Business Ethics and Social Responsibility PDF

Business Ethics and Social Responsibility www.wileybusinessupdates.com Chapter Two Copyright  2019 John Wiley & Sons, Inc.  Learning Objectives 2 2 1 Explain the concern for ethical 4 Describe how businesses...

Business Ethics and Social Responsibility www.wileybusinessupdates.com Chapter Two Copyright  2019 John Wiley & Sons, Inc.  Learning Objectives 2 2 1 Explain the concern for ethical 4 Describe how businesses and societal issues can act responsibly to satisfy society Explain the ethical 2 Describe the contemporary responsibilities of ethical environment 5 businesses to investors and the financial community Discuss how organizations 3 shape ethical conduct  Concern for Ethical and Societal Issues 3 3  Business Ethics  The standards of conduct and moral values governing work actions and decisions  Social Responsibility How a business decision impacts the environment, employees, and customers Enhancement of society’s welfare through philosophies, policies, procedures, and actions Copyright  2019 John Wiley & Sons, Inc. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall  Concern for Ethical and Societal Issues (continued) 4 4  Firms have many responsibilities—to customers, to employees, to investors, and to society as a whole  Business ethics are often  Often no clear-cut choices shaped by the organization’s ethical climate  Codes of conduct  Ethical standards  Doing the right things should be supported and applauded Copyright  2019 John Wiley & Sons, Inc.  The Contemporary Ethical Environment 5 5  High-profile investigations and arrests in headlines  Corporate Social Responsibility Benefits  Consumers  Investors  The environment  The companies themselves  The vast majority of businesses are ethical  New corporate officers charged with deterring wrongdoing and ensuring ethical standards  The Rise and Fall of Enron - The Biggest Scanda l in the History of American Finance (youtube.c Copyright  2019 John Wiley & Sons, Inc. om)  Starbucks Standards of Business Conduct 6 6  Operating in 65 countries with more than 21,000 stores, Starbucks has earned the number one ranking in the area of social responsibility from Fortune Magazine’s Most Admired Companies  Copyright  2019 John Wiley & Sons, Inc.  Coca-Cola Company’s Global Sustainability Goals 7 7  Access Coca-Cola’s  Coca-Cola’s Global Sustainability sustainability report Report highlights the company’s goals related https://www.coca-colac to women, water, and ompany.com/content/d am/company/us/en/rep well-being orts/coca-cola-business -sustainability-report-2 022.pdf Copyright  2019 John Wiley & Sons, Inc.  To economically  The Contemporary Ethical 8 Environment  Sarbanes Oxley Act  A 2002 law that added oversight for the nation’s major companies  Includes a special oversight board to regulate public accounting firms that audit the financial records of these corporations  New rules and regulations for securities trading and accounting practices  Companies are required to publish a code of ethics  Development of ethical compliance programs  Provides safeguards for whistleblowers Copyright © 2019 John Wiley & Sons, Inc.  Current Ethical Environment 9 9  Current environment includes ethical compliance officers  Companies adopt a three-pronged approach to ethics and social responsibility  Corporate philanthropy  Anticipating and managing risks  Identifying opportunities to create value by doing the right thing Copyright  2019 John Wiley & Sons, Inc.  The Contemporary Ethical 10 Environment Copyright © 2019 John Wiley & Sons, Inc.  Individuals Make a Difference 1111  Individuals can make the difference in the ethical environment of an organization  Unethical behavior can be identified as:  Putting one’s own interest ahead of the organization  Lying to employees  Misrepresenting hours  Safety violations  Internet abuse  Technology has expanded unethical behavior  All employees face ethical dilemmas Copyright  2019 John Wiley & Sons, Inc.  Development of Individual Ethics 1212 They obey external rules. Groups influence how they choose. They take the larger needs of society into account Copyright  2019 John Wiley & Sons, Inc.  Common Business Ethical Challenges 1313 Situation in which an Telling the truth and action benefitting one adhering to deeply felt person or group ethical principles in can potentially harm business situations another Employees are expected to be loyal, and to act in the Employee’s disclosure best interests of the of illegal, immoral, or company, but an ethical unethical practices in conflict can arise when the the organization truth about a company is not favorable  Common Business Ethical Challenges 14  A conflict of interest occurs when a business person is faced with a situation in which an action benefiting one person or group has the potential to harm another. Ethical ways to handle conflicts of interest include (1) avoiding them and (2) disclosing them.  