BUSINESS ETHICS AND SOCIAL RESPONSIBILITIES OF BUSINESS

BUSINESS ETHICS/CORPORATE ETHICS Business Ethics otherwise known as Corporate Ethics is a form of applied ethics or professional ethics that examines ethical principles and moral or ethical problems that arise in a business environment. Business ethics has both normative and descriptive dimensions. As a corporate practice and a career specialization, the field is primarily normative. Academics attempting to understand business behaviour employ descriptive methods. The arrange and quantity of business ethical issues reflects the interaction of profit-maximizing behaviour with non-economic concerns. Interest in business ethics accelerated dramatically during the 1980s and 1990s, both within major corporations and within academia.

ETHICAL ISSUES IN BUSINESS Adulteration in edible items Product safety/Unequal standards Product storage and logistics irresponsibility Customers as quantity of consumption Surrogate advertising/Treacherous campaigns Finished accountability after selling the product Less expenditure on social causes/wellbeing Environmental issues

COMMON ETHICAL CHALLENGES Telling the truth & adhering to deeply felt ethical principles in business decisions Situation in which a business decision may be influenced for personal gain Conflict of Interest Honesty & Integrity Ethical Challenges Business people expect employees to be loyal & truthful, but ethical conflicts may arise Whistle Blowing Loyalty vs Truth Employee’s disclosure of illegal, immoral or unethical practices in the organisation

HOW ORGANISATIONS SHAPE ETHICAL CONDUCT Ethical Leadership Ethical Action Ethical Education Ethical Awareness Structure of an Ethical Environment

Ethical Awareness: Conduct of Conduct – Formal statement that defines how the organisation expects & requires employees to resolve ethical questions. Ethical Education: Codes of conduct cannot detail a solution for every ethical situation, so corporations provide training in ethical reasoning. Ethical Action: Helping employees recognize & reason through ethical problems & turning them into ethical actions. Ethical Leadership: Executives must demonstrate their ethical behaviour in actions.

AREAS OF RESPONSIBILITY Business’s Social Responsibility To the General Public To Customers To Investors & the Financial Community To Employees

RESPONSIBILITIES TO THE GENERAL PUBLIC Public Health Issues: What to do about inherently dangerous products such as alcohol, tobacco, vaccines & steroids. Protecting the Environment: Using resources efficiently, minimizing pollution. Recycling: Reprocessing used materials for reuse. Developing the Quality of the Workforce: Enhancing quality of the overall workforce through education & diversity initiatives. Corporate Philanthropy: Cash contributions, donations of equipment and products & supporting the volunteer efforts of company employees.

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

RESPONSIBILITIES TO EMPLOYEES Workplace Safety: Monitored by Occupational Safety & Health Administration. Quality-of-Life Issues: Balancing work and family through flexible work schedules, subsidized child care, and regulation such as the Family and Medical Leave Act of 1993. Ensuring Equal Opportunity on the Job: Providing equal opportunities to all employees without discrimination; many aspects regulated by law. Age Discrimination: Age Discrimination in Employment Act of 1968 protects workers age 40 or older. Sexual Harassment & Sexism: Avoiding unwelcome actions of a sexual nature; equal pay for equal work without regard to gender.

RESPONSIBILITIES TO INVESTORS Obligation to make profits for shareholders. Expectation of ethical and moral behaviour. Investors protected by regulation by the Securities and Exchange Commission and state regulations.