1. Ethics and Social Responsibility
Chapter 3
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2. Review What are the major economics systems?
How do we know how well the economy is doing?
How does the government try to affect the economy?
What causes inflation?

3. Learning Objectives Define business ethics.
Explain why we study business ethics.
Identify ethical issues.
Identify steps to maintain honesty and integrity in a business environment.
Define corporate social responsibility
Learn how to identify an ethical organization.
Learn how to avoid an ethical lapse.
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4. Legal Framework of Business
Antitrust
monopolies are illegal
no price discrimination
no collusion
Regulation
FTC – Federal Trade Commission
FCC – Federal Communications Commission
FDA – Food and Drug Administration
SEC – Securities and Exchange Commission

5. Legal Framework of Business
Liability
Intellectual Property protection
patent
copyright
trademark
trade secret

6. Business Ethics Ethics Business ethics Why study it?
Knowing right from wrong
Knowing when one is doing right or wrong
Business ethics
Acting ethical in a business context
Why study it?
Can you teach someone to act ethically?

7. Business Ethics Ethical issues Ethical dilemmas Examples
Involve some controversy over right and wrong
Ethical dilemmas
Right course of action is unclear
Examples
Is it ok to accept a gift from a supplier?
Is it ok to renege on a verbal commitment?
Is it ok to give a contract to a relative?

8. Identifying Ethical Issues and Dilemmas
Conflicts of interest
Personal interest vs. company
E.g. Insider trading
Conflicts of loyalty
Friend or family vs. company
Bribes vs. gifts
Whistle-blowing

9. Social Responsibility to Stakeholders
Owners (shareholders)
Increase value
Provide accurate information
Managers
Fiduciary responsibility to owners
Potential conflict of interest
Employees
Wages & benefits
Safety & health

10. Social Responsibility to Stakeholders
Customers
Legal right to safe products
Complete information
Choice
Be heard
Communities
Philanthropy

11. Recognizing Unethical Behavior
Feel uneasy about work
Object to how treated
Uncomfortable how others treated
Question appropriateness of decisions
Examples
Sexual harassment
“Adjust” the books

12. Approach to Ethical Dilemmas
Identify the problem
Identify options
Evaluate effects on stakeholders
Establish criteria for decision
Select best option

13. Ethical Decisions
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14. Ethical Decisions Refuse to rationalize”
“Behavior isn’t really illegal or immoral”
“It’s in everyone’s best interest”
“No one will find out”
“The company will protect me”