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©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated,
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4 LO1 What is ethics? What are the
universal ethics standards?
Business LO2 What are business ethics? What is
an ethical dilemma?
Ethics and LO3 How does ethics relate to the
Social LO4
individual and the organization?
What is social responsibility and
Responsibility: how does it impact stakeholder
groups?
Doing Well By Doing
LO5 What is the role of social
Good responsibility in the global arena?
LO6 How do companies evaluate their
efforts to be socially responsible?

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 Ethics & Social Responsibility:
A Close Relationship

SOCIAL
ETHICS
Beliefs about RESPONSIBILITY
right and wrong The obligation of a business
to contribute to society

3
©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or
posted to a publicly accessible website, in whole or in part.
 Universal Ethical Standards

4
©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or
posted to a publicly accessible website, in whole or in part.
 Business Ethics: Not an Oxymoron

Ethical Dilemma Most challenging

Negative consequences business decisions seem
to arise when values are
Two unfavorable options
in conflict.
Ethical Lapse Business Ethics is the
Clear misconduct application of right and
wrong in the workplace.

5
©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or
posted to a publicly accessible website, in whole or in part.
 Ethics: Multiple Touchpoints

Individuals must make

their own
ethical choices

BUT

The organization can have

a significant influence on
decisions
6
©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or
posted to a publicly accessible website, in whole or in part.
 Ethics and the Individual:
The Power of One
Key Principles of Decisions:
1. Do you fully understand each dimension of the problem?
2. Who would benefit? Who would suffer?
3. Are the alternative solutions legal? Are they fair?
4. Does your decision make you comfortable as a “gut feel”
level?
5. Could you defend your decision on the nightly TV news?
6. Have you considered and reconsidered your response to each
question?

7
©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or
posted to a publicly accessible website, in whole or in part.
 Creating and Maintaining and
Ethical Organization

Organizational
Culture
strongest variable on
ethical conduct Role of Top
Management
the tone from the top
must be reinforced
by behavior
8
©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or
posted to a publicly accessible website, in whole or in part.
 Bringing Code of Ethics to Life

1. Executive Buy-in Code of Ethics is a

written document
2. Clear expectations providing
direction for
3. Integrated approach employees to
make ethical
4. Global and local decisions.
5. Whistleblower support
6. Reporting and Enforcement

9
©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or
posted to a publicly accessible website, in whole or in part.
 Defining Social Responsibility

Social Responsibility is the obligation of a

business to contribute to society.

Core stakeholder groups include

employees, customers, investors, and
community.

10
©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or
posted to a publicly accessible website, in whole or in part.
 The Stakeholder Approach

EMPLOYEES Creating Jobs that Work

CUSTOMERS Value, Honesty and Communication

INVESTORS Fair Stewardship and Full Disclosure

COMMUNITY Business and the Greater Good

ENVIRONMENT Sustainable Development

11
©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or
posted to a publicly accessible website, in whole or in part.
 The Spectrum of Social Responsibility

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©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or
posted to a publicly accessible website, in whole or in part.
 Stakeholders

Stakeholders are any groups that have a stake

or a personal interest in the performance and
actions of an organization.

13
©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or
posted to a publicly accessible website, in whole or in part.
 Responsibility to Employees:
Creating Jobs that Work

• Meet Legal Standards

• Workplace Safety
• Minimum Wage/Overtime
Requirements
• Protection from Sexual Harassment
• Provide Work/Life Balance
 Family and Medical Leave

14
©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or
posted to a publicly accessible website, in whole or in part.
 Responsibility to Customers: Value,
Honesty, and Communication

Consumerism: a social  The Right to Be Safe

movement suggests that
 The Right to Be Informed
consumer rights should
be the starting point.  The Right to Choose
President Kennedy
defined these rights.  The Right to be Heard

Planned Obsolescence –
Deliberately designing products to fail in order to shorten
the time between consumer repurchases
15
©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or
posted to a publicly accessible website, in whole or in part.
 Responsibility to Investors: Fair
Stewardship and Full Disclosure

• Legal Requirements
Sarbanes-Oxley
• Responsible use of
Corporate Dollars
Honesty
• Is Optimism or
Pessimism Socially
Responsible?
16
©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or
posted to a publicly accessible website, in whole or in part.
 Responsibility to the Community:
Business and the Greater Good
Cause-related Marketing –
partnerships between businesses
and nonprofit organizations,
designed to spike sales for the
company and raise money Corporate
for the nonprofit Responsibility -
actions of the business rather
Corporate Philanthropy - than donations of money and
business donations to time
nonprofit groups, including
both money and time.

17
©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or
posted to a publicly accessible website, in whole or in part.
 Responsibility to the Environment

Sustainable Development
Doing business to meet the needs of
this generation without harming
the ability of future generations
Carbon Footprint
Amount of harmful greenhouse
gases a firm emits
Green Marketing
Marketing environmental products
and practices for competitive
advantage
18
©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or
posted to a publicly accessible website, in whole or in part.
 Ethics and Social Responsibility in the
Global Arena: A House of Mirrors?

Corruption is part of the culture in

many countries
 Bribes or Gifts

Labor issues in host countries can

be complicated
 Living Wage
 Child Labor

19
©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or
posted to a publicly accessible website, in whole or in part.
 Ethics and Social Responsibility:
Who is Minding the Store?

SOCIAL AUDIT
A systematic evaluation of
how well a firm is meeting its
ethics and social
responsibility objectives

20
©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or
posted to a publicly accessible website, in whole or in part.
4
Looking Back
• What is ethics? What are the universal ethics standards?
• What are business ethics? What is an ethical dilemma?
• How does ethics relate to the individual and the organization?
• What is social responsibility and how does it impact stakeholder groups?
• What is the role of social responsibility in the global arena?
• How do companies evaluate their efforts to be socially responsible?
21
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