Understanding business 10th chapter 4b demanding ethical and socially responsible behavior

Demanding Ethical and Socially Responsible Behavior Copyright © 2010 by the McGraw-Hill Companies, Inc.. • Integrity-Based Ethics Code -- Define the organization’s guiding values, creat

Demanding Ethical and Socially Responsible

Behavior

Copyright © 2010 by the McGraw-Hill Companies, Inc All rights reserved McGraw-Hill/Irwin

&

Social Responsibility

4-3

• Ethics The standards of moral behavior

Behaviors that are accepted by society as right

versus wrong.

WHAT are ETHICS?

Doing What Is Right…

As You Know It To Be Right.

4-5

Ethics

of Us

4-7

Ethical Dilemma

A situation requiring a choice between equally undesirable alternatives.

FACING ETHICAL DILEMMAS

LG2

4-10

Ethics Begins

with Each of Us

• Plagiarizing from Internet

materials is the most common form of

cheating in schools today

ETHICS and YOU

• Studies found a strong

relationship between academic dishonesty and dishonesty at work

• Trust between workers and

managers must be based on

fairness, honesty, openness

and moral integrity

• Leadership can help instill

corporate values in

employees

E

T H I C S

S T A R T

a t

t h e

T O P

4-12

• An increasing number of companies have

adopted written codes of ethics

ETHICS CODES

Texas Instruments

The TI Ethics Quick Test

- Is the action legal?

- Does it comply with our values?

- If you do it, will you feel bad?

- How will it look in the newspaper?

- If you know it's wrong, don't do it!

- If you're not sure, ask.

- Keep asking until you get an answer.

For copies of the card or further information, contact the TI Ethics Office at 1-800-33-ETHIC

(This information is provided to TI employees on a business-card size mini- pamphlet to carry with them.)

• Compliance-Based Ethics Code Emphasize preventing unlawful behavior by increasing control

and by penalizing wrongdoers.

• Integrity-Based Ethics Code Define the

organization’s guiding values, create an environment that supports ethically sound behavior and stress a

shared accountability among employees.

ETHICS CODES

1 Top management must adopt and unconditionally support an explicit corporate code of conduct.

2 Employees must understand that senior

management expects all employees to act

4 An ethics office must be set up with which

employees can communicate anonymously

Whistleblowers People who report illegal or

unethical behavior.

HOW to IMPROVE AMERICA’S

BUSINESS ETHICS, cont.

5 Involve outsiders such as

suppliers, subcontractors,

distributors and customers

6 The ethics code must be

enforced

*

Source: James Gehrke, Magnify Leadership & Development, November 2008.

1 Managers must communicate the organization’s

vision on ethical behavior

2 Organizations must have a code of ethics

3 Policies have to be enforced regarding ethical

4-18

*

5 Discussions of ethics must be included in the

decision-making process

6 Accountability must be taken seriously at all

levels in the organization

7 Organizations must act fast when a crisis occurs

8 Employees must know they have to defend and

maintain the company’s reputation

HOW to PREVENT UNETHICAL

Setting Corporate Ethical Standards

Social Responsibility

Social Responsibility

Social responsibility is

management’s obligation to

make choices and take actions

and interests of society as well

as to those of the

organization .

*Corporate

Social Responsibility

• Corporate Social Responsibility (CSR) The

concern businesses have for the welfare of society.

to integrity, fairness, and

respect

businesses owe their existence

to the societies they serve and

cannot exist in societies that

fail

CORPORATE SOCIAL

4-22

• Corporate Responsibility Includes everything from hiring minority workers to making safe products, minimizing pollution, using energy wisely, and

providing a safe work environment.

• Corporate Policy The position a firm takes on

social and political issues.

• Corporate Philanthropy Includes charitable

donations.

CORPORATE RESPONSIBILITY

and POLICY

• Xerox offers a Social Service Leave program.

strengthen homeland security by helping in their community

they would take a lower salary to work for a

socially responsible company

POSTIVE IMPACTS

of COMPANIES

4-24

HELPING HANDS – Most Generous Celebrities

Taylor Swift Nashville Symphony and Centrepoint homeless.

One Direction Helping African and UK’s living in severe poverty or injustice, & cancer research

Beyonce London’s charity concert for women’s rights: ‘Chime For Change’

Paul Walker Founded: Reach Out WorldWide (ROWW) Macklemore & Ryan Lewis Adopting a culture of acceptance

Sandra Bullock Mothers Who Make a Difference Award and People’s Choice Award: “Favorite Humanitarian” for ongoing

efforts in disaster relief & education.

Kerry Washington President Obama’s President’s Committee on the Arts & Humanities, advocating nationally for arts education in

low-income areas Ian Somerhadler collaborate with people and projects to positively impact Ian Somerhalder Foundation “to empower, educate, and

the planet and its creatures.”

Source: Forbes, June 6, 2011.

GENEROUS GUYS

World’s Biggest Givers

Bill Gates $28B Malaria, public health, education

Warren Buffett $8.3B Gates Foundation

George Soros $8B Human rights, democracy

Carlos Slim $4B Education, healthcare

Eli Broad $2.6B Education, arts

James Stowers $2B Genetic research

Michael Bloomberg $1.8B Antismoking, transportation

Li Ka-Shing $1.6B Education, healthcare

4-26

RESPONSIBILITY to CONSUMERS

• The Right to Safety

• The Right to be Informed

• The Right to Choose

• The Right to be Heard

PRESIDENT KENNEDY’S BASIC

RIGHTS of CONSUMERS

4-28

Responsibilities to Customers

 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.

 www.cpsc.gov

RESPONSIBILITY TO INVESTORS

4-32

• Insider Trading Insiders using

private company information to

further their own fortunes or those

of their family and friends.

• Unethical behavior does

financial damage to a company

and investors are cheated.

RESPONSIBILITY TO INVESTORS

RESPONSIBILITY to

EMPLOYEES

4-34

• Create jobs and provide a chance for upward

mobility.

• Treat employees with respect.

• Offer salaries and benefits that help employees reach their personal goals.

RESPONSIBILITY to EMPLOYEES

Source: Fortune, www.fortune.com , March 21, 2011.

RESPONSIBILITY to the

ENVIRONMENT

• Environmental efforts may increase costs but

can offer good opportunities

energy-efficiency industries account for 8.5 million U.S jobs

• Social Audit A systematic evaluation of an

organization’s progress toward implementing

socially responsible and responsive programs.

1) Socially conscious investors

2) Socially conscious research organizations

3) Environmentalists

4) Union officials

5) Customers

SOCIAL AUDITING

• Many businesses want socially responsible

behavior from their international suppliers

criminalized the act of paying foreign

businesses or government leaders in order to

get business

States signed the Inter-American Convention

Against Corruption

INTERNATIONAL ETHICS

4-44

Social Responsibility

Bottom Line:

Should Companies Have?

Companies are citizens in the communities in which they reside,

therefore, They do have a Social Responsibility!

The Majority View

Milton Friedman -

– Argues that firms need to focus on making a

profit, not on social responsibility, and

– Claims that firms that focus on social

responsibility get distracted from their real

purpose

An Economist’s View