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Demanding Ethical and Socially Responsible Behavior

This document discusses ethics and corporate social responsibility. It defines ethics as moral standards of behavior accepted by society. It discusses scandals in industries like real estate and banking that shook trust in the free market. It advocates punishing unlawful behavior, increasing transparency, and considering ethics over just legality. It profiles individuals involved in large fraud schemes like Bernie Madoff's Ponzi scheme. It discusses how top management must support ethics codes and train employees to consider ethics in decisions. International ethics and corporate social responsibility are also addressed.

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Emily Chen
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143 views

Demanding Ethical and Socially Responsible Behavior

This document discusses ethics and corporate social responsibility. It defines ethics as moral standards of behavior accepted by society. It discusses scandals in industries like real estate and banking that shook trust in the free market. It advocates punishing unlawful behavior, increasing transparency, and considering ethics over just legality. It profiles individuals involved in large fraud schemes like Bernie Madoff's Ponzi scheme. It discusses how top management must support ethics codes and train employees to consider ethics in decisions. International ethics and corporate social responsibility are also addressed.

Uploaded by

Emily Chen
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
You are on page 1/ 24

Demanding

Ethical and
Socially
Responsible
Behavior
CHAPTER 4

Key Words/Terms Chapter # 4


1. Ethics
2. Whistleblowers
3. Corporate
Social
Responsibility
4. Insider trading
5. Social audit
6. Ponzi Scheme

LIFE AFTER SCANDAL


Scandals have shaken the real
estate, mortgage and banking
industries.
How do we restore trust in the
free market system?
-

Punish those who have broken the


law.
Make accounting records more
transparent.
Consider what is ethical, not just
what is legal.
4-3

WHAT are ETHICS?

Ethics -- The standards of moral behavior.

Behaviors that are accepted by society as right


versus wrong.

4-4

Dennis Kozlowski

Bernard "Bernie Madoff


(film)
Bernard Lawrence "Bernie"
Madoff born April 29, 1938, is
an American convicted of
fraud and a former
stockbroker, investment
advisor, and financier. He is
the former non-executive
chairman of the NASDAQ
stock market, and the
admitted operator of a Ponzi
scheme that is considered to
be the largest financial fraud
in U.S. history.

What is a Ponzi Scheme

PAYING the PRICE


(Legal Briefcase)

Enron: One executive is serving a 24 year sentence for


accounting fraud while another will be released in October
2011.
Arthur Andersen: Convicted of tampering with witnesses,
the company was dissolved and about 28,000 people lost
their jobs.
Tyco International: Two executives stole $600 million from
the company and are scheduled to be released from prison
in 2030.
Adelphia Communication: Two executives were convicted
of conspiracy, bank and securities fraud and given
sentences of 15 and 20 years.
WorldCom: Former CEO was convicted of fraud,
conspiracy and false filings and sentenced to 25 years.
4-8

ETHICS and YOU


Whistleblowers-- insiders who report illegal
activites or unethical behavior to authorities.

4-9

FACING ETHICAL DILEMMAS

Before proceeding, ask yourself these series of


questions:

- Is it legal?
- Is it balanced?
- How will it make me feel about myself?
- What if my actions were the headlines in my local
newspaper, how would I feel?
- How would my mother feel knowing about my
actions?

4-10

ETHICS STARTS at the TOP and Filters down

Trust between workers and


managers must be based on
fairness, honesty, openness
and moral integrity.
Leadership can help instill
corporate values in
employees.

4-11

HOW to IMPROVE AMERICAS


BUSINESS ETHICS
1. Top management must adopt and unconditionally
support an explicit corporate code of conduct.
2. Employees must understand that senior management
expects all employees to act ethically.
3. Managers and others must be trained to consider the
ethical implications of all business decisions.
(continued)
4-12

HOW to IMPROVE AMERICAS


BUSINESS ETHICS
4. An ethics office must be set up with which employees
can communicate anonymously.
4A. Whistleblowers -- People who report illegal or
unethical behavior. (should be held in high regard)
5.Involve outsiders such as suppliers,
subcontractors, distributors and customers.
6.The ethics code must be enforced.

4-13

8 Tips on How to PREVENT Unethical


Behaviors
1. Managers must communicate the organizations
vision on ethical behavior.
2. Organizations must have a code of ethics.
3. Policies have to be enforced regarding ethical
offences.
4. Ethical responsibility must be taught to all
employees.
Source: James Gehrke, Magnify Leadership & Development, November 2008.

(continued)
4-14

HOW to PREVENT UNETHICAL


BEHAVIORS
5. Discussions of ethics must be included in the
decision-making process.
6. Accountability must be taken seriously at all
levels in the organization.
7. Organizations must act fast when a crisis occurs.
8. Employees must know they have to defend and
maintain their companys reputation.
4-15

Insider Trading

Mathew Martoma

INTERNATIONAL ETHICS
Today, many businesses want socially responsible
behavior from their international suppliers.
Example: heightened surveillance of third-world
production facilities by both branded apparel
manufacturers and by retailers as well.
The Joint Initiative on Corporate Accountability and
Workers Rights was designed to make creating a
single set of labor standards and inspecting factories
easier.
4-18

CORPORATE SOCIAL
RESPONSIBILITY
Corporate Social Responsibility (CSR) -- The
concern businesses have for the welfare of society.

CSR is based on a commitment to


integrity, fairness, and respect.
Example:
Green Mountain Coffee
CSR proponents argue that
businesses owe their existence to
the societies they serve and cannot
exist in societies that fail.
4-19

Worlds Biggest Givers

AMERICAS MOST ADMIRED


COMPANIES
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.

Apple
Amazon
Google
Berkshire Hathaway
Starbucks
Coca Cola
Disney
Fed Ex
Southwest Airlines
GE

4-21

CORPORATE RESPONSIBILITY
and POLICY
Corporate Responsibility -- Includes everything

from hiring minority workers to making safe products,


minimizing pollution, using energy wisely, and
providing a safe work environment.

Corporate Policy -- The position a firm takes on

social and political issues. (Patagonia donates 1% of


sales and profits to the environment.) Firms such as
TOMS and Warby & Parker are social stewards as
well
4-22

SOCIAL AUDITING
Social Audit -- A systematic evaluation of an
organizations progress toward implementing
programs that are socially responsible and
responsive.
Companies ask themselves this question
We are talking the talk but are we walking
the walk?

4-23

Right in our own backyard


View class film

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