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Corporate Social

Responsibility
Presentation of Chapter 4
Ethics and Ethical Reasoning
Group Members
Kamran Bashir
Muhammad Ismail
Sanauallah Ramay
Kamran Ali
Kianat Maria

CS
The Meaning of Ethics
Business Ethics across Organizational Functions
Why Ethical Problems Occur in Business
Ethics in a Global Economy
Ethical Ethics, Law, and Illegal Corporate Behavior
Issues in
Business
Ethics: it is a conception of right and wrong. It tell us
whether our behavior is moral or immoral and deals
with fundamental human relationships.

The
Meaning of Ethical Principles: These are guides to moral
behaviors.
Ethics
Who give us these Guides?

CSR
Religion

Society
The Sources of
Meaning of Ethical
Ethics Guides.
Family

Schools
Honesty
Examples of
Ethical Keeping
Promises
Behaviors: Moral
Helping
others

The Respectin
g others
Rights
Meaning of Ethics
Lying
Ethics
Stealing
Immoral
Deceiving

Harming
others
Why Ethics vary?

Ethical Relativism: Which holds that ethical principles should


be defined by various periods of time in History, Societys
Traditions, the Special Circumstances of the moment, or
Personal Opinions.
The
Meaning of What is Business Ethics?

Ethics Business ethics is the application of general ethical ideas to


business behavior

CSR
Observations of unethical behavior at work

The
Meaning of
Ethics
Why should business be ethical?

To meet demands of business stakeholders.

To enhance business performance.


The
Meaning of To comply with legal requirements.

Ethics To prevent or minimize harm.

To promote personal morality.


Why Ethical
Problems
Occur in
Business?
Personal Gain and Selfish
Interest
Ethical egoist
Altruism

Why Ethical Examples1 . Raj Rajaratnam founder and former


hedge fund manager at the Galleon Groups ..insider
Problems trading

Occur in Example 2Dennis kozlowski former CEO of Tyco,


stealing $170 million from the company and also
Business? accused of borrowing $270 million from company loan
program and was sentenced to 25 years in New
York state prison.

CS
Competitive Pressures on
Profit
Price Fixing..
Why Ethical Example1 German antitrust regulators fined three
Problems coffee roaster firms and six managers of $229 million
for creating scheme to fix prices of beans.
Occur in
Business?

CSR
Conflict of Interest
A conflict of interest occurs when an individuals self-
interest conflict with acting in the best interest of
Why Ethical another, when individual has an obligation to do so.

Problems It undermines trust..


Example 1 Purchasing agent
Occur in Example 2 Doctors who prefer medicines of
Business? particular pharmaceutical companies
Cross-Cultural
Contradiction
This complex ethical problem occurs, When
multinational corporation do business in other
Why Ethical societies where the ethical and moral values differ
from those at home.
Problems example 1 PPG (Pittsburgh Plate Glass) Cameroon
Occur in unhealthy paint supply to African countries.
If Macdonald McDonalds and KFC start to supply same
Business? meat in Pakistan which they supply in USA

CSR
Core element of
Ethical Characters
Managers Values
Managers are key to whether a company
and its employees will act ethically or
unethically
The values held my managers will serve as
models for others who work at the company
Differences in ethical stances of U.S. versus
European managers and employees
Younger generation of managers more
concerned about ethics/social responsibility
A companys CSR performance is a major
factor when selecting a new
Spirituality in the
Workplace
Personal belief in a supreme being,
religious organization, power of nature or
some other life-guiding force.
Core
element of Organizations have responded to the
increased attention to spirituality and
religion at work by attempting to
Ethical accommodate their employees.

Characters Opponents of spirituality at work point to


the myriad of implementation issues as
grounds for keeping spirituality out of the
workplace.

Issues include which religion should be


promoted, and need for recognizing
diversity of religious beliefs.
4-16 Stages of Moral
Development
From childhood to mature adulthood
people move up in their moral
reasoning
Core
element of
Earliest stages of reasoning are ego-
centered

Ethical Most developed stages are principle-

Characters centered

Most managers make decisions based


on criteria in levels 3 and 4

Company executives reasoning has


wide implications both inside and
outside the organization
Core
element of
Ethical
Characters
Introduction Do no harm

Be fair and Just

Analyzing
Ethical Dilemmas
Generally
Acceptable
Be honest
Ethical Values
Problems in for Dilemmas

Business Respect others


Rights

Do your
duty/act
Responsibly
Analyzing
Ethical
Problems in
Business
Analyzing Ethical Plat
Problems in Business
o
Virtue Ethics: Pursuing a Good
Life

The ancient Greek philosophers


specially Plato and Aristotle
developed the first Ethical theory,
which was totally based on Values
and Personal Characters . Aristo
tle
Analyzing Ethical
Problems in Business
Virtue Ethics: It focuses on
character traits that a good
person should possess.

