1. Business ethics and social responsibility
Business Principles A
Chapter 4
Mrs. Sorrell

2. Who Benefits from Business?
Businesses are active and involved in a responsible and fair way in the lives of individual employees and their communities.

3. What is Ethics?
Def: the set of moral principles by which people conduct themselves personally, socially, or professionally.
Don’t cheat on a test
Don’t steal clothing in the store
Recycle to take care of the environment
Personal honor and integrity
Business ethics: set of laws about how a business should conduct itself
Businesses must operate legally and humanely

4. Legal Responsibility
Sweatshops—factories that have unsafe working conditions
treat workers badly
pay poorly
US Government set up independent agencies to protect society
OSHA—Occupational Safety and Health Administration
Set and enforce work-related health and safety rules
Consumer Protection Agency
Federal Communications Commission

5. Code of Ethics
Most businesses police themselves by distributing codes of ethics
Def: set of strict guidelines for maintaining ethics in the workplace
Doctors, lawyers, journalists, and teachers have their own code of ethics
Covers everything from employee behavior to environmental safety
Individual companies usually have their own codes as well

6. Ethics as Good Business
Unethical practices in business
Lying
Offering substandard merchandise
Treating customers unfairly
Violating government regulations can create fines or jail time
Violating company code of ethics can lead to being fired or losing your license
Customers are quick to spread the word if they have been wronged by a business
Most businesses rely on repeat customers and word-of-mouth to get new customers
Treating employees unethically can also backfire

7. Important Ethical Questions
Considering a questionable course of action?
Is it against the law? Does it violate company or professional policies?
What if everyone did this? How would I feel if someone did this to me?
Am I sacrificing long-term benefits for short-term gains?
Business works best when there is mutual trust between buyers and sellers.

8. Making Decisions on Ethical Issues
Identify the ethical dilemma
Discover alternative actions
Decide who might be affected
List the probable effects of the alternatives
Select the best alternative

9. Social Responsibility
Def: the duty to do what is best for the good of society
The goal of business is to make a profit
Businesses must consider what they do to solve problems of society
Businesses must offer goods and services that other people want
Businesses must provide good service to their customers
Businesses are under ethical obligation to:
Provide safe products
Create jobs
Protect the environment
Contribute to the overall standard of living in society
Conflict of interest—def. Temptation to put profits before social welfare
Consumer and employee theft costs businesses billions of dollars each year

10. Responsibility to Customers
Customers are the first responsibility of businesses
FDA—Food and Drug Administration
Government agency that protects consumers from dangerous or falsely advertised products
Fair competition between businesses is healthy for the marketplace, but some companies don’t always play reasonably.
Unethical means to eliminate competition
Conspire with other companies to control the market for a product
This cause less choice in what we can buy and how much we pay

11. Responsibility to Employees
Provide employees with safe working conditions
Equal treatment
Fair pay
Note: just 100 year ago,, workers had few rights
Government has passed laws to protect workers from a range of issues
Child labor abuses
Rights of workers to organize
Equal Pay Act (1964)
Requires that men and women be paid the same wages for doing equal work
American Disabilities Act
Bans discrimination against persons with physical or mental disability

12. Responsibility to Society
During the 19th and 20th centuries, many businesses polluted and destructed the environment in order to profit
The tradeoff for a higher standard of living only benefited a few
In the mid 20th century, the tradeoff became a concern for many
Environmental Protection Agency (EPA)
Enforces rules that protect the environment and control pollution