Ethics and Social Responsibility

Contents What are Ethics? What are Business Ethics? Managing Ethically Corporate Responsibility Social Responsibility Org. Influences & Controls on Ethical Conduct Ethics in the International Context

What are Ethics? Ethics are beliefs about what is right and wrong or good or bad. Ethical behaviour is behaviour that conforms to individual beliefs and social norms about what is right and good. Unethical behaviour is behaviour that individual beliefs and social norms define as wrong and bad.

What are Business Ethics? Business ethics is a term often used to refer to ethical or unethical behaviours by a manager or employee of an organisation. From a practical point of view or perspective, business ethics is a form of applied ethics. It aims at inculcating a sense within a company's employee population of how to conduct business responsibly.

Managing Ethically Managers must balance diverse and sometimes contradictory demands Managers must monitor their employees’ behaviour as well as their own (lead by example) Managers should provide ethical training and education for all employees

Corporate Responsibility Corporate Responsibility refers to fulfilling the responsibilities or obligations that a company has towards it stakeholders.

Social Responsibility Businesses should have a positive impact on society Social Responsibility refers to obligations a company has to the community, particularly with respect to charitable activities and environmental stewardship

Social Responsibility Environmental Stewardship is a position taken by an organisation to protect or enhance the natural environment as it conducts its business activities. (Solomon, Stuart, Carson, Smith, 2003)

Social Responsibility Areas of Social Responsibility

Org. Influences & Controls on Ethical Conduct Organisations need to have a positive influence on individuals’ ability to act ethically. Promote sound Corporate Cultures Businesses can promote ethical conduct in three ways: Commitment of Top Management Develop Ethical Guidelines Establish Compliance Programs

Org. Influences & Controls on Ethical Conduct Commitment of Top Management Make Organisational Integrity a Core Value Ensure that customers, suppliers, and employees are all aware of the firm’s stress on ethics

Org. Influences & Controls on Ethical Conduct Develop Ethical Guidelines Policies & Procedures Develop Code of Ethics A Code of Ethics is a formal document that states an organisation’s primary values and the etchical rules it expects employees or other stakeholders to follow. (Robbins, Coulter, Stuart-Kotze, 2000) Establish Compliance Programs Training & Cognitive Thinking Exercises

Org. Influences & Controls on Ethical Conduct Ethical Dilemmas People face many “grey areas” A dilemma is a situation requiring a choice between equally undesirable alternatives (damned if you do, damned if you don’t type situation). An ethical dilemma is a situation that arises when all courses of action open to a decision maker are judged to be unethical. (Plunkett, Attner, Allen, 2002)

Ethics in the International Context Are ethical standards universal across the globe? Social and cultural differences between countries are important factors that determine ethical and unethical behaviour.

Ethics in the International Context Gift-Giving, Bribery, & Corruption Transparency.Org’s - Corruption Perceptions Index 2003 Country rankCountryCPI 2003 scoreSurveys usedStandard deviation High-low range 1Finland Iceland Denmark New Zealand Singapore Sweden Netherlands Australia Norway Switzerland Canada Luxembourg United Kingdom Austria Hong Kong Germany Belgium Ireland USA