Chapter 4: Ethical & Socially Responsible Behavior

Ethics

Standards of moral behavior (right vs. wrong)

Laws

What gov has written to protect ourselves from fraud, theft & violence

How ethics are different from laws (2)

• Ethics: Focus on morality

• Laws: Focus on legal consequences of fraud, theft & violence

Compliance-Based Ethics Codes

Consequences for going against company standard

Integrity-Based Ethics Codes

Company standards where they expect employees to do right thing

Whistleblowers

Insiders who report illegal or unethical behavior

Why ethics codes are important in business

Ensures productive working environment & builds consumer trust

Corporate Philanthropy

Company socially aware & responsible (includes charitable donations)

Corporate Social Initiatives & ex (2)

• Directly relates to company’s competency, where company helps in terms of what they do

• Ex: If business has extra food, they give it out

Corporate Responsibility

Includes everything from hiring minority workers to making safe products (ex: tide pods having to put lock on case for children)

Corporate Policy

Takes on social and political issues

Social Audit

Systematic evaluation of an organization’s progress toward implementing socially responsible & responsive programs

Insider Trading

Unethical activity in which insiders use private company info to further their wealth or that of their family & friends

How can socially responsible behavior benefit a business?

Better brand reputation & customer loyalty = more money in long run