Business Ethics bull Defining ethics and business ethics

bull Influences and approaches to business ethics

bull Business ethics and Corporate Social Responsibility [CSR]

Lesson ObjectivesDefine business ethics

Identify the difference between business ethics and the law

Be aware of influences on business ethics

Recognise the importance of Business Ethics

Classify relationships between ethics and organisation

Explore approaches to business ethics

Know the links and difference between ethics and Corporate Social Responsibility

Distinguish ethical business practice through the supply chain

Review growing pressures for business to act ethically

Examine benefits and potential drawbacks of ethical business

What are Ethics

Moral guidelines which govern good behaviour

What is behaving Ethically

Ethical behaviour is doing what is morally right

Business ethics

bullBusiness ethics are moral principles that guide the way a business behaves The same principles that determine an individualrsquos actions also apply to business

bull it involves making decisions that align with that sense of right and wrong as well as with the law

Business ethics

bullThe value of what should be done and what should not be done from the business point of view

bullBusiness ethics involves adhering to legal regulatory professional and company standards keeping promises and commitments and abiding by general principles like fairness truth honesty and respect

Nature of business ethics

ComplexNo common consensus

Subjective

Frameworks for ethical decision making differ

from people to people and organisation to

organisation

Dynamic

- Dynamic nature of business decision-making

Interdependent

Ethical decision-making is dependent on many

factors and one decision affects others

We all have a moral compassAll of us have a different moral compass We have different values and beliefs about what is right and what is wrong what is good and bad etc

As you can imagine ndash even within organisations and even whole industries there will be variations between those perceptions

Business ethics is a highly subjective concept

Significant difference between ethics and the law ETHICS

About what is right and what is wrong

LAW

About what is lawful and what is unlawful

Depending on your moral compass you may come across various examples where you feel a business is acting lawfully but not ethically

So a business may act lawfully but (depending on your moral compass) unethically

Payday loan companiesbull Financial services business which are now increasingly regulated

following numerous scandals but many are still unregulatedbull Called pay day loans companies because they provide short-term

loans at extortionate rates to some of the most desperate and vulnerable people of society ndash many of whom have not other access to access emergency or other finance

Watch the video and read the case study about the Church of England being discovered to have invested in payday loan company Wonga It was legal ndash but was it unethical

Lawful but unethical Tax Avoidance

Ensuring that you donrsquot pay taxes you donrsquot have to pay is entirely legal Tax law is very complex but clear

Multinationals like Google Starbucks Amazon and many others are becoming increasingly criticised for their complex tax planning arrangements to minimise the amount of tax they pay

Watch the video and read the case study on Starbucks government investigation into their financial accountancy practices MP Margaret Hodge was quoted as saying ldquowe are not accusing you of being illegal we are accusing you of being immoralrdquo Unethical

Lesson ObjectivesDefine business ethics

Identify the difference between business ethics and the law

Be aware of influences on business ethics

Recognise the importance of Business Ethics

Classify relationships between ethics and organisation

Explore approaches to business ethics

Know the links and difference between ethics and Corporate Social Responsibility

Distinguish ethical business practice through the supply chain

Review growing pressures for business to act ethically

Examine benefits and potential drawbacks of ethical business

What are Ethics

Moral guidelines which govern good behaviour

What is behaving Ethically

Ethical behaviour is doing what is morally right

Business ethics

bullBusiness ethics are moral principles that guide the way a business behaves The same principles that determine an individualrsquos actions also apply to business

bull it involves making decisions that align with that sense of right and wrong as well as with the law

Business ethics

bullThe value of what should be done and what should not be done from the business point of view

bullBusiness ethics involves adhering to legal regulatory professional and company standards keeping promises and commitments and abiding by general principles like fairness truth honesty and respect

Nature of business ethics

ComplexNo common consensus

Subjective

Frameworks for ethical decision making differ

from people to people and organisation to

organisation

Dynamic

- Dynamic nature of business decision-making

Interdependent

Ethical decision-making is dependent on many

factors and one decision affects others

We all have a moral compassAll of us have a different moral compass We have different values and beliefs about what is right and what is wrong what is good and bad etc

As you can imagine ndash even within organisations and even whole industries there will be variations between those perceptions

Business ethics is a highly subjective concept

Significant difference between ethics and the law ETHICS

About what is right and what is wrong

LAW

About what is lawful and what is unlawful

Depending on your moral compass you may come across various examples where you feel a business is acting lawfully but not ethically