Employers highly value honesty and integrity. Having integrity means adhering to deeply felt ethical principles in business situations.  Individuals may have to decide between loyalty to the company and truthfulness, especially when it comes to business relationships. Some place the highest value on loyalty, even at the expense of truth.  Whistle-blowing is an employee’s disclosure to company officials, government authorities, or the media of illegal, immoral, or unethical practices. Copyright © 2019 John Wiley & Sons, Inc.  Common Business Ethical Challenges 15 Employers and employees value honesty and integrity, but what should happen when employees misuse Internet privileges for personal purposes? © August Columbo/Stockimo/Alamy Stock Photo Copyright © 2019 John Wiley & Sons, Inc.  Structure of an Ethical Environment 1616 Copyright  2019 John Wiley & Sons, Inc.  Ethical Awareness 1717  Awareness is the  A code of conduct is foundation of an ethical a way to provide climate support  Ethical dilemmas will occur  A formal statement  Help employees  Defines how the identify ethical organization problems expects employees  Give employees to resolve ethical guidance to respond questions Copyright  2019 John Wiley & Sons, Inc.  Ethical Awareness 1818  The code of conduct emphasizes “maintaining a culture of integrity” and defines three basic core values:  “Do what’s right;  Respect others;  Perform with excellence.” Copyright  2019 John Wiley & Sons, Inc.  Ethical Education 1919  A code of conduct  Some question provides only a whether ethics can be framework taught  Business must provide  Training gives tools to evaluate employees the chances options to apply ethical values  Many firms have to hypothetical instituted ethics situations training programs Copyright  2019 John Wiley & Sons, Inc.  Ethical Education 2020 Ethics: Can it be Taught? Copyright  2019 John Wiley & Sons, Inc.  Ethical Action 2121  Firms must allow structures and approaches  Structure allow decisions to be turned into ethical actions  Set realistic goals  An employee hotline with ethics officers can provide advice Copyright  2019 John Wiley & Sons, Inc.  Starbucks 2222  At Starbucks, after identifying an ethical problem, the “Ethical Decision Making Framework” outlines the following to help partners (employees) determine the best approach:  Is it consistent with Our Starbucks Mission, the Standards of Business Conduct, and any applicable law or regulation?  Would your approach embarrass you or Starbucks?  How would your approach look published in the newspaper?  Would you be comfortable with the example it sets for future decisions?  If the path isn’t clear, ask for guidance. Copyright  2019 John Wiley & Sons, Inc.  Follow through on your decision.  Ethical Leadership 2323  Executives must demonstrate ethical behavior in their actions  Use clear, explicit language  Encourage behavior that generates and fosters values  Practice moral absolutism  Without a framework of ethics, damage can impact shareholders  Stakeholders include customers, investors, employees, and the public Copyright  2019 John Wiley & Sons, Inc.  Ethical Leadership 2424 “Trickle-Down” Effect Copyright  2019 John Wiley & Sons, Inc.  Acting Responsibly to Satisfy Society 2525 A firm’s social performance is Social Responsibility   measured through a social audit,  Equal value in and by: considering profit,  Equal employment consumer satisfaction, opportunities and societal well-  Cultural diversity being  Environmental concerns  Safe and healthy workplace  Concerns with  Charitable contributions and qualitative community service dimensions and traditional quantitative measures Copyright  2019 John Wiley & Sons, Inc.  Acting Responsibly to Satisfy Society 26 Businesses are judged by their interactions with the surrounding community, including employees volunteering at charitable events. © Steve Debenport/iStockphoto Copyright © 2019 John Wiley & Sons, Inc.  Acting Responsibly to Satisfy Society 27  A company that takes into account the full cost of doing business is said to use a triple bottom line approach to measure its overall performance.  This strategy places equal value on the three Ps:  People,  Planet,  and Profit.  Socioeconomic Model; the belief that business, as part of its role, owes its existence to improving the society in which it operates.  Economic Model; one in which businesses believe strongly that their sole role is to maximize profits and increase value to shareholders. Copyright © 2019 John Wiley & Sons, Inc.  Business’s Social Responsibilities 2828 Copyright  2019 John Wiley & Sons, Inc.  Responsibilities to the General Public 2929  Public Health Issues  Dangerous products  Protecting the Environment  Using resources efficiently  Developing a quality workforce  Education and diversity initiatives  Corporate philanthropy  Contributions and volunteer efforts Copyright  2019 John Wiley & Sons, Inc.  