BUS 200 – Ethics and Social Responsibility PDF

| business.gmu.edu BUS 200 – Ethics and Social Responsibility Learn Here. Lead Anywhere.  | business.gmu.edu Being a Competitive Multinational Company The most competitive multinationals and global companies today go beyond legal complianc...

| business.gmu.edu BUS 200 – Ethics and Social Responsibility Learn Here. Lead Anywhere.  | business.gmu.edu Being a Competitive Multinational Company The most competitive multinationals and global companies today go beyond legal compliance and prioritize ethical conduct, social responsibility, and sustainable business practices. Being accountable Moral issues Learn Here. Lead Anywhere.  | business.gmu.edu Figure 2.1: Where People Want to Shop and Work Source: Adapted from PriceWaterhouseCoopers Strategy+Business website, “Beyond Compliance: Consumers and Employees Want Business to Do More on ESG,” PwC Consumer Intelligence Series, June 2, 2021. Learn Here. Lead Anywhere.  | business.gmu.edu The Importance of Competitive Advantage Competitive advantage Attribute that is difficult to imitate and enables a firm to outperform its competitors in the same industry Trustworthiness Integrity Ethical behavior Do well by doing good! Learn Here. Lead Anywhere.  | business.gmu.edu Why Be Ethical and Socially Responsible? Benefits of a competitive advantage that embraces ethical behavior and social responsibility include: Greater brand loyalty, equity, and differentiation Higher employee retention, loyalty, and morale Increased sales, margins, and profits Enhanced goodwill within the community Lower risk of lawsuits, protests, and boycotts Learn Here. Lead Anywhere.  | business.gmu.edu Figure 2.2: People Want Business to Lead on Social Change Source: Compiled from the discussion in the 21st Annual Edelman Trust Barometer, Edelman & Data Intelligence website (http://www.Edelman.com/2021-trust-barometer) January 13, 2021, pp.34-38 Learn Here. Lead Anywhere.  | business.gmu.edu Ethical Theories Ethical behavior Individual behavior in accordance with principles for good conduct or morality Ethical dilemma Not a legal question Utilitarianism Ethics theory advocating actions that foster happiness and opposing actions that cause unhappiness Maximize good outcomes and minimize bad outcomes Unilever’s climate transition action plan Learn Here. Lead Anywhere.  | business.gmu.edu Ethical Theories Rights theory Ethics theory that says every human being has rights, and all governments are obligated to protect them UN’s Universal Declaration of Human Rights All humans are born free and equal in dignity and rights Cultural relativism Ethics theory that says the morality of an act depends on how the act is perceived within that specific culture at the time of the act When in Rome do as the Romans do Learn Here. Lead Anywhere.  | business.gmu.edu Ethical Theories Theory of justice Ethics theory that describes a society of free citizens who have equal basic rights and who cooperate within an egalitarian economic system Finding solutions to ethical dilemmas that are most equitable and fair to all parties VF Corporation European Central Bank Learn Here. Lead Anywhere.  | business.gmu.edu Business Ethics: Code of Ethics Code of ethics Formal statement that conveys ethical values and describes baseline professional conduct expected of individuals Ethical imperialism A good global ethics code includes built-in flexibility to allow for some discretion of local subsidiary managers Learn Here. Lead Anywhere.  | business.gmu.edu Business Ethics: Sources of Unethical Behavior The two principal sources of unethical behavior are: The moral integrity of individuals A firm’s managerial setting or policies Leaders need to set the example of company expectations. Moral integrity earns moral respect. Learn Here. Lead Anywhere.  | business.gmu.edu Corporate Social Responsibility: Efficiency and Profits as Social Responsibility Adam Smith Competitive markets are the most efficient method of allocating resources and maximizing society’s well-being Milton Friedman A company’s sole responsibility is to maximize profits for its owners (shareholders) Learn Here. Lead Anywhere.  | business.gmu.edu Corporate Social Responsibility: Business Responsibilities to Society Corporate social responsibility (CSR) Belief that a company should incorporate social objectives within its goals and policies and contribute positively to society Learn Here. Lead Anywhere.  Figure 2.4: Pyramid of Corporate Social Responsibilities Source: Adapted from Archie B. Carroll, “Carroll’s Pyramid of CSR: Taking Another Look,” International Journal of Corporate Social Responsibility 1:3, 2016. Learn Here. Lead Anywhere.  | business.gmu.edu Corporate Social Responsibility: Stakeholder Theory Stakeholder theory View of capitalism that stresses the interconnected relationships between a business and those who have an interest, or “stake,” in the organization Stakeholders All parties who affect, or are affected by, a company’s activities Internal stakeholders External stakeholders Learn Here. Lead Anywhere.  | business.gmu.edu Corporate Social Responsibility: Stakeholder Theory – Benefit Corporations Benefit corporation Form of business entity that is legally empowered to pursue positive stakeholder impacts alongside profits Certified B Corporation movement Patagonia Bancolombia Danone North America Tillamook Bigelow Learn Here. Lead Anywhere.  | business.gmu.edu Additional Key Global Issues: Bribery and Corruption Foreign Corrupt Practices Act (FCPA) Law that forbids US companies, subsidiaries, or citizens from bribing government officials or political candidates worldwide Small “grease” (facilitating) payments to expedite a deal or transaction are permitted, but not to make a deal happen The Sarbanes-Oxley Act established stringent accounting standards and reporting practices for firms Enron Learn Here. Lead Anywhere.  | business.gmu.edu Corruption What is corruption as it relates to global business? What is the primary cause of corruption? Who is primarily responsible for corruption as it relates to global business? Where is corruption a major problem? Learn Here. Lead Anywhere.  | business.gmu.edu Least and Most Corrupt According to Transparency International Denmark Burundi Finland Equatorial Guinea New Zealand Haiti Norway North Korea Singapore United States = 24 Libya Sweden Yemen Switzerland Venezuela Netherlands South Sudan Germany Syria Ireland Somalia Transparency International: ttps://www.transparency.org/en/cpi/2022 Learn Here. Lead Anywhere.  | business.gmu.edu Foreign Corrupt Practices Act (FCPA) Passed in 1977 after Lockheed bribery scandal in Japan Prohibits: o …any offer, payment, promise to pay, or authorization of the payment of money or anything of value to any person… o …to influence the foreign official in his or her official capacity, induce the foreign official to do or omit to do an act in violation of his or her lawful duty, or to secure any improper advantage in order to assist in obtaining or retaining business… Also applies to foreign firms and persons who commit such an act within the US in furtherance of a corrupt payment. Two key provisions: o Prohibition of the bribe itself o Record-keeping requirements for publicly traded corporations Learn Here. Lead Anywhere.  | business.gmu.edu Additional Key Global Issues: Working Conditions and Human Rights Companies are monitoring the actions of their own employees and the employees of companies with which they conduct business Levi Strauss’ “Terms of Engagement” But such efforts are not always well received H&M Learn Here. Lead Anywhere.  | business.gmu.edu Additional Key Global Issues: Diversity, Equity, and Inclusion Diversity in the workplace means that a firm’s employees represent a limitless variety of social viewpoints, cultural perspectives, experiences, and identities. Equity in the workplace means that a company offers every employee an equal opportunity for work and advancement. Inclusion in the workplace means that a company welcomes every employee, whatever their identity, and helps them to feel they are an integral part of the organization. Learn Here. Lead Anywhere.  | business.gmu.edu Additional Key Global Issues: Diversity, Equity, and Inclusion DEI Efforts Within Companies A diversity, equity, and inclusion statement can establish a company’s commitment to these ideals. Apple McDonald’s Nike Impact sourcing A practice that brings marginalized groups into the global business services workforce Learn Here. Lead Anywhere. Thank You. Learn Here. Lead Anywhere.