Transcript Chapter 2 - Adeyl Khan

Business Ethics and Social Responsibility
Adeyl Khan, Faculty, BBA, NSU
Glossary!
 Profit
 Profit is the reward for businesspeople who take the
risk involved to offer goods and services to customers.
 Stakeholders
 Customers, investors, employees, and public affected
by or with an interest in a company
Adeyl Khan, Faculty, BBA, NSU
2
Walmart’s Ambitious Goals
“Sustanability 360” Initiatives
1) to be supplied 100 percent by renewable energy;
2) to create zero waste; and,
3) to sell products that sustain our resources and the
environment.
 Are these goals attainable? How?
 Choice: Profit or just benefits to employee,
customers, Environment/Society?
 Sustainable: long term, short term.
Adeyl Khan, Faculty, BBA, NSU
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Concern for Ethical and Societal Issues
 Business Ethics- The standards of conduct and moral
values governing actions and decisions in the work
environment.
 Social responsibility.
 Balance between what’s right and what’s profitable.
 Often no clear-cut choices. Your career!
 Often shaped by the organization’s ethical climate.
 Sarbanes-Oxley Act- 2002 law that added oversight for
the nation’s major companies and a special oversight
board to regulate public accounting firms that audit the
financial records of these corporations.
Adeyl Khan, Faculty, BBA, NSU
The Contemporary Ethical Environment
Corporate social responsibility
 High profile investigations and arrests in headlines.
 Vast majority of businesses ethical.
 New corporate officers charged with deterring
wrongdoing and ensuring ethical standards.
(Sarbanes-Oxley Act)- Table 2.1
 Johnson & Johnson Credo
Adeyl Khan, Faculty, BBA, NSU
•
Individuals can make the difference in
ethical expectations and behavior
– Putting own interest ahead of the
organization
– Lying to employee
– Misrepresenting hours
– Safety violations
– Internet Abuse
•
Technology is expanding unethical behavior
Adeyl Khan, Faculty, BBA, NSU
Adeyl Khan, Faculty, BBA, NSU
RMG from Bangladesh
Diamonds from Myanmar
Situation in which a business
decision may be influenced
for personal gain. (Doctors &
Labs)
Employee’s disclosure
of illegal, immoral, or
unethical practices in
the organization.
(Dumping tannery
garbage at burigange)
Adeyl Khan, Faculty, BBA, NSU
Telling the truth and
adhering to deeply felt
ethical principles in
business decisions.
(Embellishing resume,
take office resources!)
Businesspeople expect
employees to be loyal
and truthful, but ethical
conflicts may arise.
Adeyl Khan, Faculty, BBA, NSU
Statement of Values/
Code of Conduct
Formal statement that
defines how the
organization expects
and requires
employees to resolve
ethical questions.
Adeyl Khan, Faculty, BBA, NSU
Codes of conduct
cannot detail a solution
for every ethical
situation, so
corporations provide
training in ethical
reasoning.
Online assessment!
Adeyl Khan, Faculty, BBA, NSU
Helping employees
recognize and reason
through ethical
problems and turning
them into ethical
actions.
Adeyl Khan, Faculty, BBA, NSU
Reference card to help make ethical decisions
• Is the action legal?
• Does it comply with our values?
• If you do it, will you feel bad?
• How will it look in the newspaper?
• If you know it’s wrong, don’t do it!
• If you’re not sure, ask.
• Keep asking until you get an answer.
Adeyl Khan, Faculty, BBA, NSU
Executives must
demonstrate ethical
behavior in their
actions.
Adeyl Khan, Faculty, BBA, NSU
Acting Responsibly to Satisfy Society
 Social Responsibility
 Management’s consideration of profit, consumer
satisfaction, and societal well-being of equal
value in evaluating the firm’s performance.
 Contributions to the overall economy, job
opportunities, and charitable contributions
and service.
 Organizations measure through social
audits.
 Considering conservation, employment practices,
environmental protection and philanthropy
 Let outsiders measure- interest groups!
Compare with profit & employment
Adeyl Khan, Faculty, BBA, NSU
Adeyl Khan, Faculty, BBA, NSU
Responsibilities to the General Public
•
Public Health Issues. What to do about inherently dangerous
products such as alcohol, tobacco, vaccines, and steroids.
•
Protecting the Environment. Using resources efficiently,
minimizing pollution.
•
Recycling. Reprocessing used materials for reuse.
•
Developing the Quality of the Workforce. Enhancing quality of
the overall workforce through education and diversity initiatives.
•
Corporate Philanthropy. Cash contributions, donations of
equipment and products, and supporting the volunteer efforts of
company employees.
Adeyl Khan, Faculty, BBA, NSU
Responsibilities to Customers
• The Right to Be Safe. Safe operation of products,
avoiding product liability.
• The Right to Be Informed. Avoiding false or
misleading advertising and providing effective
customer service.
• The Right to Choose. Ability of consumers to
choose the products and services they want.
• The Right to Be Heard. Ability of consumers to
express legitimate complaints to the appropriate
parties.
Adeyl Khan, Faculty, BBA, NSU
Responsibilities to Employees
•
Workplace Safety. Monitored by Occupational Safety and Health
Administration.
•
Quality-of-Life Issues. Balancing work and family through
flexible work schedules, subsidized child care, and regulation such
as the Family and Medical Leave Act of 1993.
•
Ensuring Equal Opportunity on the Job. Providing equal
opportunities to all employees without discrimination; many
aspects regulated by law.
•
Age Discrimination. Age Discrimination in Employment Act of
1968 protects workers age 40 or older.
•
Sexual Harassment and Sexism. Avoiding unwelcome actions of
a sexual nature; equal pay for equal work without regard to gender.
Adeyl Khan, Faculty, BBA, NSU
Responsibilities to Investors
• Obligation to make profits for shareholders.
• Expectation of ethical and moral behavior.
• Investors protected by regulation by the
Securities and Exchange Commission
and state regulations.
Adeyl Khan, Faculty, BBA, NSU
Summary of learning goals
Business terms
Adeyl Khan, Faculty, BBA, NSU
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Do the case 2.1 (Honda …)
Adeyl Khan, Faculty, BBA, NSU
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1 Explain the concepts of business
5 Discuss how organizations shape
ethical behavior.
ethics and social responsibility.
2 Describe the factors that influence
6 Describe how businesses’ social
responsibility is measured.
business ethics.
3 List the stages in the development
of ethical standards.
7
Summarize the responsibilities of
business to the general public,
customers, and employees.
8
Explain why investors
are concerned with
business ethics and
social responsibility.
4 Identify common ethical dilemmas
in the workplace.
Adeyl Khan, Faculty, BBA, NSU