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Business Ethics And

Social Responsibility
Exploring Business

Chapter 3
© 2007 Prentice-Hall, Inc. 3-1
Chapter Objectives
Exploring Business

1. Define business ethics and explain what it


means to act ethically
2. Solve ethical dilemmas and make ethical
decisions
3. Identify ethical issues in business and
rationalizations for unethical behavior
4. Specify actions managers take in creating
and sustaining ethical organizations
5. Explain how organizations are responsible
to stakeholders
6. Identify threats to natural environment and
how businesses are addressing them.

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© 2007 Prentice-Hall, Inc.
Recent
Unethical Headlines
Exploring Business

om
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C n ron
o E
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Lost
Contr
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c o lp hia
y
T Ade

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© 2007 Prentice-Hall, Inc.
Idea of Business Ethics
Exploring Business

• What Is Ethics?
– Ethical Behavior
– Business Ethics

• What Is Social Responsibility?


– Corporate Social Responsibility
– Stakeholders
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© 2007 Prentice-Hall, Inc.
Ethical
Organization Activities
Exploring Business

• Treat Others Fairly


• Fairness = Top Priority
• Everyone Accountable
For Actions
• Communicate Core
Values & Principles
• Demand/Reward Integrity
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Good Corporate Citizens
Exploring Business

• Proctor & • Cisco


Gamble • Southwest
Airlines
• Intel
• AT & T
• Avon • Starbucks
• Herman Miller • Merck
• Timberland • Medtronic
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© 2007 Prentice-Hall, Inc.
Attitudes In
Unethical Companies
Exploring Business

• Uneasy About Work


• Object To Treatment
• Uncomfortable About
Coworkers Treatment
• Question Management
Directives & Policies
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© 2007 Prentice-Hall, Inc.
Why Study Ethics?
Exploring Business

• Ethics of future different than


today/past
• Understand difference
between acceptable &
unacceptable
• Recognize/deal with
ethical challenges
• Know right/wrong = marketable
job candidate
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© 2007 Prentice-Hall, Inc.
Ethical Self-Examination
Exploring Business

1. I’m Always Ethical


2. I’m Mostly Ethical
3. I’m Somewhat Ethical
4. I’m Seldom Ethical
5. I’m Never Ethical
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Creation
Of Ethical Challenges
Exploring Business

“…arise in business
because…multiple
stakeholders…make
conflicting demands.”

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Ethical
Exploring Business

• Dilemmas

• Decisions—Ethical Lapse

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Ethical Issues
Exploring Business

1) Bribes
2) Conflicts of Interest
3) Conflicts of Loyalty
4) Issues of Honesty and
Integrity
5) Whistleblowing
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© 2007 Prentice-Hall, Inc.
Bribes vs. Gifts
Exploring Business

➴Cost
➴Timing
➴Type
➴Connection
➴Check Company Policy
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© 2007 Prentice-Hall, Inc.
Conflicts Of Interest
Exploring Business

Promote
- Personal Interest
- Above Others
Interferes With Best Interest
of Company Stakeholders
Use of Private Information

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© 2007 Prentice-Hall, Inc.
Conflicts Of Loyalty
Exploring Business

Loyalty To?
 Employer

Family/Friend

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Issues Of
Honesty & Integrity
Exploring Business

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Whistleblowing
Exploring Business

Applauded or Shunned

Career Suicide

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Exploring Business
Rationalizations
My Behavior Isn’t Really
Illegal Or Immoral
My Action Is In Everyone’s
Best Interests
No One Will Find Out What I’ve
Done
The Company Will Condone My
Action And Protect Me
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© 2007 Prentice-Hall, Inc.
Ethics Influencers
Exploring Business

 Personal Values
 Top Managers
 Supervisors
 Coworkers
 Subordinates
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© 2007 Prentice-Hall, Inc.
Ethical Leadership
Exploring Business

Culture
Constant Touch
Policies &
Expectations
Encourage Awareness
Role Models
Hold Subordinates
Accountable
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© 2007 Prentice-Hall, Inc.
Code Of Conduct
Exploring Business

 Principles & Guidelines


Topics
- Use Of Corporate
Funds & Resources
- Conflict Of Interest
- Protection Of Proprietary
Information
Enforcement
Encourages Reporting
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© 2007 Prentice-Hall, Inc.
Corporate
Social Responsibility
Exploring Business

“…the approach…an
organization takes in
balancing its
responsibilities toward
different stakeholders
when making…
decisions.”
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Model Of
Corporate Responsibility
Exploring Business

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Social Responsibility
And Stakeholders
Exploring Business

Owners
Employees
Customers
Communities
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© 2007 Prentice-Hall, Inc.
Stakeholders - Owners
Exploring Business

Accurate/Reliable
Information

Fiduciary
Responsibilities

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© 2007 Prentice-Hall, Inc.
Stakeholders - Employees
Exploring Business

Safety & Health


Freedom From
Sexual Harassment
Equal Opportunity
& Diversity
Wages & Benefits
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© 2007 Prentice-Hall, Inc.
Wage Gaps
Exploring Business

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© 2007 Prentice-Hall, Inc.
Exploring Business Stakeholders - Customers

Right To Safe Products

Right To Be
Informed

Right To Choose

Right To Be Heard
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© 2007 Prentice-Hall, Inc.
Exploring Business Stakeholders - Community
Financial Contributions
Volunteerism
Supporting Social
Causes
Environmentalism
- Land Pollution
- Air Pollution
- Water Pollution 3-29
© 2007 Prentice-Hall, Inc.
Five Faces Of
Corporate Responsibility
Exploring Business

 Defensive
 Compliant
 Managerial
 Strategic
 Civil
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© 2007 Prentice-Hall, Inc.