Business Ethics and Social Responsibility: Key Concepts and Norms

Ethics

Beliefs about what is right and wrong or good and bad, in actions that affect others

Business Ethics

ethical or unethical behaviors by employees in the context of their jobs

Ethical Behavior

behavior that conforms to individual beliefs and social norms about what is right and good

Unethical Behavior

Behavior that conforms to individual beliefs and social norms about what is defined as bad and wrong

Managerial Ethics

Standards of behavior that guide individual managers in their work

What does Managerial Ethics include?

Includes:

-Employees

-Employees to employer

-other economic agents, primary agents of interest: customers, competition, stockholders, suppliers, dealers, and unions

How to assess ethical behavior

1. Gather the relevant factual information

2. Analyze the facts to determine the most appropriate moral values

3. Make an ethical judgment based on how right or wrong the proposed activity or policy is

What are the four aspects of ethical norms?

Utility, rights, justice, caring

Utility

Does a particular act optimize the benefits to those who are affected by it? (Do all relevant parties receive "fair" benefits?)

Rights

Does it respect the rights of all individuals involved?

Justice

Is the act consistent with what is fair?

Caring

Is it consistent with people's responsibility to each other?

What are two of the most common approaches to formalizing top management commitment to ethical business practices?

-Adopting written codes

-Instituting ethics programs

Social Responsibilities

Overall, the way in which a business attempts to balance its commitments to relevant groups and individuals in its social environment

Organizational stakeholder

groups, individuals, and organizations that are directly affected by the practices of an organization and who therefore have a stake in its performance

What are the 5 main groups of stakeholders

Customers, Employees, Investors, Suppliers, and local & International Communities

Customers (stakeholder group)

treat customers fairly and honestly

Employees (stakeholder group)

treat employees fairly and respect their dignity and basic human needs

Investors (stakeholder group)

Follow proper accounting procedures; provide information to shareholders about financial performance

Suppliers (stakeholder group)

Create mutually beneficial partnership arrangements with suppliers

Local and International Communities (stakeholder group)

Involvement in programs and charities

The concept of Accountability

the expectation of an expanded role for business in protecting and enhancing the general welfare of society