Part 1, chapter 4: Business ethics and corporate social responsibility

ethics

the rules or standards governing the conduct of a person or group

practicing good business ethics involves, at a minimum

- competing fairly and honestly

- communicating truthfully

- not causing harm to others

forces that promote unethical behaviour

- management pressure and corporate culture

- a wilful blindness to harm

Strategies for supporting ethical behaviour

- start from the top

- define expectations and set an example

- craft a code of ethics with visible consequences

- train and support employees

- practice transparency

- provide feedback channels

- put your money where your morals are

code of ethics

a written statement that sets forth the principles that guide an organisation's decisions

transparency

the degree to which affected parties can observe relevant aspects of transactions and decisions

whistleblowing

the disclosure of information by a company insider that exposes illegal or unethical behaviour by others within the organisation

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 ethical arguments

conflicts of interest

situations in which competing loyalties can lead to ethical pases, such as when a business decision may be influenced by the potential for personal gain

6 well known approaches to resolving ethical dilemmas

1- justice

2. utilitarianism

3. individual rights

4. individual responsibilities

5. the common good

6. virtue

Corporate Social Responsibility (CSR)

the idea that business has obligations to society beyond the pursuit of profits

the relationship between business and society

- consumers in contemporary societies enjoy and expect a wide range of benefits from education and healthcare to use of credit and products that are safe to use. most of these benefits share an important characteristic. they require money

- profit-seeking companies are the economic engine that powers modern society; they generate the vast majority of the money in a nation's economy, either directly or indirectly(through their own taxes and purchases) or indirectly (through taxes and purchases made by the employees they support)

- 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

philanthropy

the donation of money, time, goods, or services to charitable, humanitarian, or educational institutions

Perspective (motivation to act)

- minimalist

- defensive

- cynical

- proactive

strategic CSR

social contributions that are directly aligned with a company's overall business strategy

Minimalist CSR

the only social responsibility of business is to pay taxes and obey the law

Defensive CSR

companies engage in CSR one after being shamed or forced into it

Cynical CSR

companies use CSR as a marketing ploy to distract attention from their self-centred behaviour

Proactive CSR

companies choose to be a force for good, above and beyond their responsibilities to pay taxes and follow the law

nongovernmental organisations (NGOs)

nonprofit groups that provide charitable services or promote social and environmental causes

purpose-driven business

any company that aspires to accomplish more than just make money from owners and investors

triple bottom line

- profit

- social contribution

- environmental sustainability

social license to operate

the minimum level of business practices that society demands from companies

ecology

the study of the relationship between organisms and the natural environment

steps businesses are taking to achieve the net zero carbon by 2050

- resource usage

- carbon reduction

- carbon capture

- carbon offsets and carbon markets

sustainable development

operating business in a manner that minimises pollution and resource depletion, ensuring that future generations will have vital resources

circular economy

model of resource usage that operates as a series of loops in which materials and products are continually reused, recycled, and repurposed rather than being used by one owner and then discarded

6 areas of consumer rights

- the right to buy safe products

- the right to be informed

- the right to choose which products to buy

- the right to be heard

- the right to digital security

- the right to equitable service

identity theft

a crime in which thieves steal personal information and use it to take out loans and commit other types of fraud

generational wealth

assets that can be passed down as they increase in value from one generation to the next, allowing each new generation in a family to benefit from the efforts of their parents and grandparents

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

companies committed to creating equitable workplaces are making a variety of moves

- reevaluating the hiring process from start to finish

- being careful about hiring for "fit"

- assessing retention policies and career-growth programs to make sure every employee is getting a fair shot at moving up

responsibilities businesses have toward their employees

- equality in employment opportunity

- fair compensation

- working conditions

living wage

the amount a family requires to recover its basic needs

ergonomics

the study of how people interact with computers and other machines

AI shares the two-sided nature of every major technology:

the power that enables it to be a positive force can also let it become a negative force. even with good intentions, it's impossible to foresee and control all the consequences that AI could unleash

ethical concerns with AI

- human biases embedded in AI systems

- lack of transparency and explainability

2 key issues (AI) are:

1. making AI more democratic and representative

2. establishing ethical guidelines that can be adopted industrywide