On a piece of paper… In what ways do large corporations justify an apparent conflict of interest between what it produces and its socially responsible actions. Example – An oil company that produces pollutants building parks to protect an endangered species.

Goals Chapter 4.2 Explain how corporate responsibility has changed since the 19 th century Discuss how corporations demonstrate their sense of social responsibility

The Main Idea – Chapter 4.2 This chapter covers the role of ethics and social responsibility in the business world Describes how companies have changed their attitude toward social responsibility and how some demonstrate it.

Changing Views of Social Responsibility Businesses’ concept of their role in society has changed dramatically over the past century Views towards SR evolved through three distinct schools of thought: Profit Maximization Trusteeship management Social Involvement… Social Responsibility The obligation that individuals or businesses have to help solve social problems.

Profit Maximization In the 19 th and early 20 th centuries, business owners believed that their role was simply to make as much money as possible Didn’t worry about anything else!

Trusteeship Management 1920s and 30s philosophy started changing towards businesses’ role Trusteeship Management – Recognized that owners of businesses had obligations to do more than just earn profits. Had obligations to their employees, customers, and their creditors. View stayed until the 1960s

Social Involvement 1960’s people began to believe that corps. should use their influence and money to address social problems Should help with poverty, crime, environmental destruction and illiteracy LL Bean Stakeholders A company’s employees, customers, suppliers, and the community.

Click on “LL Bean and the Environment” on my wiki LL Bean and the Environment Read and summarize their attitude towards social responsibility

Discuss… In what ways is our community a stakeholder in the businesses in the area? –Greatly affected by environmental practices –Benefit from money/donations for promoting literacy, education, scholarships etc. –Taxes

Measuring Social Responsibility pg. 99 To measure how socially responsible a company is, some managers perform social audits. Social audit A review of a business’s social responsiveness

One of your most important clients is late paying your recent invoice because of a computer problem. Since your client has not paid you, you cannot pay all of your bills. However, you could get by if you did not pay your rent for the month. Decision Making What are some ways of handling this situation so that you maintain relationships with your clients, landlord, and other vendors while acting ethically?

Answer Answers might suggest that being honest with everyone up front will help you maintain good relationships. It would also be appropriate to let your client know that their late payment is affecting you.