Chapter 9: Ethics, Corporate Social Responsibility, Environmental

involves the application of general ethical principles to the actions and decisions of businesses and the conduct of their personnel.

the most fundamental conceptions of right and wrong are universal and apply to members of all societies, all companies, and all businesspeople.

holds that differing religious beliefs, customs, and behavioral norm across countries and cultures give rise to multiples sets of standards concerning what is ethically right or wrong. These differing standards mean that whether business related actions are right or wrong depends on the prevailing local ethical standards.

universal ethical principles based on the collective views of multiple societies form a \"social contract\" that all individuals and organizations have a duty to observe in all situations. Within the boundaries of this social contract, local cultures or groups can specify what additional actions may or may not be ethically permissible.

occurs when managers take advantage of their position to further their own private interests rather than those of the firm.

the tendency for managers to focus excessively on short-term performance objectives at the expense of longer-term strategic objectives. It has negative implications for the likelihood of ethical lapses as well as company performance in the longer run.

to a company's duty to operate in an honorable manner, provide good working conditions for employees, encourage workforce diversity, be a good steward of the environment, and actively work to better the quality of life in the local communities where it operates and in society at large.

Making efforts to employ an ethical strategy and observe ethical principles in operating the business. Making charitable contributions, supporting community service endeavors, engaging in broader philanthropic initiatives, and reaching out to make a difference in the lives of the disadvantaged. Taking actions to protect the environment and, in particular, to minimize or eliminate any adverse impact on the environment stemming from the company's own business activities. Taking actions to create a work environment that enhances the quality of life for employees. Taking actions to build a workforce that is diverse with respect to gender, race, national origin, and other aspects that different people bring to the workplace.

defined by the specific combination of socially beneficial activities the company opts to support with its contributions of time, money, and other resources.

are those that meet the needs of the present without compromising the ability to meet the needs of the future.

consists of its deliberate actions to protect the environment, provide for the longevity of natural resources, maintain ecological support systems for future generations, and guard against ultimate endangerment of the planet.

Such actions can lead to increased buyer patronage A strong commitment to socially responsible behavior reduces the risk of reputation damaging incidents Socially responsible actions and sustainable business practices can lower costs and enhance employee recruiting and workforce retention. Opportunities for revenue enhancement may also come from CSR and environmental sustainability strategies. Well-conceived CSR strategies and sustainable business practices are in the best long term interest of shareholders.