Ethics & Social Responsibility Contemporary Business - Chapter 2 Pages 31-56

What are they? Ethics – standards of conduct and moral values - doing what is right Social Responsibility – consideration of society’s well-being and consumer satisfaction, in addition to profits Businesses need to find the balance between doing what is right and doing what is profitable

What’s the problem? Deciding what is right and what is wrong does not always involve a clear-cut choice Businesses have responsibilities to investors, employees, customers, and society, their stakeholders. Society has greater expectation of successful businesses

What’s the problem? Businesses need to make it clear within the organization what is expected Read Johnsons & Johnson Credo on pg 33

What are some of the issues? Individuals putting their own interests ahead of the organization Managers lying to employees Employees misreporting hours worked Employees abusing the Internet Company safety violations CareerKickstart – How to Avoid Ethical Issues at Work Page 36

Common Ethical Challenges Accepting gifts or kick-backs Representing both sides on an issue Need to avoid or disclose Doing what you say you will do & accepting responsibility for mistakes Misrepresentation Stealing What to do when you discover a problem – who do you tell? Against company procedures or even illegal? Sometimes the truth may hurt the company and/or others

A strong ethics culture reduces the risk of unethical behavior What can be done? Some businesses may choose not to work in certain countries All businesses need to know what is happening within their company, it’s their responsibility A strong ethics culture reduces the risk of unethical behavior

Code of Conduct A formal statement that defines how the organization expects employees to resolve ethical issues Sometimes a part of their mission statement or part of their manuals. It is in Johnson & Johnson’s Credo that we read earlier.

Code of Conduct Poor Ethics has Consequences Stakeholders Suffer Do you think ethics can be taught? Read Ethical Action pg. 40-41 Poor Ethics has Consequences Stakeholders Suffer

Back to Social Responsibility – What is it? Social Responsibility – consideration of society’s well-being and consumer satisfaction, in addition to profits Society has greater expectation of successful businesses

Huh? Historically, a business was measured by providing jobs and contributing to the economy. Decent wages and benefits, profits to investors, and quality products were sufficient. More is expected now.

What are the Business’ Social Responsibilities? Employment Opportunities Quality of Life Respects Diversity Safe, Healthy Workplace See Laws on page 52 Profitable business Accurate Financial Records Pays employees well Job creation High Quality Products – product liability, healthy foods Honest Labelling and Advertising Response to Complaints Environmental Concerns – recycling, pollution, going green Philanthropy - charitable giving, health fair Developing a Quality Workforce To the General Public To Customers To Employees To Investors and the Financial Community

Ethics & Social Responsibility Assignment Review Questions - Page 57 #4, #8, and #9 For each, type the question number, the question, and the answer. Projects and Teamwork Applications – Page 57 #2 (individually or with a partner)