Business Ethics & Social Responsibility

• Society expects businesses to be more informed, affluent, and less litigious.
• Technology spreads both misinformation and disinformation while simultaneously highlighting business activities.

Key Considerations

• Determining whose influence within "society" is the greatest.
• Defining the concept of social responsibility.

Current Context

• Society is currently in the Fourth Industrial Revolution.
• We are entering a VUCA world, characterized by Volatility, Uncertainty, Complexity, and Ambiguity.
• Despite unprecedented global wealth, critical issues like climate change, poverty, and corruption are worsening.

Characteristics of a Good Company

• Good management connects ethical practices to overall management strategies.
• A good organization effectively manages ethics internally.
• Good citizenship involves actions that extend beyond the organization's boundaries.

The Canadian Context

• Canada features a pluralistic society encompassing over 680 First Nations, Inuit, and Métis communities, as well as immigrants from all over the globe.

Business-Government-Civil Society

• Society comprises broad groups sharing common traditions, values, and history.
• Canada's pluralistic society includes diverse values, backgrounds and aspirations with members often holding varying views.
• Canadian values center around diversity, freedom, democracy, the rule of law, and social protection.
• Business refers to private, commercial-value-oriented legal enterprises (for-profit, for-benefit, and co-operative).

The Business-Society Relationship: Licence to Operate

• The social contract defines the business-society relationship as a mutual expectation of behavior between the two.
• A social problem arises when there is a gap between business social performance and actual social expectations.
• Legitimacy is the alignment of business-society expectations, which is a precondition for business operating within the social system.
• Social license is the privilege of operating in a society with minimal formalized restrictions, based on public trust gained by meeting stakeholder expectations.
• Business corporations should meet humanity's needs without harming future generations.
• Ethical and environmental issues must be effectively managed.

Ethics and Integrity

• Business ethics encompasses the rules, standards, codes, or principles that guide morally appropriate behavior in business decision-making and its relationship with society.
• Integrity refers to the appropriateness of a corporation’s behavior and its adherence to moral guidelines acceptable to society, including honesty, fairness, and justice.

Integrity

• Integrity embodies being "whole" or "complete".
• A person with integrity is grounded in solid ethical principles, and acts in keeping with those principles.
• A company with integrity demonstrates appropriate behaviour and adherence to moral guidelines that are acceptable to society (honesty, fairness, and justice).
• Integrity is related to ethics, but distinct.
• Business leaders managing with integrity behave in a manner consistent with their own highest values and norms of behavior.
• Values are self-imposed but not arbitrary or self-serving.

Business Decision-Makers

• Owners consist of shareholder owners.
• Direct owners include shareholders, investors, entrepreneurs, employees (ESOPs), customers, producers (cooperatives), corporations, and governments.
• Indirect shareholders include mutual funds and employee pension plans.
• Boards of directors manage the business and affairs of a corporation and are elected by shareholders, focusing on ROI and CSR.
• Managers require diverse skills to oversee business operations in today’s dynamic economic environment.

Economic Systems

• An economic system uses land, labor, and capital to produce, distribute, and exchange goods and services to meet the needs and wants of people in society.
• Capitalism allows for private ownership of the means of production (land, labor, and capital). Economic decision-making is in the hands of individuals or enterprises who make decisions expecting to earn a profit.

Free Enterprise System

• Characterized by ownership of private property, the profit motive, a competitive market system, and no involvement by government.
• Laissez-faire capitalism operates with absolute minimum of interference by the government in the affairs of business.
• Responsible enterprise system operates as a free enterprise system but incorporates the element of accountability.
• Homo economicus/economic human pursues wealth for their own self-interest.
• Invisible hand refers to how well-functioning, competitive markets efficiently distribute society’s scarce resources without government intervention..
• Canada is very prosperous, but has significant negative impacts on people, and not all businesses are operating ethically.
• Society and business are intertwined

Sectors

• Private sector: market for most consumer goods & services
• Public sector: transportation, pensions, health, etc.
• Non-Profit (Third/Plural/Civil Society): solves needs of society
• Fourth Sector: For-benefit enterprises using market-based approaches
• When a business incorporates and becomes a corporation, a separate legal entity (artificial being) is created. This entity is invisible, intangible, exists only in contemplation of law, and offers limited liability for owners.

Concession doctrine

• Incorporation is granted by the government.
• Incorporation was conferred by public act and could not be generated merely by private agreements among several persons to associate together for business purposes.
• Freedom of association allows individuals to come together for some purpose is fundamental to forming a corporation.
• An entity (“going concern”) given life by real people, exhibits collective behaviour unique to it.
• AI may exhibit ethics biases and concerns, such as favouring men over women.

Macro-Level Analysis

• Considers broader-level large system phenomena that influence social dynamics.
• Influencers include the geopolitical environment, government (local, provincial, federal), business cycle (prosperity -> recessions), and the Canadian standard of living (economic growth, productivity, unemployment).

Meso-Level Analysis

• Considers specific dynamics within organizations, communities, and special interest groups.
• Influencers include decentralized decision-making, business wrongdoing, and media coverage.

Micro-Level Analysis

• Focuses on one-to-one interactions between individuals and individuals’ thought processes within a society.
• Individuals behave in their own self-interest - motivator.
• Self-interest is a motivator (drive for profit) to get things done.
• Balancing the intelligent, informed pursuit of wealth with preventing cruel, malicious greed.

Explore the increasing expectations on businesses in a rapidly changing world. This includes navigating misinformation, defining social responsibility, and understanding the characteristics of ethical and socially responsible companies within the Canadian context.