Chapter+04+PowerPoint

Chapter Overview

• Title: Demanding Ethical and Socially Responsible Behavior

• Emphasis on learning as a transformative power in ethical practices.

Chapter Contents

• Main Topics Covered:

  • Ethics Is More Than Legality

  • Ethics Begins with Each of Us

  • Managing Businesses Ethically and Responsibly

  • Setting Corporate Ethical Standards

  • Corporate Social Responsibility

  • International Ethics and Social Responsibility

Learning Objectives

• LO 4-1: Importance of law as a baseline for ethics.

• LO 4-2: Three key questions for ethical decision-making.

• LO 4-3: Role of management in setting ethical standards.

• LO 4-4: Difference between compliance-based and integrity-based ethics codes.

• LO 4-5: Definition and comparison of corporate social responsibility (CSR) and stakeholders’ responsibilities.

• LO 4-6: Influence of U.S. businesses on global ethical behavior.

Ethics Is More than Legality

• Life after Scandal:

  • Industries facing scandals (real estate, banking).

  • Measures to restore trust:

    • Penalizing unlawful actions.

    • Promoting transparency in accounting.

    • Ethical considerations beyond legality.

• Ethical Standards Are Fundamental:

  • Definition of ethics as societal moral standards.

  • Influence of religion and the Golden Rule on ethical standards.

Ethics Begins with Each of Us

• Unethical Behavior in Various Domains:

  • Workplace: Violating safety standards.

  • Personal life: Lack of volunteerism.

  • Educational Setting: Plagiarism and its relation to workplace ethics.

• Ethical Dilemmas:

  • Choice between two unsatisfactory options.

    • Questions to ask:

      • Is my proposed action legal?

      • Is it balanced?

      • How will I feel about myself?

Managing Businesses Ethically and Responsibly

• Ethics Start at the Top:

  • Importance of management's role in establishing corporate values.

  • Necessity of trust based on fairness, honesty, and integrity.

  • Risks of ambitious goals leading to unethical behaviors.

Setting Corporate Ethical Standards

• Written Codes of Ethics:

  • Compliance-based ethics codes: Focus on legal adherence and punishment.

  • Integrity-based ethics codes: Emphasize values and foster ethical behavior.

Examples of Corporate Ethics Management

• Hershey Company’s Code of Ethics:

  • Commitments to consumers, marketplace, stockholders, and global community.

Features of Ethics Codes

• Compliance-based vs. Integrity-based:

  • Compliance: Avoids legal violations; controlled by laws.

  • Integrity: Promotes ethical standards and responsible conduct.

Steps to Improve Business Ethics

• Adoption of an explicit code of conduct.

• Employee education on ethical expectations.

• Ethical training for decision-making.

• Establishment of an ethics office for anonymous communication.

• Involvement of outsiders in ethical standards.

• Enforcement of ethics codes with timely action.

Corporate Social Responsibility (CSR)

• Definition: Concern for the welfare of society guided by integrity and fairness.

• Importance: Positive ethical reputation attracts employees and customers, fostering loyalty.

• Dimensions of Social Performance:

  • Corporate philanthropy: Charitable actions.

  • Social initiatives: Philanthropy linked to company competencies.

  • Corporate responsibility: Employment practices and product safety.

  • Corporate policy: Stance on social/political issues.

Positive Impacts of Corporate Actions

• Negative perceptions from scandals impact customer trust.

• Employee volunteerism in community support.

Responsibilities to Different Stakeholders

• Customers: Rights outlined by Kennedy (safety, information, choice, voice).

• Investors: Avoidance of unethical practices like insider trading.

• Employees: Fair treatment, job creation, and supportive benefits.

• Society/Environment: Corporate funding for nonprofits and eco-conscious practices.

Social Auditing

• Evaluation of organizational social responsibility progress.

• Five types of watchdogs: investors, research bodies, environmentalists, unions, consumers.

International Ethics and Social Responsibility

• Stricter standards for international conduct.

• Demand for responsible behavior across borders.

• Relevant regulations: Foreign Corrupt Practices Act, ISO 26000.

Conclusion

• The commitment to ethical behavior is essential for corporate success and societal welfare.