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Quotes of the Day “The one and only social responsibility of business is to increase its profits.” Milton Friedman (b. 1912), Nobel laureate in economics “ The business of business is serving society, not just making money.” Dayton Hudson corporate constitution
Ethics Law and ethics may not always agree... Sometimes it is ethical to commit an illegal act... And some legal acts are unethical! Ethics is the study of how people ought to act.
There is little evidence that ethical behavior increases profits or that unethical behavior decreases profits… so why bother? Why Bother With Ethics? Society as a whole benefits by encouraging economic competition; no one wants to compete with unfair competitors. People feel better when they behave ethically. Unethical behavior can be costly, if there is public outrage leading to a boycott.
Questions to Ensure Ethical Behavior What are the facts? What are the critical issues? Who are the stakeholders? What are the alternatives? What are the implications of each choice? Are the alternatives legal? Do they “look bad?” What are the consequences of this choice? Does this action violate important values? Is more than one alternative right?
Businesses must take a stand on sexual and racial exploitation in advertising. Responsibility in Advertising Alternatives in advertisement ethics Ignore ethics and try to create ads that sell the most product, no matter the underlying message. Try generally to minimize exploitation. Include a systematic, focused review of underlying messages as part of the development process. Refuse to create any ads that are even potentially offensive.
Other Responsibilities To customers Privacy issues are controversial -- can a business sell lists that include your address? Your phone number? Your sexual preference? To employees Employers must take reasonable measures to ensure the safety of workers. Decisions about firing workers or cutting jobs raise ethical questions. To shareholders Questions are often raised about uses of a company’s profits -- distributed to shareholders, raising executives’ salaries, improving business?
Other Responsibilities (cont’d) To -- and in -- foreign countries Companies with operations in foreign countries are often criticized for deplorable working conditions and low wages. Response to these criticisms is often that even low- wage jobs are better than destitution and that these jobs are the beginnings of economic growth. Employees’ responsibility to company Should employees report unethical behavior among co-workers? Should promotion decisions be made based on friendships? These questions show the difficult choices that have to be made every day in the work place.
Click here to view an online discussion of ethical issues. The Best Insurance Even employees who are ethical in their personal lives may find it difficult to uphold their standard at work if those around them behave differently. The surest way to infuse ethics throughout an organization is for top executives to behave ethically themselves.
“Ethical behavior offers significant advantages: society as a whole benefits; executives who behave ethically have happier, more fulfilled lives; and unethical behavior can destroy a company.” “Ethical behavior offers significant advantages: society as a whole benefits; executives who behave ethically have happier, more fulfilled lives; and unethical behavior can destroy a company.”
Link to the Internet Clicking on the orange button below will link you the website for this book. (You must first have an active link to the internet on this computer.) Once there, click: Online Study Guide, then Your choice of a chapter, then Practice, then Internet Applications. You should then see web links related to that chapter. Click above to return to the slide show. Click Here!