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2007 Prentice Hall2-1
Ethics and Corporate Social
Responsibility
Chapter 2
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Chapter 2 Objectives
After studying this chapter, you will be able to:
Discuss what it means to practice good business
and explain the three factors that influence
ethical behavior
Identify three steps that businesses are taking to
encourage ethical behavior
List four questions you might ask yourselfwhentrying to make an ethical decision
Explain the difference between an ethical
dilemma and ethical lapse
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Chapter 2 Objectives, cont.
Explain the controversy surrounding corporate
social responsibility
Discuss how a business can become more
socially responsible
Define sustainable development and explain the
strategic advantages ofmanaging with
sustainability as a priority
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Two Sets of Ideals
Social
ResponsibilityEthics
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What is Ethical Behavior?
Definition
Competing Fairly and
Honestly
Communicating
Truthfully
Not Causing Harm toOthers
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Competing Fairly and Honestly
Trade Secrets
Industrial Espionage
Pretexting
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Communicating Truthfully
Tell the Truth, Whole Truth and
Nothing but the Truth
Transparency
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Not Causing Harm to Others
Insider Trading
Conflict of Interest
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Corporate Fraud
2007 Prentice Hall 2-9
WorldComWorldCom
AdelphiaAdelphia
Ford andFord andFirestoneFirestone
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Corporate Fraud
2007 Prentice Hall 2-10
TycoTyco
EnronEnron
Arthur AndersenArthur Andersen
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Ethical Business Behavior
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Influential Factors
OrganizationalOrganizational
BehaviorBehavior
KnowledgeKnowledge
CulturalCulturalDifferencesDifferences
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Be an Ethical Leader
Lead by example
Dont tolerate
unethical behavior
Inspire concretely
Acknowledge reality
Communicate
Be honest
Hire good people
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The Four Questions
Is the decision legal?
Is it balanced?
Can you live with it?
Is it feasible?
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Ethical Situations
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Ethical Dilemma
Ethical Lapse
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Business and Society
Consumers expect benefits that require money.
Business generates a majority ofmoney in a
free-market economy.
Standard of living is generally derived from
profit-seeking companies.
Businesses cannot hope to operate profitably
without the many benefits provided by a safeand relatively predictable business environment.
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Corporate Social Responsibility
Perspectives Minimalist
Defensive
Cynical
Conscientious
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Efforts to Increase Social
Responsibility
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CauseCause--RelatedRelated
MarketingMarketing
CauseCause--RelatedRelated
MarketingMarketing
PhilanthropyPhilanthropyPhilanthropyPhilanthropySocialSocialAuditAuditSocialSocialAuditAudit
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Reduce Pollution
2007 Prentice Hall 2-18
Industrial DischargesIndustrial Discharges
VehicleVehicle EmissionsEmissions
ChemicalChemical SpillsSpills
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Responsibility Toward
Consumers
2007 Prentice Hall 2-19
Consumerism:Consumerism:
The right to safe products
The right to be informed
The right to choose
The right to be heard
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Responsibility Toward Investors
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Fair ProfitFair Profit
DistributionDistribution
Fair ProfitFair Profit
DistributionDistribution
SocialSocial
ResponsibilityResponsibility
SocialSocial
ResponsibilityResponsibility
EthicalEthical
BehaviorBehavior
EthicalEthical
BehaviorBehavior
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Responsibility Toward
Employees
Equal Opportunity
Civil Rights Act
EEOC
Affirmative Action
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Responsibility Toward
Employees
People with disabilities
ADA
OSHA
2007 Prentice Hall 2-22
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Global Responsibilities
Bribery
Environmental Abuse
Unscrupulous
Business Practices
2007 Prentice Hall 2-23