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CH4 Ethics and Social Responsibility-Slides

Chapter 4 discusses the importance of ethics and corporate social responsibility in business, defining key concepts such as business ethics, ethical dilemmas, and corporate social responsibility. It outlines common ethical issues, rationalizations for unethical behavior, and steps to maintain integrity in a business environment. The chapter emphasizes the need for organizations to adopt ethical codes and practices to ensure accountability to stakeholders and promote ethical conduct.

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Jerome Barrita
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6 views21 pages

CH4 Ethics and Social Responsibility-Slides

Chapter 4 discusses the importance of ethics and corporate social responsibility in business, defining key concepts such as business ethics, ethical dilemmas, and corporate social responsibility. It outlines common ethical issues, rationalizations for unethical behavior, and steps to maintain integrity in a business environment. The chapter emphasizes the need for organizations to adopt ethical codes and practices to ensure accountability to stakeholders and promote ethical conduct.

Uploaded by

Jerome Barrita
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Chapter 4

Ethics and Corporate


Social Responsibility
(c) Virginia Tech, Department of Management, Pamplin College of Business.
CC BY NC SA 4.0.
Objectives
● Upon completing the learning activities associated with this lesson, class
participants should be able to:
● Define business ethics and explain what it means to act ethically in business.
● Explain why we study business ethics.
● Identify ethical issues that you might face in business, such as insider trading,
conflicts of interest, and bribery, and explain rationalizations for unethical
behavior
● Identify steps you can take to maintain your honesty and integrity in a business
environment.
● Define corporate social responsibility and explain how organizations are
responsible to their stakeholders, including owners, employees, customers, and
the community.
● Discuss how you can identify an ethical organization, and how organizations can
What are Ethics?
Ethics: To know right from wrong and to know when you’re practicing one instead of
the other

Acting ethically in business means more than simply obeying applicable laws and
regulations: It also means being:

● Honest
● Doing no harm to others
● Competing fairly
● Declining to put your own interests above those of your company, its owners,
Ifand its workers
you're in business, you obviously need a strong sense of what's
right and wrong
Ethical Issues and
Dilemmas
● Ethical issues are the difficult social questions that involve some level of
controversy over what is the right thing to do. Environmental protection
is an example of a commonly discussed ethical issue, because there can
be tradeoffs between environmental and economic factors.
● Ethical dilemmas are situations in which it is difficult for an individual
to make decisions either because the right course of action is unclear or
carries some potential negative consequences for the person or people
involved
Conflict of Interest
Individuals must choose between taking actions that promote their
personal interests over the interests of others or taking actions that
don’t.

Examples:
● Can I buy office supplies from my brother-in-law?
● My uncle owns a bakery, should I encourage my subordinates to
use them for all meetings?
Contemplating an Ethical
Decision
Basic Moral Value
Doing things Wrong
Doing things RIGHT ● Cheating
● Integrity ● Cowardice
● Respect for human life ● Cruelty
● Self control
● Honesty
● Courage
● Self-sacrifice
How to Maintain Honesty
and Integrity
Facing Ethical Dilemmas

● How do I know if an action is unethical?

● There's an app for that!

● The Golden Rule Test

● What if others find out, it becomes public?

● Do the right thing, even if no one is looking


Facing Ethical Dilemmas
How, for example, would you answer questions like the following?
1) Is it OK to accept a pair of sports tickets from a supplier?
2) Can I buy office supplies from my brother-in-law?
3) Is it appropriate to donate company funds to a local charity?
4) If I find out that a friend is about to be fired, can I warn her?
Refuse to Rationalize
There are four common rationalizations (excuses) for justifying
misconduct:

1. My behavior isn’t really illegal or immoral. Rationalizers try to


convince themselves that an action is OK if it isn’t downright illegal or
blatantly immoral. They tend to operate in a gray area where there’s no
clear evidence that the action is wrong.
2. My action is in everyone’s best interests. Some rationalizers tell
themselves: “I know I lied to make the deal, but it’ll bring in a lot of
business and pay a lot of bills.” They convince themselves that they’re
expected to act in a certain way.
3. No one will find out what I’ve done. Here, the self-questioning
comes down to “If I didn’t get caught, did I really do it?” The answer is
yes. There’s a simple way to avoid succumbing to this rationalization:
Always act as if you’re being watched.
How to Improve 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
How to Improve Business
Ethics
4. An ethics office and/or forum must be set up with which employees can
communicate anonymously. Whistleblowers --People who report illegal
or unethical behavior.

5.Involve outsiders (other Stakeholders) such as suppliers, subcontractors,


distributors and customers.

6.The ethics code must be enforced


Global Business Ethics

● Much more gray


● More open for abuse
● Know the customs
● Companies can have great positive influence
● Train and role play
Socially Responsible
Corporate social responsibility refers to the approach that an organization
takes in balancing its responsibilities toward different stakeholders when
making legal, economic, ethical, and social decisions

● Owners
● Managers
● Employees
○ Wages & Benefits
○ Health & Safety
● Customers
○ Consumer Rights
● Communities
○ Philanthropy
Commitment to
Employees
Wages & Benefits
● Minimum Wage
-$7.25/hr(Federal Rate)
● Social Security
● Unemployment
Insurance
● Workers Compensation
● Optional –Medical,
Dental, Vision Care

Health & Safety


● Never Assume
● Should be #1 Priority, no
exceptions
● Have to be reported to
Department of Labor
Consumer Rights-
Kennedy
(1) The right to safe products. A company should sell no product that it
suspects of being unsafe for buyers. Thus, producers have an obligation to
safety-test products before releasing them for public consumption.
Ex. Automobile testing, Child Safety Products, UL® -Electrical Products
(2) The right to be informed about a product.Sellers should furnish consumers
with the product information that they need to make an informed purchase
decision.
Ex. Pillows with tags, Clothing tags, Food labels
(3) The right to choose what to buy. Consumers have a right to decide which
products to purchase, and sellers should let them know what their options are.
Ex. Pharmacists, Telephone companies, Purchasing Car/Finance
(4) The right to be heard. Companies must tell customers how to contact them
with complaints or concerns. They should also listen and respond
Social Responsibility

Corporate Philanthropy– includes charitable donation

Corporate Social Initiatives– Includes enhanced forms of corporate


philanthropy
Social Responsibility -
Examples
● Business ethics are hugely important and
Takeaways the foundation for both corporate and
individual business behavior and decisions.

● There are various form of unethical


business conduct and you need to detect
and avoid such behavior.

● Unethical behavior has huge negative


consequences and can bring down
companies and end individual careers.

● Companies protect themselves and they


encourage ethical behavior through their
code of conduct, business ethics policies,
diversity & inclusion programs, anti-
harassment policies and being good
corporate citizens through the concept of
corporate social responsibility. Your choices
Chapter 4

Q&A

(c) Virginia Tech, Department of Management, Pamplin College of Business.


CC BY NC SA 4.0.

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