Transcript Principles of Business, Marketing, and Finance

Chapter 4
Business
Ethics and
Social
Responsibility
Ethics
• Ethics = A set of moral principles by
which people conduct themselves
personally, socially, or professionally
• Code of Ethics = a professional’s or
company’s set of guidelines for
upholding ethical behavior.
• Business Ethics = rules that govern
how we do business
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Unethical Business Practices
• Bad for business
• Affects a business’s profits, customer
base, and employee loyalty
• Sweatshops = factories that pay poorly,
have unsafe working conditions, and
treat workers badly
• Example: Triangle Shirtwaist Factory
Company fire
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Social Responsibility
• Social Responsibility = obligation to do
what is best for the welfare of society
• Businesses have a responsibility to
consumers, workers, and society
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Making Decisions on Ethical
Issues
(do not need to write)
• Identify the ethical dilemma.
• Discover alternative actions.
• Decide who might be affected.
• List the probable effects of the
alternatives.
• Select the best alternative.
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Government’s Responsibility to
Customers
• FDA (Food and Drug Administration) =
a government agency that protects
consumers form dangerous or falsely
advertised products
Some others (you do not need to write)
• FTC (Federal Trade Commission
• CPSC (Consumer Product Safety Commission)
• USDA (United States Department of Agriculture)
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Business’ Responsibility to
Employees
• Equal Pay Act = a federal law requiring
that men and women be paid the same
wages for doing the same work.
• OSHA = division of the Department of
Labor that sets and enforces workrelated health and safety rules
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Business’ Responsibility to
Society
• EPA (Environmental Protection Agency)
= a federal agency that enforces rules that
protect the environment and control pollution
• Conflict of Interest - when a business is
tempted to put profits before social welfare.
(When a person uses personal activities or
actions to advance his or her career at the
expense of another person)
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