Chapter 4 – Page 82. Discussion starter: Is unethical and illegal the same thing? If it is illegal, is it unethical?

Goals Chapter 4.1 Explain why ethics are important in business Describe a code of ethics Discuss ethical dilemmas Describe laws that deal with ethical dilemmas.

The Main Idea – Chapter 4 This chapter covers the role of ethics and social responsibility in the business world. 4.1 – Discusses the importance of ethics, codes of ethics, and laws that affect ethics in business Describes how companies have changed their attitude toward social responsibility and how some demonstrate it.

The Importance of Ethics pg 84 What are some of your personal ethics? When did you form the morals and ethics you live by?

The Importance of Ethics All individuals develop their own set of ethical rules Helps them decide how to act in certain situations Like us, businesses develop ethics to help them determine how to behave… Ethics A set of moral principles or values that govern behavior.

Code of Ethics/Conduct aka Code of Conduct Formal documents that are shared with all employees Code of Ethics A document that outlines the principles of conduct to be used in making decisions within the organization.

Code of Ethics/Conduct Examples: Verizon Timberland Kraft Foods Patagonia Think of a company and find their code of ethics/conduct. How do you feel about their code of conduct?

Verizon Code of Conduct Worksheet Individually, complete the Verizon Code of Conduct worksheet

Code of Ethics Homework: Looking at the Verizon Code of Conduct example on my wiki, please read it and pick another example to examine. –Write a one page reflective essay comparing and contrasting the two (saved in Drive as “Code of Conduct Compare and Contrast”) –While reading, get a feel for the two companies and what message they are trying to send –Include how the similarities/difference between the two makes you feel about the company overall

Code of Ethics. In groups of three… Consider the school store as our business Create a Power point code of ethics for the school cart that should govern our classroom No requirements how lengthy or format; put serious thought into its layout and form. Do you want a Verizon or Timberland code of ethics or a mix?

Behaving Honestly pg 87 Enron Scandal Sarbanes-Oxley Act of (named after the politicians who got it started) –Contains important rules affecting the reporting and governance of public companies and their directors and officers. –Required CEOs and CFOs to certify reports filed with the SEC

Dealing with Ethical Dilemmas pg 88 Read and discuss Handout –read and discuss

Teams of two… Come up with your own ethical dilemma Discuss with class possible solutions

Laws Relating to Ethics in Business The Sherman Act of Illegal for companies to form a monopoly The Clayton Act of Illegal to charge different prices to different wholesale customers. –Ex: Pittsburg Steel can’t charge Honda one thing and Ford another –Also bans requiring a customer to purchase a second good. Ex- PC and Windows operating system

Laws Relating to Ethics in Business The Wheeler-Lea Act of bans unfair or deceptive acts or practices, including false advertising –Must inform consumers of possible negative consequences of using their product.

The Wheeler-Lea Act of 1938 examples: Humira Advair

Consumer Protection pg. 91 Food and Drugs: The Federal Food, Drug and Cosmetic Act of gave power to the FDA to oversee the safety of food, drugs and cosmetics that they are not impure, improperly labeled, falsely guaranteed and “unhealthful”

Consumer Protection pg. 91 Consumer Products: The Consumer Product Safety Commission (CPSC) of Establishes minimum product safety standards on consumer products. –If they find a product to be defective, they can force the manufacturer to recall the product. –Try finding a recalled product, weirder the better! –Government Recall website, Wal-MartGovernment Recall websiteWal-Mart

Consumer Protection pg. 91 Loans: Truth in Lending Act of Creditors are required to let consumers know how much they are paying in finance charges and interest

Environmental Protection pg. 92 National Environmental Policy Act of this law created the Environmental Protection Agency (EPA) –Mission is to protect human health –Safeguard the air, water, and land

Environmental Protection pg. 92 The Clean Air Act of Federal law that regulates air emissions.

China’s Pollution

Environmental Protection pg. 92 Toxic Substances Control Act of 1976 – Gave the EPA the power to track 75,000 industrial chemicals made here/imported –EPA screens the chemicals and can require testing so there is no health/environment hazard

Environmental Protection pg. 92 The Clean Water Act of 1977 – Gave the EPA the power to set standards on the type and amount industries can dump into bodies of water.

Environmental Protection pg. 92

Intellectual Property Patents Trademarks Copyrights Intellectual property Ownership of ideas, such as inventions, books, movies, and computer programs.

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