Week 3 & 4 Chapter 4 Business Ethics PDF

4 Business Ethics and Social Responsibility: Doing Well by Doing Good Kelly/Williams, BUSN 12th Edition. © 2023 Cengage. All Rights...

4 Business Ethics and Social Responsibility: Doing Well by Doing Good Kelly/Williams, BUSN 12th Edition. © 2023 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 1  4-1 Ethics and Social Responsibility: A Close Relationship (1 of 2) Defining Ethics: Murkier Than You’d Think Ethics*: A set of beliefs about right and wrong, good and bad − Related to individuals and their day-to-day decision making A country’s legal system provides a solid starting point for examining ethical standards Kelly/Williams, BUSN 12th Edition. © 2023 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 2  Exhibit 4.1 Legal-Ethical Matrix Legal and Unethical Legal and Ethical Promoting high-calorie/low-nutrient Producing high-quality products foods with inadequate information about the risks Producing products that you know will Rewarding integrity break before their time Leading by example Paying nonliving wages to workers in Treating employees fairly developing countries Contributing to the community Respecting the environment Kelly/Williams, BUSN 12th Edition. © 2023 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 3  Exhibit 4.1 Legal-Ethical Matrix (continued) Illegal and Unethical Illegal and Ethical Embezzling money Providing rock-bottom prices only to distributors in underserved areas Engaging in sexual harassment Collaborating with other medical clinics to guarantee low prices in low-income counties (collusion) Practicing collusion with competitors Encouraging fraudulent accounting Kelly/Williams, BUSN 12th Edition. © 2023 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 4  4-1 Ethics and Social Responsibility: A Close Relationship (2 of 2) Universal Ethical Standards: A Reasonable Goal or Wishful Thinking? Universal ethical standards*: Ethical norms that apply to all people across a broad spectrum of situations − Trustworthiness − Respect − Responsibility − Fairness − Caring − Citizenship (acting beyond the job descrption) * Words accompanied by an asterisk are key terms from the chapter. Kelly/Williams, BUSN 12th Edition. © 2023 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 5  4-2 Business Ethics: Not an Oxymoron Business ethics*: The application of right and wrong, good and bad, in a business setting Ethical dilemma*: A decision that involves a conflict of values; every potential course of action has some significant negative consequences Kelly/Williams, BUSN 12th Edition. © 2023 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 6  4-3 Ethics: Multiple Touchpoints Kelly/Williams, BUSN 12th Edition. © 2023 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 7  4-3 Ethics: Multiple Touchpoints (1 of 4) Ethics and the Individual: The Power of One Influenced by personal needs, family, culture, religion, and personality traits A recent study shows that business leaders who score high on personal empathy exhibit high levels of ethical leadership Ethics and the Organization: It Takes a Village Organizations influence the ethical conduct of employees Kelly/Williams, BUSN 12th Edition. © 2023 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 8  4-3 Ethics: Multiple Touchpoints (2 of 4) Creating and Maintaining an Ethical Organization Elements of a strong culture − Involves displaying ethics-related actions at all levels of an organization and accountability for those actions Establishing an ethical culture − Involves backing up ethical words with documented practices, processes, and procedures well known around the world Kelly/Williams, BUSN 12th Edition. © 2023 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 9 4-3 Ethics: Multiple Touchpoints (2 of 4) Kelly/Williams, BUSN 12th Edition. © 2023 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 10  4-3 Ethics: Multiple Touchpoints (3 of 4) Code of ethics*: A formal, written document that defines the ethical standards of an organization and gives employees the information they need to make ethical decisions across a range of situations − Although specific codes of ethics vary greatly among organizations, an effective code of ethics flows directly from ethical corporate values − Commitment to an ethical culture leads directly to ongoing communication, training, and action * Words accompanied by an asterisk are key terms from the chapter. Kelly/Williams, BUSN 12th Edition. © 2023 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 11  4-3 Ethics: Multiple Touchpoints (4 of 4) Steps for implementing a code of ethics 1. Get executive buy-in and commitment to follow through 2. Establish expectations for ethical behavior at all levels of the organization 3. Integrate ethics into mandatory staff training 4. Ensure that the ethics code is global and local in scope 5. Build and maintain a clear, trusted reporting structure for ethical concerns and violations 6. Establish protection for whistle-blowers 7. Enforce the code of ethics Kelly/Williams, BUSN 12th Edition. © 2023 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 12  4-4 Defining Social Responsibility: Making the World a Better Place Kelly/Williams, BUSN 12th Edition. © 