5-1 Visit UMT online at © UMT 2004 MGT100Version: 11-10-04 Visit UMT online at INTRODUCTION TO BUSINESS University of Management

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INTRODUCTION TO INTRODUCTION TO BUSINESSBUSINESS

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CHAPTER 5:CHAPTER 5:Conducting Business Conducting Business Ethically and ResponsiblyEthically and Responsibly

Griffin, R. W. & Ebert, R. J. Business (7th ed.) © 2004 Prentice Hall.



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Visit UMT online at www.umtweb.eduVersion: 11-10-04


Chapter OutlineChapter Outline

Ethics in the Workplace

Social Responsibility

Areas of Social Responsibility

Implementing Social Responsibility Programs







What Is Ethics?What Is Ethics?

Beliefs about what is right and wrong or good and bad in actions that affect others







Ethics in the WorkplaceEthics in the Workplace

Ethical behavior is behavior conforming to generally accepted social norms concerning beneficial and harmful actions

Unethical behavior is behavior that does not conform to generally accepted social norms concerning beneficial and harmful actions







What Is Business Ethics?What Is Business Ethics?

Ethical or unethical behaviors by a manager or employer of an organization







Business and Managerial EthicsBusiness and Managerial Ethics

Managerial ethics are standards of behavior that guide individual managers in their work. Three broad categories:

Behavior toward Employees

Behavior toward the Organization

Behavior toward Other Economic Agents







Steps in Making Ethical JudgmentsSteps in Making Ethical Judgments




Expanded Model of Ethical Expanded Model of Ethical Judgment MakingJudgment Making




Company Practices and Business EthicsCompany Practices and Business Ethics

Adopting Written CodesMany companies have written codes that formally announce their intent to do business in an ethical manner.

Instituting Ethics ProgramsEthical responses can belearned through experience.




Core Principles and Organizational Core Principles and Organizational ValuesValues




What Is Social Responsibility?What Is Social Responsibility?

The attempt of a business to balance its commitments to groups and individuals in its environment, including customers, other businesses, employees, investors and local communities




What Are Organizational Stakeholders?What Are Organizational Stakeholders?

Those groups, individuals and organizations that are directly affected by the practices of an organization and who therefore have a stake in its performance




Major Corporate StakeholdersMajor Corporate Stakeholders




Areas of Social ResponsibilityAreas of Social Responsibility

Responsibility Towardthe Environment

Responsibility Toward Customers

Responsibility Toward Employees

Responsibility Toward Investors




Responsibility Toward the EnvironmentResponsibility Toward the Environment

Controlling pollution—the injection of harmful substances into the environment—is a significant challenge to contemporary business.

Air Pollution

Water Pollution

Land PollutionToxic Waste Disposal

Recycling




C02 Emissions, Past and FutureC02 Emissions, Past and Future




What Is Consumerism?What Is Consumerism?

Form of social activism dedicated to protecting the rights of consumers in their dealings with businesses




Basic Consumer RightsBasic Consumer Rights

1. Consumers have a right to safe products.

2. Consumers have a right to be informed about all relevant aspects of a product.

3. Consumers have a right to be heard.

4. Consumers have a right to choose what they buy.

5. Consumers have a right to be educated about purchases.

6. Consumers have a right to courteous service.




Unfair PricingUnfair Pricing

Collusion occurs when two or more firms agree to collaborate on such wrongful acts as price fixing

Price gouging is a response to increased demand with overly steep price increases




Ethics in AdvertisingEthics in Advertising

Food product labeling

Misleading product claims

Deceptive advertising

Morally objectionable advertising




Legal and Social CommitmentsLegal and Social Commitments

Businesses cannot practice illegal discrimination against people in any facet of the employment relationship.

Businesses should provide employees with equal opportunities for reward and advancement without regard to race, sex or other irrelevant factors.

Businesses should strive to ensure that the workplace is physically and socially safe.




What Is a Whistle-Blower?What Is a Whistle-Blower?

Employee who detects and tries to put an end to a company’s unethical, illegal or socially irresponsible actions by publicizing them




Responsibility Toward InvestorsResponsibility Toward Investors

Improper Financial ManagementCheck Kiting

Insider Trading

Misrepresentation of Finances




Implementing Social Responsibility Implementing Social Responsibility ProgramsPrograms

Critics of socially responsible business oppose any business activity that threatens profits.

Proponents of socially responsible business believe that corporations are citizens and should help to improve the lives of fellow citizens.




Approaches to Social ResponsibilityApproaches to Social Responsibility

Obstructionist stance involves the firm doing as little as possible and may involve attempts to deny or cover up violations

Defensive stance involves the firm meeting only minimum legal requirements in its commitments to groups and individuals in its social environment




Approaches to Social ResponsibilityApproaches to Social Responsibility

Accommodative stance involves the firm, if specifically asked to do so, exceeding legal minimums in its commitments to groups and individuals in its social environment

Proactive stance involves the firm actively seeking opportunities to contribute to the well being of groups and individuals in the firm’s social environment




Spectrum of Approaches to Social Spectrum of Approaches to Social ResponsibilityResponsibility




Top 15 Corporate FoundationsTop 15 Corporate Foundations




Establishing a Social Responsibility Establishing a Social Responsibility ProgramProgram

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5-1 Visit UMT online at © UMT 2004 MGT100Version: 11-10-04 Visit UMT online at INTRODUCTION TO BUSINESS University of Management