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©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 4 Business Ethics and Social Responsibility: Doing Well by Doing Good Define ethics and explain the concept of universal ethical standards Describe business ethics and ethical dilemmas Discuss how ethics relates to both the individual and the organization Define social responsibility and examine the impact on stakeholder groups Explain the role of social responsibility in the global arena Describe how companies evaluate their efforts to be socially responsible 2 4-1 4-2 4-3 4-4 4-5 4-6
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Ethics ■ Sets of beliefs about right and wrong, good and bad ■ Challenge - Forming broad agreement on specific ethical standards People come from diverse backgrounds ■ Legal actions can be unethical ■ Not all actions have ethical implications 3 ©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Exhibit 4.1 - Legal-Ethical Matrix 4 ©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Exhibit 4.2 - Universal Ethical Standards 5 ©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Source: © 2009 Josephson Institute. Reprinted from the Josephson Institute’s Report Card on the Ethicsbof American Youth Summary with permission.
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©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Ethics and its Connections ■ Business ethics: Application of right and wrong, good and bad, in a business setting ■ Ethical dilemma: Decision that involves a conflict of values 6
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Ethics and its Connections 7 ©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Ethics and the individual Ethics and the organization
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Understanding Social Responsibility 8 ©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Do you fully understand each dimension of the problem? Who would benefit? Who would suffer?Are the alternative solutions legal? Are they fair? Does your decision make you comfortable at a “gut feel” level? Could you defend your decision on the nightly TV news? Have you considered and reconsidered your responses to each question?
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Exhibit 4.3 - Ethics at Work: How Would You Judge the Actions of These Business Leaders? 9 ©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Key Elements of a Strong Culture ■ Exhibition of ethical actions at all levels of an organization ■ Accountability for actions 10 ©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Code of Ethics Defines the ethical standards of an organization and gives employees the information they need to make ethical decisions across a range of situations ■ In multinational companies: It lays out unifying values and priorities for divisions that are rooted in different cultures 11 ©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Steps to Maintain Code of Ethics ■ Get executive buy-in and commitment to follow-through ■ Establish expectations for ethical behavior at all levels of the organization ■ Integrate ethics into mandatory staff training ■ Ensure that the ethics code is both global and local in scope 12 ©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Steps to Maintain Code of Ethics ■ Build and maintain a clear, trusted reporting structure for ethical concerns and violations ■ Establish protection for whistle-blowers Whistle-blowers: People who report illegal or unethical behavior ■ Enforce the code of ethics 13 ©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Exhibit 4.4 - The Spectrum of Social Responsibility 14 ©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Social Responsibility: Stakeholder Groups ■ Social responsibility: Obligation of a business to contribute to society ■ Stakeholders: Groups that have a stake in the performance and actions of an organization 15 ©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Responsibility to Employees ■ Employers must comply with laws that relate to equal opportunity, workplace safety and minimum wage ■ Employers ensure: Hard work and talent are rewarded Proactive protections are established Programs for on-site day care 16 ©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Responsibility to Customers Consumerism: Social movement that focuses on four key consumer rights Right to be safe Right to be informed Right to choose Right to be heard Planned obsolescence: Deliberately designing products to fail in order to shorten the time between consumer repurchases 17
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©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Responsibility to Investors ■ Sarbanes-Oxley Act: Limits conflict-of- interest issues by restricting the consulting services that accounting firms can provide for the companies they audit 18
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©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Responsibility to Community ■ Corporate philanthropy: All business donations to nonprofit groups ■ Cause-related marketing: Partnership between a business and a nonprofit Designed to spike sales for the company and raise money for the nonprofit ■ Corporate responsibility: Focuses on the actions of the business itself rather than donations of money and time 19
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Reality TV Video Slide 20 ©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. www.cengage.com/introbusiness/book_content/9781 285187822_kelly/videos/04bobbyg.html
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© iStockphoto.com / DNY59 ©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. ■ Use the spectrum of social responsibility to evaluate the actions of the Vancouver, British Columbia company, Clearly Canadian, and adventure capitalist Bobby G, who is an investor in Clearly Canadian. ■ Is the Nicaraguan clean water project better described as corporate philanthropy or corporate responsibility? 21
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©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Web-link: Sustainability - Responsibility Towards Environment ■ The web-link is outlines Levi Strauss’ commitment to environmental sustainability http://www.levistrauss.com/sustainability/planet 22
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Assessing Social Responsibility 23 ©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. ■ When does a gift become a bribe? ■ How can corporations monitor corruption and enforce corporate policies in their foreign branches? ■ What are other ways to gain a competitive edge in countries where bribes are both accepted and expected?
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Assessing Social Responsibility 24 ©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. ■ Does a living wage mean enough to support an individual or a family? ■ Does “support” mean enough to subsist day to day or enough to live in modest comfort? ■ Should American businesses ban child labor in countries where families depend on their children’s wages to survive?
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Assessing Social Responsibility 25 ©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. ■ Social audit : Evaluation of how well a firm is meeting its ethics and social responsibility objectives Steps involved: Establishing goals Determining how to evaluate the achievement of these goals
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©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Define ethics and explain the concept of universal ethical standards Describe business ethics and ethical dilemmas Discuss how ethics relates to both the individual and the organization Define social responsibility and examine the impact on stakeholder groups Explain the role of social responsibility in the global arena Describe how companies evaluate their efforts to be socially responsible 26 4-1 4-2 4-3 4-4 4-5 4-6
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