Chapter 2: Business Ethics

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What is business ethics?
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The application of moral standards to business situations.
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What is ethics?
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The study of right and wrong and of morality of the choices individuals make. An ethical decision is one that is “right” according to some standard of behavior
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Factors of Ethical Behavior
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Individual Factors Social Factors Opportunity
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Examples of Opportunity
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Presence of Opportunity Ethical Codes Enforcement
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True or False: Ethical Codes do not cover everything
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True: it is impossible to cover EVERYTHING in ethical codes
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What is whistle-blowing?
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Informing the press or government officials about unethical practices within one’s organization
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Define social responsibility
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The recognition that business activities have an impact on society and the consideration of that impact in business decision making
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Example of Social Responsibility
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BP cleaning up after the mess they created is _____
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What does Caveat Emptor means?
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Let the Buyer Beware
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When did the government really get involved?
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The Great Depression
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Who does social responsibility start with?
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Management
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True or False: Social Responsibility costs money?
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True and it is worth it 🙂
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How should companies deal with violations of the ethical code (two words).
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You always have to treat it in a CONSISTENT MANNER as well as BEING FIRM.
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What is conflict of interest?
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Issues arise when a businessperson takes advantage of a situation for personal gain rather than for the employer’s interest
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What is social responsibility?
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The recognition that business activities have an impact on society and the consideration of that impact in business decision making
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What are the two views of social responsibility?
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Socioeconomic and Economic Views
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What emphasis does socioeconomic view portray?
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The concept that business should emphasize not only profits but also the impact of its decisions on society
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What emphasis does economic view portray?
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The view that society will benefit most when business is left alone to produce and market profitable products that society needs
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Economic Model Primary Emphasis
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Production Exploitation of natural resources Internal, market-based decisions Economic return (profit) Firm’s or manager’s interest Minor role for government
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Socioeconomic Model Primary Emphasis
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Quality of life Conservation of natural resources Market-based decisions, with some community controls Balance of economic return and social return Firm’s and community’s interests Active government
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What is consumerism?
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A person who buys goods and services.
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What are the major forces of consumerism?
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What does the EEOC stand for?
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Equal Employment Opportunity Commission
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What do the EEOC do?
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EEOC enforces the federal law of prohibiting discrimination
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Right to Safety
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The products for consumers purchase must be safe for their intended use, must include thorough and explicit directions for proper use, and must be tested by the manufacturer for product quality and reliability
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Right to be Informed
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Consumers must have access to complete information about a product before they buy it.
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Right to Choose
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Consumers must have a choice of products, offered by different manufacturers and sellers, to satisfy a particular need.
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The Right to Be Heard
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Someone must be available who will listen and take appropriate action when customers complain.
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The Right to Consumer Education
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People are entitled to be fully informed about their rights as consumers.
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The Right to Courteous Service
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Consumers are entitled to convenience, courtesy, and respon-siveness from manufacturers and sellers
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Hardcore Unemployment
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Workers with little education or vocational training and a long history of unemployment
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What is Pollution?
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The contamination of water, air, or land through the actions of people in an industrialized society
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What is the EPA?
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The federal agency charged with enforcing laws affecting the environment
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What is a superfund
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Superfund program is responsible for cleaning up some of the nation’s most contaminated land and responding to environmental emergencies, oil spills and natural disasters. To protect public health and the environment, the Superfund program focuses on making a visible and lasting difference in communities, ensuring that people can live and work in healthy, vibrant places.
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What is noise pollution?
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Excessive noise can do physical harm
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How do you reduce noise pollution?
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Isolating the source of the noise Modifying machinery and equipment
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Steps of Developing and Implementing Social Responsibility
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Developing a program of social responsibility Secure the commitment of top executives Plan the program Appoint top-level executive as director to implement the plan Prepare a social audit Funding the program Pass program costs on to consumers as higher prices Absorb the program costs as a business expense Seek tax reductions or other incentives
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What is a social audit?
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A comprehensive report of what the organization has done and is doing with regard to social issues that affect it
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What are ethical concerns
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Fairness and Honesty
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Is false advertisements….are they unethical?
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Yes. Yes they are.
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True or False: Are bribes unethical?
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True.
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True or False: Those who are whistle blowers sometimes lose their job?
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True.
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The Sarbanes-Oxley Act does what?
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Protects the whistle-blowers
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What was the labor like in the early 1900s?
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No minimum wage No benefits No safety
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Reasons to improve product safety
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Customer Demand Costly Sue by the consumers and government
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Affirmative Action Program
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Plans designed to increase the number of minority employees at all levels within an organization
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What is NAB?
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National Alliance of Business (NAB) A joint business-government program to train the hard-core unemployed
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What are the fundamental issues of land pollution?
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Fundamental issues are how to restore damaged or contaminated land and how to protect unpolluted land from future damage
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Who pays for social responsibility?
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Taxpayers
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Can the social responsibility be paid for through the government.
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???

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