So a business may act lawfully but (depending on your moral compass) unethically

Payday loan companiesbull Financial services business which are now increasingly regulated

following numerous scandals but many are still unregulatedbull Called pay day loans companies because they provide short-term

loans at extortionate rates to some of the most desperate and vulnerable people of society ndash many of whom have not other access to access emergency or other finance

Watch the video and read the case study about the Church of England being discovered to have invested in payday loan company Wonga It was legal ndash but was it unethical

Lawful but unethical Tax Avoidance

Ensuring that you donrsquot pay taxes you donrsquot have to pay is entirely legal Tax law is very complex but clear

Multinationals like Google Starbucks Amazon and many others are becoming increasingly criticised for their complex tax planning arrangements to minimise the amount of tax they pay

Watch the video and read the case study on Starbucks government investigation into their financial accountancy practices MP Margaret Hodge was quoted as saying ldquowe are not accusing you of being illegal we are accusing you of being immoralrdquo Unethical

What are Ethics

Moral guidelines which govern good behaviour

What is behaving Ethically

Ethical behaviour is doing what is morally right

Business ethics

bullBusiness ethics are moral principles that guide the way a business behaves The same principles that determine an individualrsquos actions also apply to business

bull it involves making decisions that align with that sense of right and wrong as well as with the law

Business ethics

bullThe value of what should be done and what should not be done from the business point of view

bullBusiness ethics involves adhering to legal regulatory professional and company standards keeping promises and commitments and abiding by general principles like fairness truth honesty and respect

Nature of business ethics

ComplexNo common consensus

Subjective

Frameworks for ethical decision making differ

from people to people and organisation to

organisation

Dynamic

- Dynamic nature of business decision-making

Interdependent

Ethical decision-making is dependent on many

factors and one decision affects others

We all have a moral compassAll of us have a different moral compass We have different values and beliefs about what is right and what is wrong what is good and bad etc

As you can imagine ndash even within organisations and even whole industries there will be variations between those perceptions

Business ethics is a highly subjective concept

Significant difference between ethics and the law ETHICS

About what is right and what is wrong

LAW

About what is lawful and what is unlawful

Depending on your moral compass you may come across various examples where you feel a business is acting lawfully but not ethically

So a business may act lawfully but (depending on your moral compass) unethically

Payday loan companiesbull Financial services business which are now increasingly regulated

following numerous scandals but many are still unregulatedbull Called pay day loans companies because they provide short-term

loans at extortionate rates to some of the most desperate and vulnerable people of society ndash many of whom have not other access to access emergency or other finance

Watch the video and read the case study about the Church of England being discovered to have invested in payday loan company Wonga It was legal ndash but was it unethical

Lawful but unethical Tax Avoidance

Ensuring that you donrsquot pay taxes you donrsquot have to pay is entirely legal Tax law is very complex but clear

Multinationals like Google Starbucks Amazon and many others are becoming increasingly criticised for their complex tax planning arrangements to minimise the amount of tax they pay

Watch the video and read the case study on Starbucks government investigation into their financial accountancy practices MP Margaret Hodge was quoted as saying ldquowe are not accusing you of being illegal we are accusing you of being immoralrdquo Unethical

What is behaving Ethically

Ethical behaviour is doing what is morally right

Business ethics

bullBusiness ethics are moral principles that guide the way a business behaves The same principles that determine an individualrsquos actions also apply to business

bull it involves making decisions that align with that sense of right and wrong as well as with the law

Business ethics

bullThe value of what should be done and what should not be done from the business point of view

bullBusiness ethics involves adhering to legal regulatory professional and company standards keeping promises and commitments and abiding by general principles like fairness truth honesty and respect

Nature of business ethics

ComplexNo common consensus

Subjective

Frameworks for ethical decision making differ

from people to people and organisation to

organisation

Dynamic

- Dynamic nature of business decision-making

Interdependent

Ethical decision-making is dependent on many

factors and one decision affects others

We all have a moral compassAll of us have a different moral compass We have different values and beliefs about what is right and what is wrong what is good and bad etc

As you can imagine ndash even within organisations and even whole industries there will be variations between those perceptions

Business ethics is a highly subjective concept

Significant difference between ethics and the law ETHICS

About what is right and what is wrong

LAW

About what is lawful and what is unlawful

Depending on your moral compass you may come across various examples where you feel a business is acting lawfully but not ethically

