11 14 13 Chapter 4 Notes Demanding Ethical and Socially Responsible Behavior Ethics society s accepted standards of moral behavior that is behaviors accepted by society as right rather than wrong Do unto others as you would have them do unto you Compliance based ethics code emphasize preventing unlawful behavior by increasing control and penalizing wrong doers Integrity based ethics code the organizations guiding values create an environment that supports ethically sound behavior and stress shared accountability Improving business ethics 1 Management must adopt code of conduct 2 Employees must understand that expectations for ethical behavior starts at senior management and all employees are expected to act accordingly 3 Managers and others must be trained to consider the ethical implications of all business decisions 4 Ethics office must be set up so employees can communicate anonymously Whistleblowers must feel protected from retaliation 5 Outsiders must be told about the ethics program 6 Ethical code must being enforced with timely action if any rules are broken Corporate social responsibility concern businesses have for the welfare of society not just for their owners based on a commitment to integrity fairness and respect o Corporate philanthropy charitable donations to nonprofit groups of all kinds o Corporate social initiatives enhanced forms of corporate philanthropy more directly related to the company s competencies o Corporate responsibility includes everything from hiring minority workers to making safe products minimizing pollution using energy wisely and providing a safe work environment everything that has to do with acting responsibly within society o Corporate policy the position a firm takes on social and political issues Insider trading unethical uses private company information to further insiders own fortunes or those of their family and friends o Regulation FD requires companies that release any information to share it with everybody not just a few selected people Social auditing systematic evaluation of an organizations progress toward implementing socially responsible and responsive programs 5 types of groups serve as watchdogs to monitor how well companies enforce their ethical and social responsibility policies 1 Socially conscious investors insist that companies extend their own high 2 Social conscious research organizations analyze and report on corporate social 3 Environmentalists apply pressure by naming companies that don t abide by standards to their suppliers responsibility efforts environmentalists standards 4 Union officials hunt down violators and force companies to comply to avoid negative publicity 5 Customers make buying decisions based on their social conscience
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