3. 2-3
Business Ethics and Social
Responsibility
• Business Ethics:
– The principles and standards that define
acceptable conduct in business
• Social Responsibility:
– A business’s obligation to maximize its
positive impact and minimize its negative
impact on society
4. 2-4
Recognizing an Ethical Issue
• An ethical issue is an identifiable problem,
situation, or opportunity that requires a
person to choose from among several
actions that may be evaluated as right or
wrong, ethical or unethical.
Did You Know?
The most common types of observed misconduct
are lying, withholding information, and abusive/
intimidating behavior.
5. 2-5
Reasons For Not Reporting
Observed Misconduct
1. Didn’t believe corrective action would be
taken
2. Feared retribution or retaliation from
supervisor or management
3. Feared they wouldn’t remain anonymous
4. Thought someone else would report the
misconduct
5. Didn’t know who to contact
Source: 2005 Ethics Resource Center- National Business Ethics Survey Report, p. 29.
12. 2-12
Three Factors that Influence
Business Ethics
Individual
Standards
and
Values
Individual
Standards
and
Values
Managers’
and
Coworkers’
Influence
Managers’
and
Coworkers’
Influence
Opportunity:
Codes and
Compliance
Requirements
Opportunity:
Codes and
Compliance
Requirements
Ethical/Unethical
Choices
in Business
Ethical/Unethical
Choices
in Business
13. 2-13
Codes of Ethics
• Formalized rules and standards that
describe what a company expects of its
employees
Did You Know?
Written ethics standards are more often found in
larger companies than smaller ones.
14. 2-14
Whistleblowing
• The act of an employee exposing the
employer’s wrongdoing to outsiders
– The media
– Government regulatory agencies
15. 2-15
The Facts on Business
Ethics Today
• Of employees surveyed:
– 86% reported that their organizations have
written standards of conduct
– 69% reported that their organizations offer
mandatory ethics training
– 65% reported that their organizations have a
place where they can seek ethics advice
Source: 2005 Ethics Resource Center- National Business Ethics Survey: How
Employees Perceive Ethics at Work.p.12-14.
16. 2-16
The Nature of Social
Responsibility
• Four Dimensions:
– Economic – earn profits
– Legal – comply with the law
– Ethical
• Not just “for profit” only
– Voluntary & Philanthropic
• Promote human welfare and goodwill
17. 2-17
The Pyramid of Social
Responsibility
Ethical Responsibilities
being ethical; doing what is right, just,
and fair; avoiding harm
Voluntary
Responsibilities
being a
“good corporate citizen;”
contributing to the
community and quality of life
Source: Adapted from Archie B. Carroll, “The Pyramid of Corporate Social Responsibility: Toward the Moral
Management of Organizational Stakeholders.” Business Horizons 34 (July/August 1991): 42.
Legal Responsibilities
obeying the law (society’s codification
of right and wrong)
Economic Responsibilities
being profitable
18. 2-18
Social Responsibility Issues
• Organizational relationships with owners and
stockholders:
– Profit and ROI
• Employee relations:
– Providing a safe workplace, adequate pay,
information about the company, listening to
grievances, and treating employees fairly
• Consumer relations:
– Respecting the rights of customers and providing
them with safe and satisfying products
19. 2-19
John F. Kennedy’s 1962
Consumer Bill of Rights
• The right to safety
• The right to be informed
• The right to choose
• The right to be heard
Did You Know?
John F. Kennedy was the 35th President of
the United States.
20. 2-20
Social Responsibility Issues
• Environmental issues:
– Animal rights
– Pollution
– Global warming
• Community relations:
– Responsibility to the general welfare of
the community
Did You Know?
In one year, Americans generated 230 million
tons of trash and recycled 23.5 percent of it.
21. 2-21
Responsibility of the Ethics
Officer
• Provide advice about ethics to employees and
management
• Distribute the company’s code of ethics
• Create and maintain an anonymous, confidential
service to answer questions about ethical issues
• Take action on ethics violations
• Review and modify the code of ethics as needed
22. 2-22
End of lecture ……..
• Assignment #3
• What are the questions which must be Considered in Determining
Whether an Action is Ethical or not in a business?
– See your text book
– Google it
– Code at least two examples
– Submission d/d 10th
January
– You are not allowed to ask for any extension in assignment date.
----------------------------------------------------------------------------------------
23. 2-23
Additional Discussion Questions
and Exercises
Imagine you are a salesperson. When does offering a
gift, such as basketball tickets, become a bribe rather
than just a sales practice?
24. 2-24
Chapter 2 Quiz
1. Which of the following has the greatest effect on
ethical behavior in organizations?
a. authority of an employee’s superiors
b. an employee’s perception of the ethics of coworkers and
managers
c. an employee’s personal beliefs about what is right or wrong
d. investors perceptions of ethics
2. Copying someone else’s work and presenting it as
your own is:
a. ethics
b. bribe
c. plagiarism
d. greenmail
25. 2-25
Chapter 2 Quiz
3. A code of ethics is:
a. a set of formalized rules and standards describing what the
company expects of its employees.
b. a government legislation enforced by government agencies.
c. a set of principles that describe what a person believes is
the right way to behave.
d. the impact of a business’s activities on society.
3. Which one of the following is NOT one of the four
rights provided in John F. Kennedy’s consumer bill of
rights?
a. right to safety
b. right to be inform
c. right to sue
d. right to choose