So a business may act lawfully but (depending on your moral compass) unethically

Payday loan companiesbull Financial services business which are now increasingly regulated

following numerous scandals but many are still unregulatedbull Called pay day loans companies because they provide short-term

loans at extortionate rates to some of the most desperate and vulnerable people of society ndash many of whom have not other access to access emergency or other finance

Watch the video and read the case study about the Church of England being discovered to have invested in payday loan company Wonga It was legal ndash but was it unethical

Lawful but unethical Tax Avoidance

Ensuring that you donrsquot pay taxes you donrsquot have to pay is entirely legal Tax law is very complex but clear

Multinationals like Google Starbucks Amazon and many others are becoming increasingly criticised for their complex tax planning arrangements to minimise the amount of tax they pay

Watch the video and read the case study on Starbucks government investigation into their financial accountancy practices MP Margaret Hodge was quoted as saying ldquowe are not accusing you of being illegal we are accusing you of being immoralrdquo Unethical

Business ethics

bullBusiness ethics are moral principles that guide the way a business behaves The same principles that determine an individualrsquos actions also apply to business

bull it involves making decisions that align with that sense of right and wrong as well as with the law

Business ethics

bullThe value of what should be done and what should not be done from the business point of view

bullBusiness ethics involves adhering to legal regulatory professional and company standards keeping promises and commitments and abiding by general principles like fairness truth honesty and respect

Nature of business ethics

ComplexNo common consensus

Subjective

Frameworks for ethical decision making differ

from people to people and organisation to

organisation

Dynamic

- Dynamic nature of business decision-making

Interdependent

Ethical decision-making is dependent on many

factors and one decision affects others

We all have a moral compassAll of us have a different moral compass We have different values and beliefs about what is right and what is wrong what is good and bad etc

As you can imagine ndash even within organisations and even whole industries there will be variations between those perceptions

Business ethics is a highly subjective concept

Significant difference between ethics and the law ETHICS

About what is right and what is wrong

LAW

About what is lawful and what is unlawful

Depending on your moral compass you may come across various examples where you feel a business is acting lawfully but not ethically

So a business may act lawfully but (depending on your moral compass) unethically

Payday loan companiesbull Financial services business which are now increasingly regulated

following numerous scandals but many are still unregulatedbull Called pay day loans companies because they provide short-term

loans at extortionate rates to some of the most desperate and vulnerable people of society ndash many of whom have not other access to access emergency or other finance

Watch the video and read the case study about the Church of England being discovered to have invested in payday loan company Wonga It was legal ndash but was it unethical

Lawful but unethical Tax Avoidance

Ensuring that you donrsquot pay taxes you donrsquot have to pay is entirely legal Tax law is very complex but clear

Multinationals like Google Starbucks Amazon and many others are becoming increasingly criticised for their complex tax planning arrangements to minimise the amount of tax they pay

Watch the video and read the case study on Starbucks government investigation into their financial accountancy practices MP Margaret Hodge was quoted as saying ldquowe are not accusing you of being illegal we are accusing you of being immoralrdquo Unethical

Business ethics

bullThe value of what should be done and what should not be done from the business point of view

bullBusiness ethics involves adhering to legal regulatory professional and company standards keeping promises and commitments and abiding by general principles like fairness truth honesty and respect

Nature of business ethics

ComplexNo common consensus

Subjective

Frameworks for ethical decision making differ

from people to people and organisation to

organisation

Dynamic

- Dynamic nature of business decision-making

Interdependent

Ethical decision-making is dependent on many

factors and one decision affects others

We all have a moral compassAll of us have a different moral compass We have different values and beliefs about what is right and what is wrong what is good and bad etc

As you can imagine ndash even within organisations and even whole industries there will be variations between those perceptions

Business ethics is a highly subjective concept

Significant difference between ethics and the law ETHICS

About what is right and what is wrong

LAW

About what is lawful and what is unlawful

Depending on your moral compass you may come across various examples where you feel a business is acting lawfully but not ethically

So a business may act lawfully but (depending on your moral compass) unethically

Payday loan companiesbull Financial services business which are now increasingly regulated

following numerous scandals but many are still unregulatedbull Called pay day loans companies because they provide short-term

loans at extortionate rates to some of the most desperate and vulnerable people of society ndash many of whom have not other access to access emergency or other finance

Watch the video and read the case study about the Church of England being discovered to have invested in payday loan company Wonga It was legal ndash but was it unethical

