Rachel Lissak BMGT350 D Whitney Fall 2011 Ch 3 1 3 1 The Concept of Ethical Behavior moral principals or values that generally govern the conduct of an o Ethics individual or group o Standard of behavior by which conduct is judged 3 2 Ethical Behavior in Business the rules people develop as a result of cultural values and social Morals norms Foundation of ethical behavior Usually characterized as good or bad o Morality and Business Ethics The values used to make decisions in the business world are acquired through family education and religious institutions Situation specific and time oriented Approaches Examine the set of consequences of a particular act Development of moral character within an individual Importance of rules 3 Level of Ethical Development Preconventional Morality most basic level Conventional Morality Postconventional Morality o Ethical Decision Making Rarely a cut and dried answer to ethical questions Factors that influence ethical decision making and judgments Extent of ethical problems within the organization Professionals with fewer unethical practices disapprove of them more Top management s actions on ethics Encouraging ethical behavior Develop a strong ethical culture Social Consensus Strong ethical culture Probability of a Harmful Outcome Length of time between the decision and the onset of consequences Number of people affected Congress established the Office of Congressional Ethics in 2008 o Ethical Guidelines Code of Ethics Advantages to creating a code of ethics a guideline to help employees make better decisions Helps employees identify what is acceptable business practices Effective internal control Helps avoid confusion on what is ethical The process of formulating the code facilitates discussion among employees about what is right and wrong Must be careful that it isn t too vague Rachel Lissak BMGT350 D Whitney Fall 2011 Ch 3 2 The AMA s code of ethics highlights 3 general norms and 6 ethical values o Ethics in Other Countries Ethics beliefs vary little from culture to culture Foreign Corrupt Practices Act FCPA from making illegal payments to public officials of foreign governments to obtain business rights or to enhance their business dealings in those countries law that prohibits U S corporations 3 3 Corporate Social Responsibility Corporate Social Responsibility CSR welfare Sustainability the idea that socially responsible companies will outperform their peers by focusing on the world s social problems and viewing them as opportunities to build profits and help the world at the same time a business s concern for society s Four components of Total CSR 1 Economic 2 Legal 3 Ethical 4 Philanthropic Pyramid of Corporate Responsibility responsibility is composed of 4 components and that the firm s economic performance supports the entire structure a model that suggests that corporate o Growth of Social Responsibility Growing around the world United Nations Global Compact UNGC UNGC is the world s largest global citizenship initiative o The Cost of Ignoring Social Responsibility o Green Marketing Green Marketing the development and marketing of products designed to minimize negative effects on the physical environment or to improve the environment Willing to pay more for green products
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