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.