Mr.

Elsesser
Introduction to Business
What would you do if…
“You are in a class taking
an exam, you are struggling,
your teacher turns her back
and the student in front of you
has the answer sheet available
for you to see,
what do you do?”
 Could your decision become habit forming?
 Is it legal?
 Is it the right thing to do?
 Could I defend my actions?
 Is it just, balanced and fair?
 How will I feel about myself?
When you are guided by ethics, you do not cheat
on a test or lie to friends or family.
 The American economy is driven by these activities.

 ETHICS:
 moral principles by which people conduct themselves
personally, socially, or professionally
 Most businesses are guided by business ethics.

 BUSINESS ETHICS:
 rules based on moral principles about how businesses
and employees ought to conduct themselves

Different cultures, businesses, and industries

have different ethical standards.
 In what ways can businesses have a set of moral
principles that they follow?
Displaying Business Ethics

Creating safe Creating Fair treatment

products jobs of
employees

Truthful about
Environmental
financial
protection
status
EXAMPLE:

In Thailand, it is customary to exchange gifts

during a second business meeting.

In China, gift giving is considered a form of

bribery and is illegal.
 In business, people follow rules as well as a code of
ethics.
 Code of Ethics:
 a set of guidelines for maintaining ethics in the workplace
 Example:
 Sweatshops:
 Shops or factories where workers are employed for long hours
at low wages and under unhealthy conditions.
 The tragic 1911 fire at the NYC Triangle Shirtwaist Factory caused change

The Occupational Safety and Health Administration (OSHA)

sets and enforces work-related health and safety rules.
 Many actions make up unethical business practices…

 These Include:
 Lying
 Offering merchandise known to be substandard
 Treating customers or employees unfairly

If a business violates government regulations, the

owner can be fined or go to jail.
Example: Selling Products in Cuba

 If an employee violates a company or professional code,

the employee might be fired or lose his or her license.
 Example: A Doctor or Lawyer abusing their power
Violating ethical codes of conduct can have many
unwanted consequences.

 These Include:
If a business violates government regulations, the
owner can be fined or go to jail.
Example: Selling Products in Cuba

If an employee violates a company or professional

code, the employee might be fired or lose his or her
license.
Example: A Doctor or Lawyer abusing their power
 More unwanted consequences.
Unethical business practices can result in bad
word of mouth and result in lost sales.
Example: Fair Trade Coffee

Unethical behavior toward employees can

lead to legal action or a high rate of employees
quitting.
Example: Poor Treatment/Unfair Pay/Abuse
 Major ethical questions that are generally not
illegal.
Conflict of Interest:
A conflict between self-interest and a professional
obligation.

Examples:
Hiring a friend over somebody more qualified
Abusing work privileges for personal gain, just
because you can.
Anything that is NOT ACTING IN THE BEST INTEREST
OF THE COMPANY
 BRAINSTORM:
 Should students report behavior of other students who are
violating the school’s ethical code of conduct?
 Should employees report behavior that violates ethics policies?

 The National Business Ethics Survey reports…

 52% of employees observed at least one type of misconduct
 69% reported their organizations implement ethics training
 65% indicated their organization offer ethics advice
 55% observed misconduct at work and reported it

 Is NOT saying anything really worth it?

 When you encounter an ethical decision and must choose
a course of action ask yourself 3 questions…

1. Is it against the law? Does it violate

company or professional policies?

2. Even if everyone is doing it, how would I

feel if someone did this to me?

3. Am I sacrificing long-term benefits for

short-term gains?
 Use these steps to solve ethical problems…

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.
1. What is the difference between personal and business ethics?
1. Personal ethics: moral principles that guide an individual; business
ethics: rules, based on moral principles, used by a business.

2. Describe some of the ways that unethical business practices

can affect a business.
1. Customers will not patronize the business.
2. It is hard to retain employees. If the behavior is illegal, the business
might be fined.

3. What is the relationship between illegal behaviors of

business and unethical behaviors of business?
1. Generally, illegal behaviors of business are also considered
unethical but there are some unethical behaviors that are not
illegal.
 What does Social
Responsibility mean?

 What can a business

or organization
do to be socially
Responsible?
Social Responsibility:
The duty to do what is best for the good of
society

The social responsibility of business takes into

consideration all that business does or does not
do to solve the problems of society.
Businesses that follow So, how do businesses
ethical standards value exhibit social
integrity and honesty in responsibility within their
employees. companies?

Ethics are an integral part

of their business practices.

Some businesses are

concerned about limiting
the damage that they do
to the environment.
 Responsibility to Responsibility to
Customers Employees

Responsibility

Responsibility to Responsibility to
Society Creditors and
Owners

Why do you think this is so important?

Businesses should offer a good, safe product
or service at a reasonable price.
EXAMPLE: The FDA (Food & Drug Admin.) is a gov’t
agency that protects consumers from dangerous or
falsely advertised products.

Fair competition among businesses is necessary

for the marketplace to operate effectively.
When companies conspire to restrict
competition, consumers are affected.
 Earth-Friendly Products

Many beauty-product companies include mission

statements regarding the environment in their
advertising and on their labels.

Origins, for one, promises to preserve the earth,

animals, and the environment.
Businesses can show responsibility to
employees in various ways:
Providing work experience for people with limited
job skills
Volunteerism
Providing safe working conditions
Equal treatment
Fair pay
Equal Pay Act:
Requires men and women be paid equally
American with Disabilities Act:
Bans discrimination against people with
physical or mental disability.
 TO SOCIETY TO CREDITORS & OWNERS
In 1970, the U.S. government The government passed the
created the Environmental Sarbannes-Oxley Act to
Protection Agency (EPA). mandate truthful reporting.
The EPA enforces rules Sarbannes-Oxley makes
that protect the the CEO of a business
environment and control more accountable for the
pollution. actions of the financial
managers of a firm.
1. How is producing a good or service a way of being
socially responsible?
1. Many products and services benefit society.

2. What is the mission of the Food and Drug

Administration?
1. The FDA protects the quality and safety of the
food and drugs in the marketplace.

3. What is one of the biggest social issues that

businesses face today?
1. Environmental responsibility is one of
the biggest issues.