2023 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 13 Exhibit 4.4 The Spectrum of Social Responsibility Kelly/Williams, BUSN 12th Edition. © 2023 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 14  4-4 Defining Social Responsibility: Making the World a Better Place (1 of 5) The Stakeholder Approach: Responsibility to Whom? Stakeholders*: Any groups that have a stake—or a personal interest—in the performance and actions of an organization − Core stakeholders include customers, employees, investors, and the broader community RESPONSIBILITY TO EMPLOYEES: CREATING JOBS THAT WORK − Going beyond legal compliance, creating a workplace environment that respects the dignity and value of each employee * Words accompanied by an asterisk are key terms from the chapter. Kelly/Williams, BUSN 12th Edition. © 2023 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 15  4-4 Defining Social Responsibility: Making the World a Better Place (2 of 5) RESPONSIBILITY TO CUSTOMERS: VALUE, HONESTY, AND COMMUNICATION − A core responsibility of business is to deliver consumer value by providing quality products at fair prices − Consumerism*: A social movement that focuses on four key consumer rights: (1) the right to be safe, (2) the right to be informed, (3) the right to choose, and (4) the right to be heard − Planned obsolescence*: The strategy of deliberately designing products to fail in order to shorten the time between purchases * Words accompanied by an asterisk are key terms from the chapter. Kelly/Williams, BUSN 12th Edition. © 2023 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 16  4-4 Defining Social Responsibility: Making the World a Better Place (3 of 5) RESPONSIBILITY TO INVESTORS: FAIR STEWARDSHIP AND FULL DISCLOSURE − Achieving and maintaining long-term earnings in the context of responsibility to all stakeholders may mean trading short-term profits for long-term success − Sarbanes–Oxley Act*: Federal legislation passed in 2002 that sets higher ethical standards for public corporations and accounting firms  Key provisions limit conflict-of-interest issues and require financial officers and CEOs to certify the validity of their financial statements * Words accompanied by an asterisk are key terms from the chapter. Kelly/Williams, BUSN 12th Edition. © 2023 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 17  4-4 Defining Social Responsibility: Making the World a Better Place (4 of 5) Responsibility to the Community: Business and the Greater Good Corporate Cause-related Corporate philanthropy* marketing* responsibility* All business donations to Marketing Business contributions to nonprofit groups, partnerships between the community through including money, businesses and nonprofit the actions of the products, and employee organizations, designed business itself rather time to spike sales for the than donations of money company and raise and time money for the nonprofit * Words accompanied by an asterisk are key terms from the chapter. Kelly/Williams, BUSN 12th Edition. © 2023 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 18  4-4 Defining Social Responsibility: Making the World a Better Place (5 of 5) RESPONSIBILITY TO THE ENVIRONMENT − Companies must follow minimum standards for environmental protection set at federal, state, and local levels − Businesses have embraced sustainable development and are taking steps to reduce their carbon footprint  Sustainable development*: Doing business to meet the needs of the current generation, without harming the ability of future generations to meet their needs  Green marketing*: Developing and promoting environmentally sound products and practices to gain a competitive edge * Words accompanied by an asterisk are key terms from the chapter. Kelly/Williams, BUSN 12th Edition. © 2023 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 19  4-5 Ethics and Social Responsibility in the Global Arena: A House of Mirrors? Kelly/Williams, BUSN 12th Edition. © 2023 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 20  4-5 Ethics and Social Responsibility in the Global Arena: A House of Mirrors? Challenging issues faced by companies − Bribery and corruption − Responsibilities to workers abroad  Companies should establish codes of conduct for vendors by setting clear policies for human rights, wages, safety, and environmental impact Kelly/Williams, BUSN 12th Edition. © 2023 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 21  4-6 Monitoring Ethics and Social Responsibility: Who Is Minding the Store? Kelly/Williams, BUSN 12th Edition. © 2023 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 22  4-6 Monitoring Ethics and Social Responsibility: Who Is Minding the Store? Firms are monitoring themselves − Social audit*: A systematic evaluation of how well a firm is meeting its ethics and social responsibility goals − Success is evaluated using a double bottom line Companies are motivated to self-regulate because of: − Groups such as activist customers, investors, unions, environmentalists, and community groups − The threat of government legislation * Words accompanied by an asterisk are key terms from the chapter. Kelly/Williams, BUSN 12th Edition. © 2023 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 23