>>>>>>>> Chapter 2

Business Ethics and

Social Responsibility
 n g G oa l s
Learni

1 Explain the concepts of business 5 Discuss how organizations shape

ethics and social responsibility. ethical behavior.

2 Describe the factors that influence 6 Describe how businesses’ social

responsibility is measured.
business ethics.

Summarize the responsibilities of

3 List the stages in the development
7 business to the general public,
of ethical standards.
customers, and employees.

4 Identify common ethical dilemmas

Explain why investors
in the workplace.
are concerned with
8
business ethics and
social responsibility.
 f or E t hi ca l
Concern s
a l Is s u e
and Societ
Business Ethics
The standards of conduct and moral values governing actions and
decisions in the work environment.
– Social responsibility.
– Balance between what’s right and what’s profitable.
– Often no clear-cut choices.
– Often shaped by the organization’s ethical climate.

Sarbanes-Oxley Act
2002 law that added oversight for the nation’s major companies and a
special oversight board to regulate public accounting firms that audit
the financial records of these corporations.
 t em p o ra r y
The Con n t
i ro n m e
Ethical Env
• High profile investigations
and arrests in headlines.
• Vast majority of businesses
ethical.
• New corporate officers
charged with deterring
wrongdoing and ensuring
ethical standards.
Johnson & Johnson Website
 d u al s M a ke
Indivi
AD i f fe r en c e
• Individuals can make the
difference in ethical expectations
and behavior
– Putting own interest ahead of the
organization
– Lying to employee
– Misrepresenting hours
– Safety violations
– Internet Abuse

• Technology is expanding
unethical behavior
 l o pm e n t o f
Deve
u al E th i c s
Individ
 ob E t h ic al
On-the-J
Dilemmas

Telling the
truth and
Situation in which a adhering to
business decision deeply felt
may be influenced ethical
for personal gain. principles in
business
decisions.
Businesspeople
expect
Employee’s employees to be
disclosure of loyal
illegal, and truthful, but
immoral, or ethical conflicts
unethical may arise.
practices in the
 g a n i z a t io n s
How Or ct
E th i ca l C o n d u
Shap e
 w are n e ss
Ethical A

Code of Conduct
Formal statement that
defines how the
organization expects
and requires
employees to resolve
ethical questions.
 E du ca ti o n
Ethical

Codes of conduct
cannot detail a solution
for every ethical
situation, so
corporations provide
training in ethical
reasoning.
 Eth i c al A cti o n

Helping employees
recognize and reason
through ethical
problems and turning
them into ethical
actions.
 eade rs hi p
Ethical L

Executives must
demonstrate ethical
behavior in their
actions.
 po n s ib ly t o
Acting Res
ti sf y So c i ety
Sa

Social Responsibility
• Management’s consideration of profit,
consumer satisfaction, and societal
well-being of equal value in evaluating
the firm’s performance.
• Contributions to the overall economy,
job opportunities, and charitable
contributions and service.
• Organizations measure through social
audits.
 e spo n s ib i l ity
Areas of R
 ib i li ti e s t o
Respons
e ra l P u b li c
the Gen
• Public Health Issues. What to do about inherently dangerous
products such as alcohol, tobacco, vaccines, and steroids.
• Protecting the Environment. Using resources efficiently,
minimizing pollution.
• Recycling. Reprocessing used materials for reuse.
• Developing the Quality of the Workforce. Enhancing quality of
the overall workforce through education and diversity initiatives.
• Corporate Philanthropy. Cash contributions, donations of
equipment and products, and supporting the volunteer efforts of
company employees.
 ibi li ti e s t o
Respons
Cu s to m e r s

• The Right to Be Safe. Safe operation of products,

avoiding product liability.
• The Right to Be Informed. Avoiding false or misleading
advertising and providing effective customer service.
• The Right to Choose. Ability of consumers to choose
the products and services they want.
• The Right to Be Heard. Ability of consumers to
express legitimate complaints to the appropriate parties.
 i bi li ti e s t o
Respons
E mp lo y e e s
• Workplace Safety. Monitored by Occupational Safety and Health
Administration.
• Quality-of-Life Issues. Balancing work and family through
flexible work schedules, subsidized child care, and regulation
such as the Family and Medical Leave Act of 1993.
• Ensuring Equal Opportunity on the Job. Providing equal
opportunities to all employees without discrimination; many
aspects regulated by law.
• Age Discrimination. Age Discrimination in Employment Act of
1968 protects workers age 40 or older.
• Sexual Harassment and Sexism. Avoiding unwelcome actions
of a sexual nature; equal pay for equal work without regard to
gender.
 ibi li ti e s t o
Respons
Investors

• Obligation to make profits for shareholders.

• Expectation of ethical and moral behavior.
• Investors protected by regulation by the
Securities and Exchange Commission
and state regulations.