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Ethics

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beliefs about what is right and wrong or good or bad in actions that affect others

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Ethical Behavior

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behavior conforming to generally accepted social norm about what is right and good

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Unethical Behavior

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behavior that does not conform to generally accepted social norms (what is defined as wrong and bad)

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Business Ethics

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ethical or unethical behaviors by employees in the context of their jobs

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Managerial Ethics

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the standards of behavior that guide individual manager in their work

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In business, you use behavior towards?

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employees, organization, and other economic agents

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What are the three steps in assessing ethical behavior?

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1. gather the relevant factual information 2. analyze the facts to determine the most appropriate moral values 3. make an ethical judgment based on the rightness or wrongness of the proposed activity of policy

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What 4 norms do you consider when gathering relevant factual information?

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1. utility 2. rights 3. justice

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Utility

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does a particular act optimize the benefits to those who are affected by it?

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Rights

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does it respect the rights of all individuals involved?

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Justice

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is it consistent with people's responsibilities involved?

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Two of the most common approaches to formalizing top management commitment to ethical business practices are?

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Adopting written codes Instituting ethics programs

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Adopting written codes

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1. We have trust and respect of individuals 2. We focus on a high level of achievement and contribution 3. We conduct our business with uncompromising integrity 4. We achieve our common objectives through teamwork 5. We encourage flexibility and innovation

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Social Responsibility

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the attempt of business to balance its commitments to groups and individuals in its social environments

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Organizational Stakeholders

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those groups individuals and organizations that are directly affected by the practice of an organization and who therefore have a stake in its performance

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Easier way to say what an organizational stakeholders is

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anyone affected by the business

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Examples of organizational stakeholders

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customer, employees,investors, supplies, and local communities

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Customers

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treat customers fairly and honestly

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Employees

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treat employees fairly and respect their dignity and basic human needs

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Investors

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follow proper accounting procedures

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Suppliers

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create mutually beneficial partnership agreements with supplies

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Local and International Communities

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involvement in programs and charities

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Contemporary Social Consciousness

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the expectation of an expanded role for business in protecting and enhancing the general welfare of society

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Consumerism

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form of social activism dedicated to protecting the rights of consumers in their dealings with businesses

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Consumer Bill of Rights

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1. Consumers have a right to safe products 2. Consumers have a right to be informed about all relevant aspects of a product 3. Consumers have a right to be heard 4. Consumers have a right to choose what they buy 5. Consumers have a right to be educated about purchases 6. Consumers have a right to courteous service

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Collusion

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illegal agreement between two or more companies to commit a wrongful act

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Whistle Blower (responsibility toward employees)

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employee who detects and tries to put an end to a company's unethical, illegal, or socially irresponsible, actions by publicizing them

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Responsibility toward investors

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1. insider trade 2. misrepresentation of finances

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Insider trade

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using confidential information to gain from the purchase or sale of stocks

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Lowest level of social responsibility to highest level of social responsibility

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obstructionist stance, defensive stance, accommodative stance, then proactive stance

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Obstructionist Stance

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involves doing as little as possible and may involve attempts to deny or cover up violations

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Defensive Stance

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company meets only minimum legal requirements in its commitments to groups and individuals in its social environment

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Accommodative Stance

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company, if specifically asked to do so, exceeds legal minimum in its commitments to groups and individuals in its social environment

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Proactive Stance

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Company actively seeks opportunities to contribute to the well-being of groups and individuals in its social environment

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For small businesses, ethical issues are questions of what?

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individual ethics

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In questions of social responsibility, they must ask themselves what?

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if they can afford a social agenda

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Regulation

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the establishment of laws and rules that dictate what organizations can and cannot do

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Direct regulation

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laws, individuals must follow

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Indirect regulation

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tax break for donating, not legally required to donate to charity

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What are the methods of addressing governmental pressures for more social responsibility?

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1. Personal Contacts 2. Lobbying 3. Political Action Committees 4. Favors

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Lobbying

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use of persons or groups to formally represent and organization or group go organizations before political bodies

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Political Action Committees

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(PACS) are special organizations created to solicit money and then distribute it to political candidates

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What do PACS do?

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they lobby

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Formal organizational dimensions that can help manage social responsibility are what?

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1. Legal Compliance 2. Ethical Compliance 3. Philanthropic Giving

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Legan Compliance

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the extent to which the organization conforms to local, state, federal,and international laws

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Ethical Compliance

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extent to which the members of the organization follow basic ethical standards of behavior

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Philanthropic Giving

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awarding of funds or gifts to charities or other worthy causes (about 5% given away from taxes)

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In evaluating social responsibility, what is corporate social audit?

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systematic analysis of a firm's success in using funds earmarked for meeting its social responsibility goals

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