Business Copyright 2005 Prentice- Hall, Inc. 3-1

1-2 Chapter 3 Conducting Business Ethically and Responsibly

Business Copyright 2005 Prentice- Hall, Inc. 3-3 Chapter Outline Ethics In The Workplace Ethics In The Workplace Social Responsibility Social Responsibility Areas of Social Responsibility Areas of Social Responsibility Implementing Social Responsibility Programs Implementing Social Responsibility Programs

Business Copyright 2005 Prentice- Hall, Inc. 3-4 Ethics In The Workplace Beliefs in Right/Wrong & Good/Bad ActionsBeliefs in Right/Wrong & Good/Bad Actions Ethical- Conforms To Social NormsEthical- Conforms To Social Norms Unethical BehaviorUnethical Behavior Business EthicsBusiness Ethics

Business Copyright 2005 Prentice- Hall, Inc. 3-5 Individual Ethics Ambiguity/Law/Real WorldAmbiguity/Law/Real World Sources of Individual Values & CodesSources of Individual Values & Codes –Parents –Peers –Experience Personal PrioritiesPersonal Priorities –Financial Gain –Family/Friends

Business Copyright 2005 Prentice- Hall, Inc. 3-6 Business Ethics ManagerialManagerial Behavior TowardBehavior Toward –Employees –Organization –Others

Business Copyright 2005 Prentice- Hall, Inc. 3-7 Assessing Ethical Behavior Smooth? 1)Clear-Cut Facts? 2)Agreed- Upon Moral Values?

Business Copyright 2005 Prentice- Hall, Inc. 3-8 Ethical Norms  Utility  Rights  Justice  Caring

Business Copyright 2005 Prentice- Hall, Inc. 3-9 Company Practices & Business Ethics Written Codes- United Technologies >About UTC >UTC Commitments >Social Responsibility Written Codes- United Technologies >About UTC >UTC Commitments >Social ResponsibilityUnited TechnologiesUnited Technologies Implement Codes Implement Codes

Business Copyright 2005 Prentice- Hall, Inc Model Of Ethical Judgment Making

Business Copyright 2005 Prentice- Hall, Inc Core Principles/Values

Business Copyright 2005 Prentice- Hall, Inc Social Responsibility Business Commitments To StakeholdersBusiness Commitments To Stakeholders Stakeholders Affected:Stakeholders Affected: –Groups –Individuals –Organizations

Business Copyright 2005 Prentice- Hall, Inc Stakeholders

Business Copyright 2005 Prentice- Hall, Inc Evolving Social Consciousness 1930s – 1940s 1960s – 1970s 1980s – 1990s John D. Rockefeller J. P. Morgan Cornelius Vanderbilt Vietnam War Social Activism Laissez-Faire Corporate Scandals Increased Gov’t Control Tighter Standards

Business Copyright 2005 Prentice- Hall, Inc Contributions By Source (2003) Source: Giving USA Foundation™- AAFRC Trust for Philanthropy/Giving USA 2004 In $ Billions Total = $241

Business Copyright 2005 Prentice- Hall, Inc Contributions By Type Of Recipient (2003) Source: Giving USA Foundation™- AAFRC Trust for Philanthropy/Giving USA 2004 In $ Billions Total = $241

Business Copyright 2005 Prentice- Hall, Inc Most Admired Companies (2003) RankCompanyRankCompany 1Wal-Mart6BerkshireHathaway 2 General Electric 7 Proctor & Gamble 3Microsoft8IBM 4 Dell Computer 9Coca-Cola 5 Johnson & Johnson 10FedEx Source: Fortune

Business Copyright 2005 Prentice- Hall, Inc Top Donations (2003) DonorSourceAmount (In $ Millions) Recipient Joan B. Kroc McDonald’s$1, Organizations Michael & Susan Dell Dell Computer $673.7 Michael & Susan Dell Foundation Eli & Edythe Broad AIG Retirement Services $409 Broad Foundation & Broad Art Foundation John A. Jackson Retired Oil & Gas Exec. $247 Univ. of Texas at Austin Frank & Jane Batten Retired CEO Landmark Communications $141.28Organizations Source: “The 2003 Slate 60: Top Donations”, complied by the Chronicle of Philanthropy, Feb. 16, 2004.

Business Copyright 2005 Prentice- Hall, Inc Social Responsibility - Environment PollutionPollution –Air –Water Toxic WasteToxic Waste RecyclingRecycling

Business Copyright 2005 Prentice- Hall, Inc Air Pollution- Then, Now, & Future

Business Copyright 2005 Prentice- Hall, Inc Consumer Rights Safe ProductsSafe Products Informed About ProductInformed About Product To Be HeardTo Be Heard Choose What To BuyChoose What To Buy To Be EducatedTo Be Educated Courteous ServiceCourteous Service

Business Copyright 2005 Prentice- Hall, Inc Unfair Pricing CollusionCollusion GougingGouging

Business Copyright 2005 Prentice- Hall, Inc Advertising Ethics Food Product LabelingFood Product Labeling Misleading Product ClaimsMisleading Product Claims DeceptiveDeceptive Morally ObjectionableMorally Objectionable

Business Copyright 2005 Prentice- Hall, Inc Employer Commitments To Employee Job SkillsJob Skills Respect & CompassionRespect & Compassion –Nondiscrimination –Equal Opportunities –Physically & Socially Safe Workplace

Business Copyright 2005 Prentice- Hall, Inc Whistleblowers False Claims Act (1863)False Claims Act (1863) Qui Tam Provisions = 15-30% Reward For Government RecoveryQui Tam Provisions = 15-30% Reward For Government Recovery

Business Copyright 2005 Prentice- Hall, Inc Responsibility To Investors Improper Financial ManagementImproper Financial Management Check Kiting- Check 21Check Kiting- Check 21 Insider TradingInsider Trading Financial Misrepresentation- GAAPFinancial Misrepresentation- GAAP

Business Copyright 2005 Prentice- Hall, Inc Social Responsibility Approaches/Stances ObstructionistObstructionist DefensiveDefensive AccommodativeAccommodative ProactiveProactive Low Level High Level Obstructionist DefensiveAccommodativeProactive

Business Copyright 2005 Prentice- Hall, Inc Social Responsibility Auditing Success of Program Starts At TopStarts At Top Requires Management SupportRequires Management Support Single Manager In ChargeSingle Manager In Charge Conduct Social AuditsConduct Social Audits