Slide 1Slide 2Slide 3Ethisphere links ethics to profitsBusiness Ethics & Social ResponsibilitySlide 6Slide 7Slide 8The Role of Ethics in BusinessSlide 10Slide 11Recognizing Ethical Issues in BusinessSlide 13Types and Incidences of Observed MisconductSources of Unethical Behavior in OrganizationsSources of Unethical BehaviorSlide 17Slide 18Business EthicsSlide 20Personal EthicsEthical ConcernsSlide 23Slide 24Making Decisions About Ethical IssuesImproving Ethical Behavior in BusinessSlide 27Slide 28Codes of EthicsSlide 30Business Ethics – Taking ResponsibilityNature of Social ResponsibilityPyramid of Social ResponsibilitySlide 34Slide 35Slide 36Social Responsibility IssuesSlide 38Slide 39Slide 40Slide 41Business in aChanging WorldMcGraw-Hill/IrwinCopyright © 2009 by the McGraw-Hill Companies, Inc. All rights reserved.Chapter 2Business Ethics and Social Responsibility2-3Ethisphere links ethics to profitsPublication that illuminates the relationship between ethics and profits. 2-4Business Ethics & Social ResponsibilityExec who allegedly made $270M off Enron to pay SEC $31.5MBusiness Ethics – principles and standards that determine acceptable conduct in business2-5Business Ethics & Social ResponsibilityA Timeline of Ethical and Socially Responsible Concerns 2-6Business Ethics & Social ResponsibilitySocial responsibility– business’s obligation to maximize its positive impact and minimize its negative impact on society2-7Business Ethics & Social ResponsibilityLaws and regulations encourage businesses to conform to society’s standards, values, and attitudes. Sarbanes-Oxley Act - 20022-8The Role of Ethics in BusinessConcern about unethical business practices continue – HealthSouth’s accounting improprieties and securities fraud2-9The Role of Ethics in BusinessUnethical and/or Illegal•Accounting fraud•Deceptive advertising•Unfair competitive practices•Internet thef2-10The Role of Ethics in BusinessEthical Conduct•Builds trust•Promotes confidence•Validates relationshipsLearn how to recognize and resolve ethical issues2-11Recognizing Ethical Issues in BusinessEthical issue – an identifiable problem, situation, or opportunity that requires a person to choose from among several actions that may be evaluated as right or wrong, ethical or unethical.2-12Recognizing Ethical Issues in BusinessHow to judge the ethics of a situation – examine the situation from your stakeholders’ position, including customers and competitors2-13Types and Incidences of Observed MisconductMany business issues may seem straightforward and easy to resolve on the surface, but are in reality very complex.Recognizing Ethical Issues in Business2-141. Overly aggressive financial or business objectives2. Abusive & intimidating behavior3. Conflict of interest4. Fairness & honesty5. Communications6. Business relationshipsSources of Unethical Behavior in Organizations2-15Sources of Unethical BehaviorAbusive and intimidating behavior“Bullies” behavior:2-16Conflict of interest – –the most common ethical issue identified by employees.–Advance personal interests over others’ interests–Benefit self at the expense of the companySources of Unethical Behavior in Organizations2-17Least Corrupt Countries2-18Business EthicsFairness & honesty – the heart of business ethics•How employees use resources•No harm to customers•Accurate representations•Disclosure2-19Business EthicsMost Popular Office Supplies Employees Pilfer“More Employees Taking Supplies,” The News Journal2-20Personal Ethics25,000 high school students:•62% cheated on exams at least once•35% copied documents from Internet•27% shoplifed•23% cheated to win at sportsHonesty?2-21Ethical Concerns•False/misleading advertising•Deceptive personal selling tactics•Product safety and quality•Unsubstantiated claims•Product labelingCommunications2-22Ethical Concerns•Relationships with customers•Relationships with suppliers•Relationships with co-workersBusiness Relationships2-23Ethical ConcernsThe act of taking someone else’s work and presenting it as your own without mentioning the sourcePlagiarism2-24Making Decisions About Ethical IssuesQuestions to Consider in Determining Whether an Action Is EthicalOpen discussion of ethical issues does not eliminate ethical problems; it does promote trust and learning in an organization.2-25Improving Ethical Behavior in BusinessEthical decisions in an organizations are influenced by three key factors2-26Improving Ethical Behavior in BusinessCodes of Ethics – Formalized rules and standards that describe what a company expects of its employees.2-27Improving Ethical Behavior in BusinessKey Things to Consider in Developing a Code of Ethics2-28Codes of EthicsAccording to the NBES, employees in organizations with written standards of conduct are more likely to report misconduct when they observe it.National Business Ethics Survey (NBES)2-29Codes of EthicsThe act of an employee exposing an employer’s wrongdoing to outsiders, such as the media or government regulatory agencies.Whistleblowing2-30Business Ethics – Taking Responsibility2-31Nature of Social Responsibility1. Economic2. Legal3. Ethical4. Voluntary (philanthropic)4 Dimensions2-32Pyramid of Social Responsibility2-33Nature of Social ResponsibilityThe extent to which businesses meet the legal,ethical, economic, and voluntary responsibilitiesplaced on them by their stakeholders.Corporate Citizenship2-34Nature of Social Responsibility1. Intel Corporation2. Eaton Corporation3. Nike Inc.4. Deere and Co.Best Corporate Citizens2-35Nature of Social ResponsibilityArguments For and Against Social Responsibility2-36Social Responsibility Issues•Primary concern with profit or ROI•Financial community at large•Proper accounting procedures•Protecting owner’s rights and investmentsOwners & Stockholders2-37Social Responsibility Issues•Provide a safe workplace•Adequate compensation•Listen to grievances•Fair treatmentEmployee Relations2-38Social Responsibility IssuesConsumerism – the activities that independent individuals, groups, and organizations undertake to protect their rights as consumers.Consumer Relations2-39Social Responsibility Issues•Animal rights•Pollution•Going GreenEnvironmental Issues2-40Social Responsibility Issues•General community and global welfare•Hardcore unemployed•Charitable contributions (United Way)•Avon’s Breast Cancer Awareness CrusadeCommunity