1. Ethics and Corporate Responsibility Chapter Three McGraw-Hill/Irwin Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.

2. Ethics  Ethics  The system of rules that governs the ordering of values 3-2

3. Telling the Truth and Lying: Possible Outcomes 3-3 Table 3.1

4. Ethics  Ethical issue  Situation, problem, or opportunity in which an individual must choose among several actions that must be evaluated as morally right or wrong  Business ethics  The moral principles and standards that guide behavior in the world of business. 3-4

5. Ethical Systems  Moral philosophy  Principles, rules, and values people use in deciding what is right or wrong  Universalism  The ethical system stating that all people should uphold certain values that society needs to function. 3-5

6. Ethical Systems  Egoism  An ethical system defining acceptable behavior as that which maximizes consequences for the individual  Utilitarianism  An ethical system stating that the greatest good for the greatest number should be the overriding concern of decision makers. 3-6

7. Ethical Systems  Relativism  Philosophy that bases ethical behavior on the opinions and behaviors of relevant other people  Virtue ethics  Classification of people based on their level of moral judgment. 3-7

8. Ethical Systems  Kohlberg’s model of cognitive moral development  Perspective that what is moral comes from what a mature person with “good” moral character would deem right. 3-8

9. Some Ethical Issues in Business 3-9

10. A Process for Ethical Decision Making 3-10 Figure 3.1

11. The Business Costs of Ethical Failure 3-11 Figure 3.2

12. Corporate Social Responsibility  Economic responsibilities  To produce goods and services that society wants at a price that perpetuates the business and satisfies its obligations to investors.  Legal responsibilities  To obey local, state, federal, and relevant international laws 3-12

13. Corporate Social Responsibility  Philanthropic responsibilities  Additional behaviors and activities that society finds desirable and that the values of the business support. 3-13

14. Pyramid of Global Corporate Social Responsibility and Performance 3-14 Figure 3.3

15. Ecocentric Management  Ecocentric management  Goal is the creation of sustainable economic development and improvement of quality of life worldwide for all organizational stakeholders. 3-15