standards.
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Johnson & Johnsons Credo (Part 1)
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Johnson & Johnsons Credo (Part 2)
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Individuals make a difference in ethical expectations and behavior. Main types of unethical behavior : lying, withholding information, abusing or intimidating employees, inaccurately reporting working time, discrimination. Technology seems to have expanded the range and impact of unethical behavior.
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Development of Individual Ethics Stages of Moral and Ethical Development
The individuals stage is determined by many factors : Experiences, family, educational, cultural, religious background, firms environment/culture.
Common Business Ethical Challenges
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On-the-Job Ethical Dilemmas
Conflict of Interestsituation in which an action benefiting one person or group has the potential to harm another. When ethical challenges involve the businesspersons own interests and those of someone to whom he has a duty or when they involve two parties to whom the businessperson has a duty. Handled by avoiding and disclosing. Honesty and Integritytelling the truth and adhering to deeply felt ethical principles in business decisions. Including doing what you say you will do and accepting responsibility for mistakes.
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On-the-Job Ethical Dilemmas
Loyalty vs. Truthbusinesspeople expect their employees to be loyal and truthful. But ethical conflicts may arise. Individuals may have to decide between loyalty to the company and truthfulness in business relationships. How to resolve such dilemmas? Whistleblowingemployees disclosure to government authorities or the media of illegal, immoral, or unethical practices in the organization.
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How Organizations Shape Ethical Conduct

Individual decisions are strongly influenced by the standards of conduct established within the organizations
Development of a corporate culture to support business ethics happens on four levels.
Structure of an Ethical Environment
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Ethical Awareness
Code of Conducta formal statement that defines how the organization expects and requires employees to resolve ethical questions. Ex : Johnson&Johnson credo
Ethical Reasoning
Codes of conduct cannot detail a solution for every ethical situation. So corporations provide training in ethical reasoning.
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Ethical Action
Structures and approaches that allow decisions to become actions. Ex : employee hotline.
Ethical Leadership
Executives must demonstrate ethical behavior in their actions. Who is charged to be an ethical leader?
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Acting Responsibly to Satisfy Society
Social Responsibilitymanagements acceptance of the obligation to consider profit, consumer satisfaction, and societal well-being of equal value in evaluating the firms performance. Social Auditsformal procedures that identify and evaluate all company activities relate to social issues such as conservation, employment practices, environmental protection, and philanthropy.
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Acting Responsibly to Satisfy Society
Responsibilities of Business
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Responsibilities to the General Public
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Public Health Issues
Smoking is dangerous and addictive

Smokers should continue to know about the dangers of smoking. We support a clear and consistent public health message about smoking, disease and addiction wherever we sell our products. We support the governments requirement to place health warnings on cigarette packaging and advertisements. We want the facts to continue to be widely known.
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Protecting the Environment
Recyclingreprocessing of used materials for reuse. Ex : bodyshop recycling paper bag Green marketingmarketing strategy that promotes environmentally safe products and production methods. Ex : carefoor shopping bag
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FTC Guidelines for Environmental Claims in Green Marketing
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Developing the Quality of the Workforce Including all efforts to enhance students and employee skills, helping women, members of various cultural groups and those who are physically challenged to contribute fully to the economy. Corporate Philanthropyact of an organization giving something back to the communities in which it earns profits. Including cash contribution and donations of equipment and products to notfor-profit organizations, and supporting the volunteer efforts of company employees.
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Responsibilities to Customers
Consumerismpublic demand that a business consider the wants and needs of its customers in making decisions.
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Right to Be Safe
Consumers should feel assured that what they purchase will not harm them in normal use
Product Liability-the responsibility of the manufacturer for injuries and damages caused by their products. Companys
efforts : product testing, product warning, correct or recall the dangerous product.
Right to Be Informed
Consumers should have enough access to education and product information to make responsible buying decisions. Companys efforts : avoiding misleading ad, toll-free customer service number, product warning. Ex : side effect of drugs, ingredients
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Wacky Warning Labels
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The Right to Choose
To select which goods and services they want and need to purchase
The Right to Be Heard
Should be able to express legitimate complaints to appropriate parties
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Responsibilities to Employees

Workplace Safety. Quality of Life Issues balancing work and family (family friendly program). Ensuring Equal Opportunity in the Job. Age Discrimination. Sexual Harrassment and Sexism inappropriate actions of a sexual nature in the workplace.
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Rates of Workplace Injuries and Illnesses
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Laws Designed to Ensure Equal Opportunity
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Laws Designed to Ensure Equal Opportunity
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Responsibilities to Investors and the Financial Community
Fundamental goal of any business is to make a profit. Investors and the financial community demand that businesses behave ethically as well as legally. Including reporting profit and financial performance honestly, providing highly qualified managerial talent to run the company.
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Part 1 Business in a Global Environment

Concern for Ethical and Societal Issues

Concern for Ethical and Societal Issues

Constituencies to which businesses are responsible:

Conflicts may arise

The New Ethical Environment

Johnson & Johnsons Credo (Part 1)

Johnson & Johnsons Credo (Part 2)

The New Ethical Environment

The New Ethical Environment

The New Ethical Environment

Common Business Ethical Challenges

On-the-Job Ethical Dilemmas

On-the-Job Ethical Dilemmas

How Organizations Shape Ethical Conduct

Acting Responsibly to Satisfy Society

Acting Responsibly to Satisfy Society

Responsibilities to the General Public

Responsibilities to the General Public

Public Health Issues

Smoking is dangerous and addictive

Responsibilities to the General Public

Protecting the Environment

FTC Guidelines for Environmental Claims in Green Marketing

Responsibilities to the General Public

Wacky Warning Labels

The Right to Choose

The Right to Be Heard

Should be able to express legitimate complaints to appropriate parties

Rates of Workplace Injuries and Illnesses

Laws Designed to Ensure Equal Opportunity

Laws Designed to Ensure Equal Opportunity

Responsibilities to Investors and the Financial Community

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