Lawful but unethical Tax Avoidance

Ensuring that you donrsquot pay taxes you donrsquot have to pay is entirely legal Tax law is very complex but clear

Multinationals like Google Starbucks Amazon and many others are becoming increasingly criticised for their complex tax planning arrangements to minimise the amount of tax they pay

Watch the video and read the case study on Starbucks government investigation into their financial accountancy practices MP Margaret Hodge was quoted as saying ldquowe are not accusing you of being illegal we are accusing you of being immoralrdquo Unethical

Nature of business ethics

ComplexNo common consensus

Subjective

Frameworks for ethical decision making differ

from people to people and organisation to

organisation

Dynamic

- Dynamic nature of business decision-making

Interdependent

Ethical decision-making is dependent on many

factors and one decision affects others

We all have a moral compassAll of us have a different moral compass We have different values and beliefs about what is right and what is wrong what is good and bad etc

As you can imagine ndash even within organisations and even whole industries there will be variations between those perceptions

Business ethics is a highly subjective concept

Significant difference between ethics and the law ETHICS

About what is right and what is wrong

LAW

About what is lawful and what is unlawful

Depending on your moral compass you may come across various examples where you feel a business is acting lawfully but not ethically

So a business may act lawfully but (depending on your moral compass) unethically

Payday loan companiesbull Financial services business which are now increasingly regulated

following numerous scandals but many are still unregulatedbull Called pay day loans companies because they provide short-term

loans at extortionate rates to some of the most desperate and vulnerable people of society ndash many of whom have not other access to access emergency or other finance

Watch the video and read the case study about the Church of England being discovered to have invested in payday loan company Wonga It was legal ndash but was it unethical

Lawful but unethical Tax Avoidance

Ensuring that you donrsquot pay taxes you donrsquot have to pay is entirely legal Tax law is very complex but clear

Multinationals like Google Starbucks Amazon and many others are becoming increasingly criticised for their complex tax planning arrangements to minimise the amount of tax they pay

Watch the video and read the case study on Starbucks government investigation into their financial accountancy practices MP Margaret Hodge was quoted as saying ldquowe are not accusing you of being illegal we are accusing you of being immoralrdquo Unethical

We all have a moral compassAll of us have a different moral compass We have different values and beliefs about what is right and what is wrong what is good and bad etc

As you can imagine ndash even within organisations and even whole industries there will be variations between those perceptions

Business ethics is a highly subjective concept

Significant difference between ethics and the law ETHICS

About what is right and what is wrong

LAW

About what is lawful and what is unlawful

Depending on your moral compass you may come across various examples where you feel a business is acting lawfully but not ethically

So a business may act lawfully but (depending on your moral compass) unethically

Payday loan companiesbull Financial services business which are now increasingly regulated

following numerous scandals but many are still unregulatedbull Called pay day loans companies because they provide short-term

loans at extortionate rates to some of the most desperate and vulnerable people of society ndash many of whom have not other access to access emergency or other finance

Watch the video and read the case study about the Church of England being discovered to have invested in payday loan company Wonga It was legal ndash but was it unethical

Lawful but unethical Tax Avoidance

Ensuring that you donrsquot pay taxes you donrsquot have to pay is entirely legal Tax law is very complex but clear

Multinationals like Google Starbucks Amazon and many others are becoming increasingly criticised for their complex tax planning arrangements to minimise the amount of tax they pay

Watch the video and read the case study on Starbucks government investigation into their financial accountancy practices MP Margaret Hodge was quoted as saying ldquowe are not accusing you of being illegal we are accusing you of being immoralrdquo Unethical

Significant difference between ethics and the law ETHICS

About what is right and what is wrong

LAW

About what is lawful and what is unlawful

Depending on your moral compass you may come across various examples where you feel a business is acting lawfully but not ethically

So a business may act lawfully but (depending on your moral compass) unethically

Payday loan companiesbull Financial services business which are now increasingly regulated

following numerous scandals but many are still unregulatedbull Called pay day loans companies because they provide short-term

loans at extortionate rates to some of the most desperate and vulnerable people of society ndash many of whom have not other access to access emergency or other finance

Watch the video and read the case study about the Church of England being discovered to have invested in payday loan company Wonga It was legal ndash but was it unethical

Lawful but unethical Tax Avoidance

Ensuring that you donrsquot pay taxes you donrsquot have to pay is entirely legal Tax law is very complex but clear

Multinationals like Google Starbucks Amazon and many others are becoming increasingly criticised for their complex tax planning arrangements to minimise the amount of tax they pay

