Ch. 4: Business Ethics and Social Responsibility

Learning Objectives Analyze the importance of business ethics and social responsibility. Identify the responsibilities of business to various parties. Describe the responses of business to environmental issues.

Business ethics The values of what should be done and what should not be done from the business point of view.

Ethical issues for business Product safety standards Advertising content Working environment Unauthorized payments Employee’s privacy Environmental issues

Typical Ethical Issues faced by Managers Conflict between personal values and organizational goals Conflict between organization goals and social values Hazardous but popular products Exploitation of customers, suppliers and employees

Importance of business ethics and social responsibility Guide the behaviour of business Safeguard the interests of individuals in society

Impact of business ethics and social responsibility Put additional constraints on business operations Increase operating costs Affect business image and reputation

Social responsibilities of Management towards different Groups Internal –Shareholders: Reasonable return on investment; honest and efficient management of resources; accountable of performance; Provide true and sufficient information on organization performance and financial position

Internal –Employees: Fair wage Job security Good working conditions Training Welfare No discrimination Communication Cooperation with trade union Enhance quality of life

External –Customers Merchantable quality goods or services Safe Conform to specifications Provide true and adequate information Reasonable price Pass proportion of savings to customers No artificial shortage

External –Suppliers No miuse of buying power Abide by agreement Confidentiality of information –Competitions No disparaging competitors Respect confidentiality of trade secrets –Government Conform with legislation and taxation requirements Cooperate to identify and prevent health hazards in products

External –Government Conform with legislation and taxation requirements Cooperate to identify and prevent health hazards in products –Community Uphold social and ethical values Good relations with public Retrain from causing damage or nuisance to property and persons Respond constructively to complaints

Right of consumers Right to safety Right to be informed Right to be heard Right to choose Responsibilities to customers

Reasons for the deterioration of the physical environment Increasing concentrations of population Development of high technology Lack of enough environmental legislation Poor enforcement of legislation concerning pollution Negligence of environmental issues in the past People’s selfishness Lack of co-operation of countries in the world

Types of pollution 1.Air pollution 2.Water pollution 3.Solid waste pollution 4.Noise pollution

Main pieces of legislation concerning the environment in Hong Kong Waste Disposal Ordinance Water Pollution Control Ordinance Air Pollution Control Ordinance Noise Control Ordinance Ozone Layer Protection Ordinance Dumping at Sea Ordinacne