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ETHICS & SOCIAL

RESPONSIBILITY
ETHICS IN BUSINESS
ETHICS: a set or moral principles or values that
govern behavior.

Businesses develop ethics to help them determine


how to behave. These ethics reflect a company’s
beliefs about what actions are appropriate and fair
among people.
CODE OF ETHICS
A document that outlines the
principles of conduct to be used in
making decisions within the
organization.
CONTENT OF
ETHICAL CODES
Honesty – Trading in securities/using
Adherence to the law confidential info
Product safety and quality
– Acquiring and using info
Health and safety in the
workplace about competitors
Conflicts of interest – Security
Employment practice – Payments to obtain business
Selling and marketing
practices – Political activities
Financial reporting – Protection of the
Pricing, billing and Environment
contracting
CONTENT OF
ETHICAL CODES
Do you think a teacher’s
code of ethics is different
than a police officers?
Why?
CONTENT OF
ETHICAL CODES
Merely establishing a code of ethics
does not prevent unethical behavior.
To be effective, codes of ethics
must be enforced.
•It is very important that companies
discipline employees who violate their
codes of ethics.
CONTENT OF
ETHICAL CODES
Merely establishing a code of ethics
does not prevent unethical behavior.
To be effective, codes of ethics
must be enforced.
•It is very important that companies
discipline employees who violate their
codes of ethics.
BEHAVING
ETHICALLY
Businesspeople regularly make ethical decisions.
These decisions have very important consequences
for both individuals and their companies.
Behaving unethically can hurt, or even end, a
businessperson’s career.
It can cause a business to lose millions of dollars or
even go out of business!
Behaving ethically helps employees gain the trust of
the people with whom they work or even their
customers, suppliers, etc.
BEHAVING
ETHICALLY
Some situations that cause a
break in the code of ethics
when dealing with honesty is:
•Employee Theft
•Lying about Hours Worked
•Falsifying Records
DEALING WITH
ETHICAL DILEMMAS
Ethical Dilemmas: are
situations which the ethical
course of action is not clear.
Ethical Dilemmas arise
regularly in the business
world.
DEALING WITH
ETHICAL DILEMMAS
Get with a partner and try and
come up with a scenario that
you think would be an ethical
dilemma in the workplace.
DEALING WITH
ETHICAL DILEMMAS
Get with a partner and try and
come up with a scenario that
you think would be an ethical
dilemma in the workplace.
DEALING WITH ETHICAL
DILEMMAS
A way to approach ethical dilemma is to answer a series of
questions like these:
1. Have you defined the problem accurately?
2. How would you define the problem if you stood on the
other side of the fence?
3. Whom could your decision or action injure? Can you
discuss the problem with the affected parties before you make
your decision?
4. Are you confident that your position will be as valid
over a long period of time as it seems now?
5. Could you disclose without qualm your decision or action
to your boss, your CEO, the board of directors, your family,
and society as a whole?
LAWS RELATING TO ETHICS IN
BUSINESS
THE SHERMAN ACT
•The purpose of the law is to ensure that companies remain able to
compete fairly.
THE CLAYTON ACT of 1914
•Makes it illegal to charge different prices to different wholesale
customers.
•It also bans the practice of requiring a customer to purchase a
second good.
THE WHEELER ACT of 1938
•Bans unfair or deceptive acts or practices, including false
advertising.
•Business must inform consumers of possible negative
consequences of using their products
CONSUMER PROTECTION
Several laws protect consumers in the United States against
unethical and unsafe business practices.
•FEDERAL FOOD, DRUG, and COSMETIC ACT
Bans the sale of impure, improperly labeled, falsely guaranteed, and unhealthful
foods, drugs, and cosmetics
•CONSUMER PRODUCT SAFETY COMMISSION
Was established in 1972
Establishes minimum product safety standards on consumer products.
NIKE in 1999 the CPSC recalled a quarter of a million Nike Water Bottles because the cap
was not attached properly, possibly causing them to choke.

•LOANS
A series of laws protects U.S. consumers against unfair lending practices.
Under the Truth in Lending Act of 1968, creditors are required to let consumers know how much they are
paying in finance charges and interest.
ENVIRONMENTAL
PROTECTION
Since the late 1960s environmental protection has been an
important social and economic issue in the United States. This
concern has been reflected in the man laws designed to protect
the environment:
•THE NATIONAL ENVIRONMENTAL POLICY ACT OF 1969
Created the Environmental Protection Agency (EPA) whose mission is to protect human
health and safeguard the air, water, and land.

•CLEAN AIR ACT of 1970


Regulates air emissions.

•TOXIC SUBSTANCES CONTOL ACT of 1976


Enacted to give the EPA the ability to track the 75,000 industrial chemicals currently
produced in or imported into the US

•CLEAN WATER ACT of 1977


Gives the EPA the authority to set standards on the type and quantity of pollutants that
industries can put into bodies of water.
CONSUMER &
ENVIRONMENTAL
PROTECTION

Get with a partner and discuss


what is the important of
consumer & Environmental
Protection.
ETHICAL STANDARDS &
CULTURE
Standards of business ethics differ
around the world.
This means that business practices that are
acceptable in one country may be
considered unethical in others.
Business managers working in other
countries must be aware of these
different ethical standards.
ETHICAL STANDARDS &
CULTURE
Corporate Gift Giving
•Depends on culture, country, etc.
•US—government officials are not allowed to accept
expensive gifts from businesses
Intellectual Property
•Refers to ownership of ideas, such as inventions,
books, movies, and computer programs.
SOCIAL
RESPONSIBILITY
Social Responsibility: Refers to the obligation
that individuals or businesses have to help
solve social problems.
SOCIAL RESPONSIBILITY
Views toward social responsibility evolved through
three distinct schools of thought:
•Profit maximization
In the 19th century and early 20th century businesses believed their role was
simply to maximize profit
•Trusteeship management
In the 1920s and 1930s businesses recognized they had obligations to their
employees, their customers and their creditors.
•Social involvement
During the 1960s they began to believe that corporations should use their
influence and financial resources to address social problems.
STAKEHOLDERS
Include a company’s employees, customers,
supplier and the community!
MEASURING SOCIAL
RESPONSIBILITY
To measure how socially responsible a
company is, some managers perform social
audits.
Social Audit: is a review of a business’s social
responsiveness
•Our country measures through the following
three ways.
PHILANTHROPY &
VOLUNTEERISM
Efforts to improve human welfare
Companies grant paid time off to employees to
participate in charitable events
•Donate blood
•Food and clothing drives
•United Way
Matching Funds
ENVIRONMENTAL
AWARENESS
Limiting the damage their operations
cause to the environment
Establishing policies that reduce
pollution
Encourage car pooling
Using biodegradable products and
refillable containers
SENSITIVITY TO
DIVERSITY & QUALITY OF
WORK LIFE
One of the most important ways a company can
demonstrate its sense of social responsibility is
through
Maintain ethnically diverse workforces that reflect
the societies in which they operate
Adopt polices that contribute to the quality of life
of their workers
•Flexible work hours
•Onsite daycare

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