Chapter 5 - Ethics and Social Responsibility

What are ethics?

Standards of moral behavior accepted by society as right versus wrong.

What is an example of unethical behavior related to the Ontario Lottery and Gaming Corporation?

Failure to address retailers who collected tens of millions of dollars in jackpots between 1999-2006.

What was the Federal Government Sponsorship Scandal about?

$100 million was paid to Quebec agencies regarding the Quebec separation referendum.

What scandal involved unauthorized payments totaling $56 million to businesses in Libya?

SNC-Lavalin Scandal.

How does ethical behavior relate to individual actions?

Ethical behavior should be exhibited in daily lives, not just in business environments.

What is a strong relationship found among undergraduate students regarding ethics?

A correlation between academic dishonesty and dishonesty in the working world.

What is the first question in the ethical checklist?

Is It Legal?

What is the second question in the ethical checklist?

Is It Balanced?

What is the third question in the ethical checklist?

How Will It Make Me Feel About Myself?

What is the role of top management in managing business ethics?

Top management sets the tone for ethical behavior and instills corporate values.

What are some reasons to manage a business ethically?

Maintain reputation, retain customers, avoid lawsuits, reduce employee turnover, and satisfy stakeholders.

What are the two major categories of corporate ethics codes?

Compliance-based and integrity-based ethics codes.

What do compliance-based ethics codes emphasize?

Preventing unlawful behavior through increased control and penalizing wrongdoers.

What do integrity-based ethics codes focus on?

Defining guiding values, creating an environment for ethical behavior, and stressing shared accountability.

What is the Sarbanes-Oxley Act (SOX)?

Legislation established to prevent misconduct and improve corporate governance practices.

Who does the Sarbanes-Oxley Act apply to?

All publicly traded companies under the jurisdiction of the U.S. Securities and Exchange Commission.

What is the role of whistleblowers?

People who report illegal or unethical behavior among employees.

What is the Public Servants Protection Disclosure Act?

Legislation in Canada that protects whistleblowers in the public sector.

What is corporate social responsibility (CSR)?

The concern businesses have for the welfare of society based on integrity, fairness, and respect.

What is a common belief about a manager's role in business?

Some believe a manager's sole role is to compete and win, while others believe they have a responsibility to society.

What is the importance of ethical training in organizations?

To embed ethics into the corporate culture and ensure employees understand ethical standards.

What is one of the steps to improve ethics in a corporation?

Top management support.

What is another step to improve ethics in a corporation?

Establishing an ethics office.

What is the significance of monitoring reward systems in organizations?

To prevent unintended consequences that may lead to unethical behavior.

What is Corporate Philanthropy?

Charitable donations to non-profits.

Define Corporate Social Initiatives.

Enhanced forms of corporate philanthropy directly related to a company's core competencies.

What does Corporate Responsibility entail?

Acting responsibly within society, including ethical practices and environmental sustainability.

What is Corporate Policy?

A company's stance on social and political issues.

What commitment has Patagonia made since its founding in 1973?

Producing quality goods ethically by closely vetting suppliers and promoting fair labor practices.

What does Patagonia's corporate policy reflect?

A deep commitment to environmental activism.

What is the Triple Bottom Line (TBL)?

A framework for measuring corporate performance against economic, social, and environmental parameters.

What are the four basic rights of consumers?

1. The right to safety 2. The right to be informed 3. The right to choose 4. The right to be heard.

How does ethical behavior affect shareholder wealth?

It adds to shareholder wealth rather than subtracting from it.

What is Insider Trading?

Insiders using private company information to further their own fortunes or those of their family and friends.

What responsibility do businesses have to employees?

To create jobs and ensure that hard work and talent are fairly rewarded.

What is the most influential factor on a company's effectiveness and financial performance?

Human resource management.

What are businesses' responsibilities to society?

Creating new wealth and fostering social well-being for all stakeholders.

List some environmental issues businesses are criticized for.

Pesticides, waste disposal, clear-cut logging, deforestation, auto exhaust, conservation, recycling, ozone depletion, extinction of species, population explosion, nuclear proliferation and testing.

What is a social audit?

A systematic evaluation of an organization's progress toward implementing socially responsible programs.

What is the challenge of social auditing?

Establishing clear procedures for measuring the positive and negative effects of a company's actions.

What does Sustainable Development mean?

Integrating environmental, economic, and social considerations into decision making for current and future generations.

What is Fair Trade?

A social movement ensuring producers in developing countries are paid a fair price for their goods.

How can organizations assess their progress in social responsibility?

Through social audits.

The front-page test 

Would I be embarrassed if my decision became a headline?

The personal gain test 

Would I make the same decision if the outcome did not benefit me in the same way? 

The good night's sleep test 

Whether or not anyone else knows – will it allow me to have a good night's sleep? 

What is the most forceful way to communicate?

Enforcement

Ethics Practioners’ Association of Canada

Enable individuals to work successfully in the field of ethics by enhancing the quality and avaliability of ethics advice and services across Canada

Ethical consumerism

Companies provide products that appeal to peoples’ best selves

What are corporate social intiaitives more directly related to?

Company’s competencies

What does the book: Contened cows give better milk entail?

Performance of companies to the commitment and caring that outstanding companies demonstrate for their employees

What does ethical consumerism combine

Ethics with shopping

Ethisphere, is which type of watchdog group?

Socially conscious research organization

Which type of watchdog group hunts down violations and forces companies to comply?

Union officials

What do strong managers help instill into the corporation when setting examples of ethical behaviour?

Values

6 Step process to improve business ethics

1. Top management support

2. Expectations begin at the top

3. Ethics embedded into training

4. Ethics office set up

5. External stakeholders informed

6. There must be enforcement

Charitable donations to different non-profit groups, such as the Ronald McDonald Houses, can be attributed to which dimension of social responsibility?

Corporate philanthropy

Approximately how many Canadians are employed in the renewable energy sector?

300,000 Canadians