Responsibilities to the General Public 30  One of the most complex issues facing business as it addresses its ethical and social responsibilities to the general public is public health. Central to the public-health debate is the question of what businesses should do about products such as tobacco and alcohol.  Businesses impact the environment through the energy they consume, the waste they produce, the natural resources they use, and more.  Environmental sustainability: reduce, reuse, and recycle. Each vehicle generates 240 pounds of waste, and the company is proud that every bit has been kept out of landfill. Copyright © 2019 John Wiley & Sons, Inc.  Responsibilities to the General Public 31 Copyright © 2019 John Wiley & Sons, Inc.  Responsibilities to the General Public 32  A country’s true wealth, however, lies in its people.  An educated, skilled workforce provides the intellectual capital and know-how required to innovate, develop new technology, improve productivity, and compete in the global marketplace.  Companies respond by donating billions of dollars each year to not-for-profit organizations. This corporate philanthropy includes cash contributions, donations of equipment and products… Copyright © 2019 John Wiley & Sons, Inc.  Responsibilities to the General Public 33  Positive benefits of Corporate Philanthropy; higher employee morale, enhanced company image, and improved customer relation ships.  Many contribute to the Olympics and create advertising that promotes the company’s sponsorship. CAUSE-RELATED MARKETING Copyright © 2019 John Wiley & Sons, Inc.  Responsibilities to the General Public 34 The UPS Foundation believes that tree planting, part of the Global Forestry Initiative, is a very effective way to remove carbon from our environment—in addition to creating better farming conditions to increase available foods, jobs, and shelter. Copyright © 2019 John Wiley & Sons, Inc.  Responsibilities to Customers 3535  The public demands that a company considers the wants and needs of its customers in making decisions  Consumerism—the public demand that a business consider the wants and needs of its customers in making decisions—has gained widespread acceptance.  Consumers have certain rights, as follows:  The right to be safe  The right to be informed  The right to choose  The right to be heard Copyright  2019 John Wiley & Sons, Inc.  Responsibilities to Customers 36 Product liability refers to the responsibility of manufacturers for injuries and damages caused by their products. Copyright  2019 John Wiley & Sons, Inc.  Responsibilities to Employees 3737  Workplace Safety  Quality-of-Life Issues  Ensuring Equal Opportunity on the Job  Age Discrimination  Sexual harassment and sexism Copyright  2019 John Wiley & Sons, Inc. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall  Workplace Safety 38 Workplace safety is an important business responsibility. In potentially dangerous areas, workers are required to wear safety equipment, including hard hats and protective eyewear. Laurentiu Iordache/iStockphoto Copyright  2019 John Wiley & Sons, Inc.  Quality-of-Life Issues 39  Balancing work and family  Squeezed between working long hours and handling child- care issues, caring for elderly parents, and solving other family crises.  Sandwich Generation; those caring for two generations— their children and their aging parents—has arisen. Sandwich Generation Copyright  2019 John Wiley & Sons, Inc.  Ensuring Equal Opportunity on the Job 40  Businesspeople face many challenges:  Managing today’s increasingly diverse workforce.  Technology; with physical disabilities can contribute in the workplace.  Recruiting and managing older workers and workers with varying lifestyles.  The Equal Employment Opportunity Commission (EEOC) ; created to increase job opportunities for women and minorities and to help end discrimination based on race, color, religion, disability, gender, or national origin in any employment practice such as hiring, firing, promotions, transfers, or wage practices. Copyright  2019 John Wiley & Sons, Inc.  Ensuring Equal Opportunity on the Job 41 Laurentiu Iordache/iStockphoto Copyright  2019 John Wiley & Sons, Inc.  Age Discrimination 42 Employers are responsible for avoiding age discrimination in the workplace. As the average age of workers rises, employers will benefit from the older generation’s knowledge. Gregg Matthews/The New York Times/Redux Pictures Copyright  2019 John Wiley & Sons, Inc.  Sexual Harassment and Sexism 43  Every employer has a responsibility to ensure that all workers are treated fairly and are safe from sexual harassment.  Sexual harassment refers to unwelcome sexual advances, requests for sexual favors, and other verbal or physical harassment of a sexual nature.  Sexual harassment is often part of the broader problem of sexism—discrimination against members of either sex but primarily affecting women. Copyright  2019 John Wiley & Sons, Inc.  Business Ethics and Social Responsibility www.wileybusinessupdates.com Chapter Two Copyright  2019 John Wiley & Sons, Inc.