INCORPORATING ETHICS AND SOCIAL RESPONSIBILITY CHAPTER ELEVEN

Ethics Definition: The moral code by which we live and conduct business. Source: Derives from the cultural, social, political, and ethnic norms with which we are raised as children.

Ethics (continued) Conflicts of interest: When a person’s private or personal interests clash with professional obligations. What an entrepreneur does today out of desperation will follow him for the rest of his business career.

Ethics (continued) Stakeholder pressure: All stakeholders want what is owed them when it is owed them. Pushing the legal limit: Entrepreneurs who regularly play too close to the edge of legality eventually get caught and the price is often their businesses and their reputations.

Ethics (continued) Learning from real-life dilemmas: There is no better way to understand the role of ethics in any business than to encounter real-world dilemmas and determine how they might be resolved. The importance of developing a code of ethics: When a code of ethics is spelled out and written down, people in the organization take it more seriously.

The Process of Developing a Code of Ethics Guidelines from The Josephson Institute of Ethics: http://www.josephsoninstitute.org/MED/MED-2sixpillars.htm Trustworthiness Respect Responsibility Caring Justice and fairness Civic virtue and citizenship

Questions to Assist With Ethical Decision-making Will the actions taken result in the “greatest good for all parties involved?” Will the actions respect the rights of all parties? Are the actions just? Will anyone be hurt by the actions? Would I be proud if my actions were they announced in my local newspaper?

Ethical Conflicts How to cope with the inevitable conflicts Be aware of your own explicit and implicit ethical beliefs Be aware of the ethical beliefs of your team and investors Be aware of the ethical beliefs of the milieu within which the company competes for survival

Vision and Values Core Values: The fundamental beliefs that a company holds about what is important in business and in life in general. Based on the founder’s personal values and beliefs They tell the world who the company is and what it stands for.

Core Values Nortel Networks Customers are the driving force People are our strength Quality is in every aspect Innovation fuels our future Accountability brings clarity INTEGRITY underpins everything

Hallmarks of an Effective Integrity Strategy Features of successful integrity strategies The guiding values and commitments make sense and are clearly communicated Company leaders are personally committed, credible, and willing to take action on the values they espouse The values are integrated into the channels of management decision making and are reflected in the organizations critical activities

Hallmarks of an Effective Integrity Strategy The company’s systems and structures support and reinforce its values Managers throughout the company have the decision-making skills, knowledge, and competencies needed to make ethically sound decisions on a day-to-day basis

Social Responsibility Definition: “Social responsibility is operating a business in a manner that meets or exceeds the ethical, legal, commercial and public expectations that society has of business.” * *Business for Social Responsibility http://www.bsr.org

Social Responsibility (continued) Effective ways to become socially responsible: Donate products or services Get other companies involved Offer the company’s expertise free of charge Contribute to the community