Business in Business in Action 6e Action 6e Bovée/ThillBovée/Thill
Business Ethics Business Ethics and Corporateand Corporate
Social Social ResponsibilityResponsibility
Chapter 4Chapter 4
Learning Objectives
1. Discuss what it means to practice good business ethics and highlight three factors that influence ethical decision-making
2. Define Corporate Social Responsibility (CSR) and explain the difference between philanthropy and strategic CSR
3. Distinguish among the four perspectives on corporate social responsibility
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Learning Objectives
4. Discuss the role of business in protecting the natural environment and define sustainable development
5. Identify four fundamental consumer rights and the responsibility of business to respect them
6. Explain the responsibilities businesses have toward their employees
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Public Perceptions of Business Ethics
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What is Ethical Behavior?
Ethics The rules or
standards governing the conduct of a person or group
Transparency The degree to
which affected parties can observe relevant aspects of transactions or decisions
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What is Ethical Behavior? (cont.)
Competing fairly and honestlyCommunicating truthfullyBeing transparentNot causing harm to others
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Factors Influencing Ethical Behavior
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Organizational Behavior
Code of Ethics A written statement that sets forth the
principles that guide an organization’s decisions
Whistle-Blowing The disclosure of information by a company
insider that exposes illegal or unethical behavior by others within the organization
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AT & T Code of Ethics (excerpts)
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Ethical Decision Making
Ethical Lapse A situation in which an individual or a group
makes a decision that is morally wrong, illegal, or unethical
Ethical Dilemma A situation in which more than one side of an
issue can be supported with valid arguments
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Finding the Right Answer When Faced with an Ethical Dilemma
Make sure you frame the situation accurately, taking into account all relevant issues and questions.
Identify all parties who might be affected by your decision
Be as objective as possible
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Finding the Right Answer When Faced with an Ethical Dilemma (cont.)
Don’t assume that other people think the way you do
Watch out for conflicts of interest
Conflict of interest A situation in which competing loyalties can lead
to ethical lapses, such as when a business decision may be influenced by the potential for personal gain
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Approaches to Resolving Ethical Dilemmas
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Corporate Social Responsibility
Corporate Social Responsibility (CSR) The idea that business has obligations to
society beyond the pursuit of profits
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The Relationship between Business and Society
Consumers in contemporary societies enjoy and expect a wide range of benefits, from education and health care to credit and products that are safe to use
Profit-seeking companies are the economic engine that powers modern society; they generate the vast majority of the money in a nation’s economy
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The Relationship between Business and Society (cont.)
Much of what we consider when assessing a society’s standard of living involves goods and services created by profit-seeking companies
Companies cannot hope to operate profitably without the many benefits provided by a stable, functioning society
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Philanthropy vs. Strategic CSR
Philanthropy The donation of money, time, goods, or
services to charitable, humanitarian, or educational institutions
Strategic CSR Social contributions that are directly aligned
with a company’s overall business strategy
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Perspectives on Corporate Social Responsibility
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CSR: The Natural Environment
First, the creation, delivery, use, and disposal of products that society values virtually always generate pollution and consume natural resources
Second, “environmental” causes are oft en as much about human health and safety as they are about forests, rivers, and wildlife.
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CSR: The Natural Environment (cont.)
Third, many of these issues often require tough trade-offs, occasional sacrifice, disruptive change, and decision making in the face of uncertainty.
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Green and Clean? Where Our Electricity Comes From
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Efforts to Conserve Resources and Reduce Pollution
Cap and Trade A type of environmental policy that gives
companies some freedom in addressing the environmental impact of specified pollutants, by either reducing emissions to meet a designated cap or buying allowances to offset excess emissions
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Major Federal Environmental Legislation
Clean Air Act (1963)Solid Waste Disposal Act (1965)Clean Water Act (1972)Toxic Substances Control Act (1976)Nuclear Waste Policy Act (1982)Oil Pollution Act (1990)
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The Trend Towards Sustainability
Sustainable Development Operating business in a manner that
minimizes pollution and resource depletion, ensuring that future generations will have vital resources
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CSR: Consumers
Consumerism A movement that pressures businesses to
consider consumer needs and interests
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CSR: Consumers (cont.)
The right to buy safe products – and to buy them safely
The right to be informedThe right to choose which products to buyThe right to be heard
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CSR: Employees
Discrimination In a social and economic sense, denial of
opportunities to individuals on the basis of some characteristic that has no bearing on their ability to perform in a job
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CSR: Employees (cont.)
Affirmative Action Activities undertaken by businesses to recruit
and promote members of groups whose economic progress has been hindered through either legal barriers or established practices
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Fatal Occupational Injuries
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Applying What You’ve Learned
1. Discuss what it means to practice good business ethics and highlight three factors that influence ethical decision-making
2. Define corporate social responsibility (CSR) and explain the difference between philanthropy and strategic CSR
3. Distinguish among the four perspectives on corporate social responsibility
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Applying What You’ve Learned (cont.)
4. Discuss the role of business in protecting the natural environment and define sustainable development
5. Identify four fundamental consumer rights and the responsibility of business to respect them
6. Explain the responsibilities businesses have toward their employees
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324-32Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall
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