Chapter 2 Business Ethics and Social Responsibility (PowerPoint) (BUSI 2301) (1)

Chapter 2: Business Ethics and Social Responsibility

Introduction

• Business Ethics: The use of ethical principles to address business dilemmas.

• Social Responsibility: The expectations imposed by the community on businesses operating within its borders.

• Ethical Dilemma: A situation requiring a choice between equally disappointing alternatives, evaluating consequences for various stakeholders.

Vocabulary Relating to Business Ethics and Social Responsibility

• Ethics: The study and practice of choices regarding what is good or right.

• Values: Positive abstractions defining what is good and desirable; can stem from sources like tradition, family, religion, and reason.

  • Example of Values: Honesty.

• Community Expectations: societal standards that can evolve over time.

Primary Values in Business Ethics

1. Freedom

   • Acting without restrictions from imposed rules.

   • Having resources to act as one chooses.

   • A state of escape from worldly demands.

2. Security

   • Possessing adequate goods to meet basic needs.

   • Being safe from interference in property rights.

   • Achieving psychological self-confidence to embrace risks.

3. Justice

   • Receiving the products of one's labor.

   • Treating individuals fairly irrespective of distinctions (race, religion, class, etc.).

   • Distributing resources according to need.

   • Ownership granted by mutual agreement.

4. Efficiency

   • Maximizing societal wealth.

   • Optimizing output from resources.

   • Minimizing operational costs.

Ethics and the Law

• Legal Compliance: Knowledge of the law is crucial for ethical decision-making.

  • Legal compliance is necessary but alone does not ensure ethical integrity.

The WH Approach in Ethical Decision Making

• WH Approach: A framework guiding businesspersons to evaluate the effects and morality of their actions.

  • Considerations include:

    • Whom does the action affect? (stakeholders)

    • How shall the decision be made? (guidelines)

Stakeholders in Ethical Decision Making

• Definition of Stakeholders: Groups impacted by a firm's decisions. Common stakeholders include:

  • Consumers

  • Owners/Investors

  • Management

  • Employees

  • Community

  • Future Generations

Guidelines for Ethical Decision Making

• The Golden Rule: Treat others as you wish to be treated.

• Public Disclosure Test: Evaluate how one would feel if actions were made public.

• Universalization Test: Consider the ramifications if everyone acted similarly.

Interpreting the Golden Rule

• Guidelines for Consideration:

  • Reflect on reciprocity in interactions.

  • Consideration of feelings.

  • Treat others as rational beings deserving dignity.

  • Extend love and consideration to others.

  • Decision-making guided by moral insights.

  • Adhere to moral imperatives as per one’s beliefs.

Public Disclosure Test

• Evaluate actions through the lens of public scrutiny, envisioning their broadcast on media and their impact on stakeholders.

Universalization Test

• Analyze the broader implications of one’s actions by considering a world where such actions are commonplace.

Questions

• Open floor for any questions or clarifications pertaining to Business Ethics and Social Responsibility.