Ethics

and
Social Responsibility
_Chapter 2_
Business Ethics
Ethics is a branch
of philosophy that
studies and
creates theories
about the basic
nature of right
and wrong, duty,
obligation, and
virtue.
Three Levels
of Ethical
Standards
The law , which
defines for society as a whole
those actions that are
permissible and those that are
not. The law is the narrowest
level of ethical standards. The
law merely establishes the
minimum standard of
behavior.
Organizational policies
and procedures, which
serve as specific guidelines
for people as they make
daily decisions. Policies and
procedures include a
broader definition of ethical
standards that go beyond
what is defined by the law.
The moral stance, is the
broadest and most fundamental
definition of ethical standards.
The values people learn early in
life at home, from their religious
upbringing, in the communities
they were raised in, in school,
and at work are key ingredients
at this level.
Moral
Management
Establishing
an Ethical Step 1. Identify the personal moral and ethical principles that shape all
business decisions.

Framework

Step 2. Recognize the ethical dimensions involved in the dilemma or

decision.

Step 3. Identify the key stakeholders involved and determine how the
decision will affect them.

Step 4. Generate alternative choices and distinguish between ethical and

unethical responses.

Step 5. Choose the “best” ethical response and implement it.

Why Ethical
Lapses Occur
Establishing and Maintaining Ethical
Standards
Ten Ethical Principles to Guide Behavior
Business’s Responsibility to the Environment
Business’s Responsibility to Employees

● Asking for their

Listening to ● Providing regular
input and involving
employees and feedback—positive ● Telling them the
them in the
respecting their and negative—to truth—always
decision-making
opinions employees
process

● Trusting them;
● Rewarding
● Letting them creating an
employees for
know exactly what’s environment of
performing their
expected of them respect and
jobs well
teamwork
 Right to Safety

The right to safety is the most basic consumer right.

Business’s
Responsibility Right to Know

to Customers Consumers have the right to honest communication about

the products and services they buy and the companies that
sell them.

Right to Be Heard

The right to be heard suggests that the channels of

communication between companies and their customers run
in both directions.
Business’s Right to Education

Responsibility
to Customers Socially responsible companies give customers access
to educational material about their products and
services and how to use them properly.

Right to Choices

Inherent in the free enterprise system is the

consumer’s right to choose among competing
products and services.
Business’s Responsibility
to the Community
End