BMG100 Course 4

Introduction

  • Moral authority is derived from adherence to universal and timeless principles like honesty and integrity.— Stephen Covey

Course Overview

  • Course Title: BMG100 Understanding Business and Society

  • Instructor: Prof. Vincent Cloutier, MBA

  • Semester: Winter 2025

  • Institution: The Williams School of Business

Agenda for the Day

  • Discuss concepts of business ethics and social responsibility.

Learning Objectives

  • L01: Define business ethics and social responsibility and explore their importance.

  • L02: Identify ethical issues that can arise in business.

  • L03: Explore how businesses can encourage ethical behavior.

  • L04: Explain the four dimensions of social responsibility.

  • L05: Debate the social responsibilities of organizations towards owners, employees, consumers, the environment, and communities.

Business Ethics

  • Definition: Acceptability of behavior in business is feedback from various stakeholders: customers, competitors, government, regulators, interest groups, and individual moral principles.

  • Ethical behavior is often complex and influenced by stakeholder perspectives.

Social Responsibility

  • Definition: A business's obligation to enhance its positive impact and reduce negative impacts on society.

  • Growing significance indicated by a poll where 78% of Canadians would leave their jobs for a more environmentally friendly company.

Laws and Regulations

  • Purpose: To compel businesses to align with societal standards, values, and attitudes.

Unethical and/or Illegal Conduct

  • Examples include:

    • Unfair competition

    • Deceptive advertising

    • Fraud.

  • Key Question: Is unethical conduct necessarily illegal?

    • Not always.

Importance of Ethical Conduct

  • Ethical conduct is essential for:

    • Preventing negative publicity.

    • Avoiding declining sales and potential legal actions.

Ethical Issues

  • Definition: A problem or opportunity requiring a choice among actions that can be evaluated as ethical or unethical.

Judging Ethics in Situations

  • Consider the stakeholder perspectives, including customers and competitors.

  • Many require extensive experience to navigate ethical scenarios effectively.

  • Ethical interpretations can vary by culture (e.g., perceptions of bribery).

Sources of Unethical Behavior in Organizations

  • Primary sources include:

    • Aggressive financial objectives

    • Bullying and intimidation

    • Conflicts of interest.

  • Other aspects: fairness, honesty, communication, business relationships, and plagiarism.

Specific Sources of Unethical Behavior

  • Overly Aggressive Objectives: Can drive unethical practices.

  • Bullying: Creates an oppressive work environment.

  • Conflict of Interest: Prioritizing personal interests over company ethics, harming reputation and integrity.

  • Bribery: Attempts to influence decisions through payments or favors.

  • Fairness & Honesty: Essential in interactions, ensuring no harm to customers and accurate representations.

Ethical Issues in Communication

  • Concerns include:

    • Misleading advertising

    • Deceptive sales tactics

    • Product safety

    • Misleading claims and labeling.

Ethical Relationships in Business

  • Key considerations:

    • Maintaining professional relationships with customer, supplier, and colleague integrity.

    • Guards against undue pressures that might encourage unethical actions.

Plagiarism

  • Defined as using someone else's work without proper attribution.

  • Issues prevalent in education and business:

    • Copying in schools

    • Misattributing credit in workplace projects.

Code of Ethics

  • An essential document outlining an organization’s ethical principles and guidelines.

Developing a Code of Ethics

  • Critical elements must be considered to create effective ethical guidelines.

Whistleblowing

  • Definition: Reporting wrongdoing by one’s employer to external entities such as media or regulatory agencies.

  • Revenue Canada encourages tips through a reward system for whistleblowers to combat tax evasion.

Influences on Ethical Decisions in Organizations

  • Three key factors shape ethical decision-making processes.

Nature of Social Responsibility

  • Defined as the extent to which businesses fulfill their legal, ethical, economic, and voluntary responsibilities to stakeholders.

Four Dimensions of Social Responsibility

  1. Economic: Pursuing profit.

  2. Legal: Complying with laws.

  3. Ethical: Acting in a fair and just manner.

  4. Voluntary: Engaging in non-mandatory activities that promote societal welfare.

Stakeholder Relationships - Shareholders

  • Focus on profit returns while ensuring accountability and protecting owner rights and investments.

Stakeholder Relationships - Employees

  • Essential commitment to creating a fair workplace environment.

Stakeholder Relationships - Consumers

  • Definition of Consumerism: The movement to protect consumer rights.

  • Key Consumer Expectations:

    • Quality products

    • Fair pricing

    • Transparency

    • Ethical marketing practices.

Stakeholder Relationships - The Environment

  • Companies are responding proactively to environmental concerns.

Response to Environmental Issues

  • Many organizations strive to minimize wasteful practices and improve sustainability.

  • Notable firms (e.g., Irving Group, Suncor, RIM) have initiated new roles dedicated to environmental responsibility to achieve business goals and gain efficiency.

Conclusion

  • Engaging in ethical practices and being socially responsible vary by organization but create long-term benefits.

  • Questions?

Upcoming Tasks

  • Quizzes:

    • Quiz No.1 available until January 24th, 5:00 PM

    • Quiz No.2 available until January 28th, 5:00 PM

  • Course 5: Starting January 22nd, includes practical simulation exercises.