©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 4 4

4 4 Business Ethics and Social Responsibility: Doing Well By Doing Good 2 LO 1What is ethics? What are the universal ethics standards? LO 2What are business ethics? What is an ethical dilemma? LO 3How does ethics relate to the individual and the organization? LO 4What is social responsibility and how does it impact stakeholder groups? LO 5What is the role of social responsibility in the global arena? LO 6How do companies evaluate their efforts to be socially responsible?

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Ethics & Social Responsibility: A Close Relationship 3 ETHICS Beliefs about right and wrong SOCIAL RESPONSIBILITY The obligation of a business to contribute to society

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Universal Ethical Standards 4

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Business Ethics: Not an Oxymoron 5 Ethical Dilemma Negative consequences Two unfavorable options Ethical Lapse Clear misconduct Most challenging business decisions seem to arise when values are in conflict. Business Ethics is the application of right and wrong in the workplace.

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Ethics: Multiple Touchpoints Individuals must make their own ethical choices BUT The organization can have a significant influence on decisions 6

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Ethics and the Individual: The Power of One 7 Key Principles of Decisions: 1.Do you fully understand each dimension 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 as a “gut feel” level? 5.Could you defend your decision on the nightly TV news? 6.Have you considered and reconsidered your response to each question?

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Creating and Maintaining and Ethical Organization 8 Role of Top Management the tone from the top must be reinforced by behavior Role of Top Management the tone from the top must be reinforced by behavior Organizational Culture strongest variable on ethical conduct Organizational Culture strongest variable on ethical conduct

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Bringing Code of Ethics to Life 9 Code of Ethics is a written document providing direction for employees to make ethical decisions. 1. Executive Buy-in 2. Clear expectations 3. Integrated approach 4. Global and local 5. Whistleblower support 6. Reporting and Enforcement

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Defining Social Responsibility Core stakeholder groups include employees, customers, investors, and community. 10 Social Responsibility is the obligation of a business to contribute to society.

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Stakeholder Approach 11 EMPLOYEES INVESTORS COMMUNITY ENVIRONMENT CUSTOMERS Creating Jobs that Work Sustainable Development Value, Honesty and Communication Fair Stewardship and Full Disclosure Business and the Greater Good

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Spectrum of Social Responsibility 12

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Stakeholders 13 Stakeholders are any groups that have a stake or a personal interest in the performance and actions of an organization. Stakeholders are any groups that have a stake or a personal interest in the performance and actions of an organization.

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Meet Legal Standards Workplace Safety Minimum Wage/Overtime Requirements Protection from Sexual Harassment Provide Work/Life Balance  Family and Medical Leave 14 Responsibility to Employees: Creating Jobs that Work

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Right to Be Safe The Right to Be Informed The Right to Choose The Right to be Heard The Right to Be Safe The Right to Be Informed The Right to Choose The Right to be Heard Planned Obsolescence – Deliberately designing products to fail in order to shorten the time between consumer repurchases 15 Responsibility to Customers: Value, Honesty, and Communication Consumerism: a social movement suggests that consumer rights should be the starting point. President Kennedy defined these rights.

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Legal Requirements Sarbanes-Oxley Responsible use of Corporate Dollars Honesty Is Optimism or Pessimism Socially Responsible? 16 Responsibility to Investors: Fair Stewardship and Full Disclosure

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Corporate Philanthropy - business donations to nonprofit groups, including both money and time. Corporate Responsibility - 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 17 Responsibility to the Community: Business and the Greater Good

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Sustainable Development Doing business to meet the needs of this generation without harming the ability of future generations Carbon Footprint Amount of harmful greenhouse gases a firm emits Green Marketing Marketing environmental products and practices for competitive advantage Responsibility to the Environment 18

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Ethics and Social Responsibility in the Global Arena: A House of Mirrors? Corruption is part of the culture in many countries Bribes or Gifts Labor issues in host countries can be complicated Living Wage Child Labor 19

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Ethics and Social Responsibility: Who is Minding the Store? 20 SOCIAL AUDIT A systematic evaluation of how well a firm is meeting its ethics and social responsibility objectives

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 4 4 Looking Back What is ethics? What are the universal ethics standards? What are business ethics? What is an ethical dilemma? How does ethics relate to the individual and the organization? What is social responsibility and how does it impact stakeholder groups? What is the role of social responsibility in the global arena? How do companies evaluate their efforts to be socially responsible? 21