Diamond: Fashion Retailing: A Multi-Channel Approach. (C) 2006 Pearson Education, Upper Saddle River, NJ All Rights Reserved Chapter 6: Ethics and Social Responsibility

Diamond: Fashion Retailing: A Multi-Channel Approach. (C) 2006 Pearson Education, Upper Saddle River, NJ All Rights Reserved Is it Ethical to: Conduct personal business on the job? Call in sick when you are not ill? Arrive for work late and/or leave early? Misrepresent merchandise to customers?

Diamond: Fashion Retailing: A Multi-Channel Approach. (C) 2006 Pearson Education, Upper Saddle River, NJ All Rights Reserved Martha Stewart How will Martha Stewart be rewarded by society for her behavior?

Diamond: Fashion Retailing: A Multi-Channel Approach. (C) 2006 Pearson Education, Upper Saddle River, NJ All Rights Reserved An Employment Issue: Will employees who are prepared to become part of a company be concerned that their new employer will be charged with unethical practices and that such charges will personally affect their own futures?

Diamond: Fashion Retailing: A Multi-Channel Approach. (C) 2006 Pearson Education, Upper Saddle River, NJ All Rights Reserved Ethics: Your Definition What is your definition of ethics?

Diamond: Fashion Retailing: A Multi-Channel Approach. (C) 2006 Pearson Education, Upper Saddle River, NJ All Rights Reserved Ethics Definition People know and distinguish between right and wrong. “Moral principles, rules of conduct.” (Webster’s Dictionary)

Diamond: Fashion Retailing: A Multi-Channel Approach. (C) 2006 Pearson Education, Upper Saddle River, NJ All Rights Reserved Situational Ethics People will use their own interpretations of right and wrong when involved in making a decision involving ethics.

Diamond: Fashion Retailing: A Multi-Channel Approach. (C) 2006 Pearson Education, Upper Saddle River, NJ All Rights Reserved Business Ethics The application of ethical decision making to the business environment with respect to what is right or wrong in the workplace and how decisions affect the company, its products, services, clients, and stakeholders.

Diamond: Fashion Retailing: A Multi-Channel Approach. (C) 2006 Pearson Education, Upper Saddle River, NJ All Rights Reserved Code of Ethical Conduct Used to take guesswork out of decision- making process Must be understood by every employee Must be understood by those outside the organization who do business with the organization

Diamond: Fashion Retailing: A Multi-Channel Approach. (C) 2006 Pearson Education, Upper Saddle River, NJ All Rights Reserved Organizations Need to: Recognize issues Develop analytical issues to address problem Elicit a sense of moral obligation and personal responsibility Tolerate disagreement Apply ethical decision-making skills to solve the problem

Diamond: Fashion Retailing: A Multi-Channel Approach. (C) 2006 Pearson Education, Upper Saddle River, NJ All Rights Reserved Walker Information Findings 49% of U.S. employees believe senior leaders are of high personal integrity. 48% of U.S. workers are comfortable reporting ethical violations. Industries with the worst ethical ratings are: transportation, retail, government, and manufacturing. Integrity at work relates to employee loyalty.

Diamond: Fashion Retailing: A Multi-Channel Approach. (C) 2006 Pearson Education, Upper Saddle River, NJ All Rights Reserved Areas of Ethical Concern Buyer conflicts of interest Vendor standards Questionable pricing standards Advertising misrepresentation Recruitment and advancement irregularity Internal theft justification

Diamond: Fashion Retailing: A Multi-Channel Approach. (C) 2006 Pearson Education, Upper Saddle River, NJ All Rights Reserved Vendor Standards Unethical manufacturing practices may affect American retailers Domestic standards differ from foreign standards Fair Labor Standards Act compliance

Diamond: Fashion Retailing: A Multi-Channel Approach. (C) 2006 Pearson Education, Upper Saddle River, NJ All Rights Reserved Advertising Misrepresentation Bait and switch Fine print

Diamond: Fashion Retailing: A Multi-Channel Approach. (C) 2006 Pearson Education, Upper Saddle River, NJ All Rights Reserved Influences on Ethical Development Religious upbringing Moral attitudes Response to peer pressure

Diamond: Fashion Retailing: A Multi-Channel Approach. (C) 2006 Pearson Education, Upper Saddle River, NJ All Rights Reserved Ethical Dilemmas- Part One Exaggerating credentials on resumes Using the Internet during work hours Bypassing the immediate supervisor Becoming romantically involved with the manager Feigning illness to take a day off Becoming a party to another’s lie

Diamond: Fashion Retailing: A Multi-Channel Approach. (C) 2006 Pearson Education, Upper Saddle River, NJ All Rights Reserved Ethical Dilemmas – Part Two Unfairly evaluating employee performance Misrepresenting product information Falsifying expense accounts Blaming others for personal mistakes Betraying the confidence of others

Diamond: Fashion Retailing: A Multi-Channel Approach. (C) 2006 Pearson Education, Upper Saddle River, NJ All Rights Reserved Why Write a Code of Ethics* 1. Define accepted/acceptable behaviors 2. Promote high standards of practice 3. Provide a benchmark for self-evaluation 4. Establish framework for professional behavior and responsibilities 5. Be a vehicle for occupational identity 6. Be a mark of occupational maturity *Life Skills Coaches Association of British Columbia

Diamond: Fashion Retailing: A Multi-Channel Approach. (C) 2006 Pearson Education, Upper Saddle River, NJ All Rights Reserved Code of Ethics Development Part One 1. State purpose of code 2. Create documents that serve the company 3. Develop code tailored to needs and values of the organization 4. Prepare list of rules and regulations so there is no doubt of expectations 5. State violations penalties

Diamond: Fashion Retailing: A Multi-Channel Approach. (C) 2006 Pearson Education, Upper Saddle River, NJ All Rights Reserved Code of Ethics Development Part Two 6. Detail manner in which violators will be punished 7. Organize committee to develop code 8. Describe implementation of code 9. Prepare formal document encompassing every aspect of code 10. Provide periodic review system for revision and updates to ensure currency

Diamond: Fashion Retailing: A Multi-Channel Approach. (C) 2006 Pearson Education, Upper Saddle River, NJ All Rights Reserved Social Responsibility The financial and not-financial contributions by an organization directed at helping eliminate or reduce problems in a society or community.

Diamond: Fashion Retailing: A Multi-Channel Approach. (C) 2006 Pearson Education, Upper Saddle River, NJ All Rights Reserved Trends in Ethics and Social Responsibility Reconsideration of Management Salary Packages Reconstruction of codes of ethics Establishment of recruitment and promotion standards Reexamination of advertising claims Development of codes with employee input Caring for the environment Employee volunteerism