McGraw-Hill/ Irwin © 2002 by The McGraw-Hill Companies, Inc. All Rights Reserved. 4-1 Chapter Four Demonstrating Ethical Behavior & Social Responsibility

McGraw-Hill/ Irwin © 2002 by The McGraw-Hill Companies, Inc. All Rights Reserved. 4-2

McGraw-Hill/ Irwin © 2002 by The McGraw-Hill Companies, Inc. All Rights Reserved. 4-3 Ethics Check Questions: Ô Is It Legal? Ô Is It Balanced? Ô How Will It Make Me Feel About Myself?

McGraw-Hill/ Irwin © 2002 by The McGraw-Hill Companies, Inc. All Rights Reserved. 4-4 Factors That Cause Workers To Act Unethically n Pressure to meet sales, budget or profit goals n Lack of recognition n Personal financial worries n Balancing work & family n Poor communication

McGraw-Hill/ Irwin © 2002 by The McGraw-Hill Companies, Inc. All Rights Reserved. 4-5 Top Five Unethical/Illegal Behaviors of Workers è Cut corners in quality control è Covered up incidents è Abused or lied about sick days è Lied to or deceived customers è Put inappropriate pressure on others

McGraw-Hill/ Irwin © 2002 by The McGraw-Hill Companies, Inc. All Rights Reserved. 4-6 Fostering Ethical Behavior nLeadership nCodes of Conduct –Compliance-based –Integrity-Based nSocial Audits nWhistle Blowing

McGraw-Hill/ Irwin © 2002 by The McGraw-Hill Companies, Inc. All Rights Reserved. 4-7 Factors Influencing Managerial Ethics Individual OrganizationalEnvironmental  Values  Work Background  Family Status  Personality  Top Level Mgmt. Philosophy  The Firm’s Reward System  Job Dimensions  Competition  Economic Conditions  Social/Cultural Institutions

McGraw-Hill/ Irwin © 2002 by The McGraw-Hill Companies, Inc. All Rights Reserved. 4-8 Business Mission Statement n Why? n What? n How? “Our mission is to show people how they can use the power of their bodies and minds to make their lives better. ‘You can do it,’ we say on every page of our magazines and books.- Ardath Rodale, Rodale Publishing

McGraw-Hill/ Irwin © 2002 by The McGraw-Hill Companies, Inc. All Rights Reserved. 4-9 Business Mission Statement Our mission is to be the world leader in Customer Service, innovation and product value in the Hand Tool industry. We will accomplish this by fostering an environment that allows our people to produce quality hand tools on time and meet business growth needs through employee excellence and development.- Western Forge

McGraw-Hill/ Irwin © 2002 by The McGraw-Hill Companies, Inc. All Rights Reserved. 4-10

McGraw-Hill/ Irwin © 2002 by The McGraw-Hill Companies, Inc. All Rights Reserved Business Ethics & Social Responsibility n Ethics- Values/Principles n Responsibility- Consequences of Actions

McGraw-Hill/ Irwin © 2002 by The McGraw-Hill Companies, Inc. All Rights Reserved Ethical Decision Resolved Through: n Religious Teachings n Individual Rights n Legislation n Court Decisions

McGraw-Hill/ Irwin © 2002 by The McGraw-Hill Companies, Inc. All Rights Reserved Classifying Business Decisions Ethical Unethical IllegalLegal Unethical and Illegal Ethical and Legal Unethical but Legal Ethical but Illegal

McGraw-Hill/ Irwin © 2002 by The McGraw-Hill Companies, Inc. All Rights Reserved Steps to Improve U.S. Business Ethics 1.Top Management 2.Employees 3.Managers 4.Ethics Office 5.Outsiders 6.Enforcement

McGraw-Hill/ Irwin © 2002 by The McGraw-Hill Companies, Inc. All Rights Reserved Three Levels of Social Responsibility Societal Responsibility Stakeholder Responsibility Profit Responsibility Owners/Stockholders GeneralPublic Customers Employees Suppliers/Distributors EcologicalEnvironment Public Interest Groups Source: Marketing, 5/E by Berkowitz, Kerin, Hartley, and Rudelius.

McGraw-Hill/ Irwin © 2002 by The McGraw-Hill Companies, Inc. All Rights Reserved Responsibility to Employees n Working Conditions n Equal Employment Opportunity n Affirmative Action n Diversity Training n Economic Security n Child Care/Parental Leave n Employee Dignity n Conflict of Interest

McGraw-Hill/ Irwin © 2002 by The McGraw-Hill Companies, Inc. All Rights Reserved What Concerns Workers Most on the Job? n Hazardous Materials 23% n Injury 20% n Repetitive job motions 10% n Poor ventilation 7% n HIV/Aids 6% Percent

McGraw-Hill/ Irwin © 2002 by The McGraw-Hill Companies, Inc. All Rights Reserved Responsibility to Customers/Environment n Right To Safety n Right To Be Informed n Right To Choose n Right To Be Heard n Quality Of Life n Ecology/Pollution

McGraw-Hill/ Irwin © 2002 by The McGraw-Hill Companies, Inc. All Rights Reserved Responsibility to Society, Investors, & Suppliers n Fairness n Honesty n Timely Action n Appropriate Compensation n Philanthropy

McGraw-Hill/ Irwin © 2002 by The McGraw-Hill Companies, Inc. All Rights Reserved Why People Volunteer Percent of Respondents Total is more than 100% because respondents could give more than one reason.

McGraw-Hill/ Irwin © 2002 by The McGraw-Hill Companies, Inc. All Rights Reserved Contributions to Charity (In Billions of Dollars) Source: Forbes Dec. 15, 1997

McGraw-Hill/ Irwin © 2002 by The McGraw-Hill Companies, Inc. All Rights Reserved New Economy & New Philanthropy * In Billions Source: Business Week, Mar. 13, 2000

McGraw-Hill/ Irwin © 2002 by The McGraw-Hill Companies, Inc. All Rights Reserved Corporate Annual Giving Merck Johnson & Johnson Pfizer Eli Lilly IBMMicrosoftIntel Bank of America $221.0* Source: The Taft Group * In Millions

McGraw-Hill/ Irwin © 2002 by The McGraw-Hill Companies, Inc. All Rights Reserved Most Admired Companies by Industry  ApparelLevi-Strauss  AirlinesSouthwest  Food ServicesMcDonald’s  Food ProductsCampbell’s  BeveragesCoca-Cola  ElectronicsIntel IndustryCompany Source: Fortune Magazine

McGraw-Hill/ Irwin © 2002 by The McGraw-Hill Companies, Inc. All Rights Reserved International Ethics & Social Responsibilities nU.S. not unique –Japan/S. Korea/China = influence peddling –Mexico = child labor nLeaders being held to new/higher standards –Chinese prison labor –McDonald’s using rain forest land for cattle grazing