Why Character Traits?

Because according to the Greek


Philosophers that traits create
the moral values in a person
and that Values direct the
person towards good behavior.
Analyzing
Ethical
Problems in
Business
Limitation in Virtue Ethics:

1. List of traits can be incomplete.


Analyzing
2. Dose these traits are sufficient to solve the complex
Ethical ethical dilemmas found in global Business.
Problems in
Business
Utility: Comparing
Benefits And Costs
Utilitarian Reasoning:
Analyzing the utility or overall amount
of good that can be
Ethical produced by an action or a
decision.
Problems in
Business
Cost & Benefit Analysis:
the action will be measured
on cost and benefit. If cost
is high the action is
Unethical, If benefit is high
than action will be
considered ethical.
Analyzing Ethical Problems
in Business
Limitations In Utilitarian Reasoning:

1. (1) This concept is unable to measure some


Important things.
1. (1) Worth of human life.
2. (2) Employee morale.
3. (3) Employee psychological satisfaction.
(2) Another limitation is majority may override
the rights of minority.
Rights: Determining and
Protecting Entitlements
Human Rights: A right means that a person or group
is entitled to something or is entitled to be treated in
a certain way.
Analyzing
Ethical Basic
Problems in Right

Business Right to
Life
Safety
Free
Speech
Freedom
Being
Informed
Due
Process
Property
Analyzing Ethical
Problems in Business
Limitations in rights
approach:

1. (1) Using this approach in Ethics it


is very difficult to balance the
conflicting rights.
Justices: Is it Fair

Analyzing Definition: Justices or


Ethical fairness, exists when
benefit and burdens are
Problems in distributed equitably and
Business according to some
accepted rule.
Corporate culture
A blend of ideas, customs, traditional practices,
company values, and shared meanings that help define
Corporate normal behavior for everyone who works in a company

Culture Ethical climate


and The unspoken understanding among employees of
what is and is not acceptable behavior
Ethical Multiple climates (or sublimates) can exist within one
Climates organization
The
Component
s
of Ethical
Climates
Business operations can be very specialized, leading
Business to ethical challenges related to those functional areas
finance, marketing, accounting and information
Ethics technology.
across Professional ethical standards may conflict with the
ethical standards within the organization.
Organization
al Functions Professional associations may have specific ethical
standards that apply to that function.
Financial record for public held companies
are required to certified accounting firm.
Honesty, integrity and accuracy are absolute
requirements without it can be devastating
Accounting for organizations.
Ethics Michael Woodford president of Japanese
camera maker Olympus .Three chief executive
spent $2 billion to hide corporate loss using
complex web offshore companies in the
Cayman islands and British island
Financial department are responsible for firms assets
management and raising capital. For example: issue
stocks and bonds.
Swiss bank(rouge trading)
$2 million in loss
Financial MFGlobals(missing client money)
Ethics $900 millionrevised $1.2 billion
Fined $31million by UKS financial services authority
made error in traders activities.
Advertising, distributing and selling product or service

Functional area is directly interact with customers

Marketing It emphasizes honesty and fairness in advertising.


Ethics Common issues found in pharmaceutical products as
GlaxoSmithKline found guilty of $3 billion for illegally
marketing three different drugs and withholding safety
data from US FDA(Food And Drugs Administration)
Examples of business professional associations and
their codes:

American Institute of Certified Public Accountants

Profession (AICPA) Code of Professional Conduct


Chartered Financial Analyst (CFA), CFA Institute Code
al Codes of Ethics and Standards of Professional Conduct
of Conduct American Marketing Association (AMA) Code of Ethics

Association for Computing Machinery (ACM) Code of


Ethics and Professional Conduct
To improve the quality of a companys ethical
performance you have to change the culture so that
ethics is part of everyday decision-making
Building
Ethics To do so means institutionalizing ethics or building
Safeguard ethics safeguards in to everyday routines

into the
Company A recent survey of ethics safeguards or programs of
major corporations companies is shown on next slide

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