BUSN 3rd kelly mcgowen chapter4

• How does ethics relate to the individual and the organization?. 4 Ethics & Social Responsibility: A Close Relationship ETHICS Beliefs about right and wrong SOCIAL RESPONSIBILITY The o

4

4 Responsibility:

Doing Well by Doing Good

• What is ethics? Business ethics?

• What are the universal ethical standards?

• What is an ethical dilemma?

• How does ethics relate to the individual and the

organization?

• What is social responsibility and its impact on

stakeholders?

4 Ethics & Social Responsibility:

A Close Relationship

ETHICS

Beliefs about right and wrong

SOCIAL RESPONSIBILITY

The obligation of a business

to contribute to society

4 Defining Ethics: Murkier Than You’d Think

4 Universal Ethical Standards

Developed by

Character Counts,

a nonpartisan organization of educators, community leaders,

and ethicists.

4 Business Ethics: Not an Oxymoron

to arise when values are

in conflict

Business Ethics – the

application of right and wrong in the workplace.

4 Ethics: Multiple Touchpoints

Individuals must make their own

ethical choices

BUT

The organization can have a significant

influence on decisions

4 Ethics and the Individual: The Power of One

Framework for Ethical Decisions:

1 Do you understand the

dimensions 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?

5 Could you defend your decision

on the nightly news?

4 Ethics and the Organization: It Takes a Village

• Ethical influence starts at the top.

• Actions matter more than words.

• The appearance of shaky ethics can be deeply

damaging

“CEOs in particular must communicate their personal commitment to high ethical standards and consistently drive the message down to

employees through their actions.”

4 Creating and Maintaining and Ethical Organization

4 Ethics at Work: How would you judge the actions of

these business leaders?

Stanley O’Neal began as Merrill Lynch began racking up losses

that led to its collapse, he announced his “retirement.”

Sanjay Kumar of Computer Associates was convicted of

massive accounting fraud in 2006.

Martha Stewart was convicted of obstructing justice in a $40,000

well timed stock sale.

Sherron Watkins, former vice president of Enron reported the accounting

Irregularities that led to the discovery of corporate fraud.

Whole Foods CEO, John Mackey posted thousands of comments on Yahoo Finance, hyping his company and attacking Wild Oats, which he was planning to purchase.

4 Capitalism with a Conscience

• The gains in wealth, healthcare, education,

and technology have not been evenly spread

• Half of the world’s population lives on less

than $2.00 per day

• 94% of the world’s earnings go to 40% of

the people

• Bill Gates has called for a new approach to

economics: creative capitalism

• Nobel Peace prize winner Muhammad

Yunus recognizes the power of business to

solve societal issues

4 Defining Social Responsibility:

Making the World a Better Place

Nearly 80% of Americans consider corporate citizenship when making investment and purchasing decisions.

Social Responsibility is the obligation of a

business to contribute to society.

4 The Spectrum of Social Responsibility

4 Social Responsibility at Work:

How would you judge the actions of these firms?

1 Clorox introduced a line of “99% natural cleaning” products

called Green Works The Sierra Club endorsed the product line

Clorox makes annual contributions to the Sierra Club

2 Tapping the potential of their fans, MTV has drawn millions of

young people to the polls for the 2008 presidential election

3 As obesity among kids grows, Kraft Foods pledged to stop

advertising unhealthy yet profitable foods

4 After receiving $45 billion in taxpayer bailout funds, Bank of

America sponsored a five-day carnival-like event outside the

2009 Super Bowl.

4 The Stakeholder Approach:

4 The Stakeholder Approach:

CONSUMERISM:

• The Right to Be Safe

• The Right to Be Informed

• The Right to Choose

• The Right to be Heard

4 Apple Angst

• Apple introduced the iPhone on

June 9, 2007 to rave reviews

despite $599 price tag

• Apple dropped the price to $200

to increase customers

• Customers were livid!

• CEO, Steve Jobs apologized and

gave customers $100 store credit

• Is Optimism or Pessimism Socially Responsible?

actions of the business rather than donations of

money and time

Cause-related Marketing –

partnerships between businesses

and nonprofit organizations,

designed to spike sales for the

company and raise money

for the nonprofit

Responsibility to Community:

Business and the Greater Good

Sustainable Development

Beyond federal, state and local laws: doing business to meet the needs of this generation without harming the ability of future generations

4 Ethics and Social Responsibility in the Global Arena:

A House of Mirrors?

Corruption is part of the

culture in many countries

4 Monitoring 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.

• What is ethics? Business ethics?

• What are the universal ethical standards?

• What is an ethical dilemma?

• How does ethics relate to the individual and the

organization?

• What is social responsibility and its impact on

stakeholders?