Watch the video and read the case study on Starbucks government investigation into their financial accountancy practices MP Margaret Hodge was quoted as saying ldquowe are not accusing you of being illegal we are accusing you of being immoralrdquo Unethical

So a business may act lawfully but (depending on your moral compass) unethically

Payday loan companiesbull Financial services business which are now increasingly regulated

following numerous scandals but many are still unregulatedbull Called pay day loans companies because they provide short-term

loans at extortionate rates to some of the most desperate and vulnerable people of society ndash many of whom have not other access to access emergency or other finance

Watch the video and read the case study about the Church of England being discovered to have invested in payday loan company Wonga It was legal ndash but was it unethical

Lawful but unethical Tax Avoidance

Ensuring that you donrsquot pay taxes you donrsquot have to pay is entirely legal Tax law is very complex but clear

Multinationals like Google Starbucks Amazon and many others are becoming increasingly criticised for their complex tax planning arrangements to minimise the amount of tax they pay

Watch the video and read the case study on Starbucks government investigation into their financial accountancy practices MP Margaret Hodge was quoted as saying ldquowe are not accusing you of being illegal we are accusing you of being immoralrdquo Unethical

Lawful but unethical Tax Avoidance

Ensuring that you donrsquot pay taxes you donrsquot have to pay is entirely legal Tax law is very complex but clear

Multinationals like Google Starbucks Amazon and many others are becoming increasingly criticised for their complex tax planning arrangements to minimise the amount of tax they pay

Watch the video and read the case study on Starbucks government investigation into their financial accountancy practices MP Margaret Hodge was quoted as saying ldquowe are not accusing you of being illegal we are accusing you of being immoralrdquo Unethical

Business ethics vary enormously

ldquoThe higher the buildings the lower the moralsrdquo

Noel Coward

Remember within any industry within any organisation there will be a variety of different approaches to morals

Perceptions surrounding business ethicsRules standards or Codes governing an individual or

organisation

Character Conscience

Being True to Oneself

Two key influences on business ethics INDIVIDUALS CULTURE

The behaviour of specific individuals acting unethically has a damaging effect through to individual management like a particular CEO

Ethics are to a large extent determined by the organisational culture of the organisation

Sources of ethical norms Many factors shape what individuals believe or feel is normalacceptable

Individual conscience

Opposites

Country

region

Profession

Industry

Society at large

Employer

Religious beliefs

Fellow workers

Friends

Family

Approaches to business ethics

Amoral Business

ndashseeks to win at all costs

- Anything is acceptable even breaking the law

Legalistic business

- Will obey the law but no more than that

Responsive business

- Accepts that being ethical can pay off

Ethical business

- Being ethical is at the core of the business

This is a useful theoretical model in comparing and contrasting levels of ethical business practice within organisations Can you identify examples for each of the above with businesses operating within the UK

Business ethics and CSRbull Clearly an overlap between CSR and business ethics

bull A socially responsible firm should be an ethical firm

bull An ethical firm should be socially responsible

bull However there is a distinction

- CSR is about responsibility to all stakeholders not just shareholders

- Ethics is about morally correct behaviour

As a result you will often see ethical codes of practice as part of CSR whereby companies seeking to show their corporate social responsibility will publish their ethical codes of practice to show how they achieve these objectives Look out for ethical practices used as part of CSR

Core arenarsquos of Social Responsibility

Businessrsquos Social

Responsibilities

General Public

Customers

Employees

Investors and

financial community

Responsibilities to the general publicPublic Health Issues What to do about inherently dangerous products such asalcohol tobacco vaccines and steroids

Protecting the Environment Using resources efficiently minimizing pollution

Recycling Reprocessing used materials for reuse

Developing the Quality of the Workforce Enhancing quality of the overall workforcethrough education and diversity initiatives

Corporate Philanthropy Cash contributions donations of equipment and productsand supporting the volunteer efforts of company employees

Responsibilities to customersThe Right to Be Safe Safe operation of products avoiding product liability

The Right to Be Informed Avoiding false or misleading advertising and providingeffective customer service

The Right to Choose Ability of consumers to choose the products and services theywant

The Right to Be Heard Ability of consumers to express legitimate complaints to the appropriate parties

Responsibilities to employees Workplace Safety Monitored by Occupational Safety and Health Administration

Quality-of-Life Issues Balancing work and family through flexible work schedules subsidized child care and regulation such as the Family and Medical Leave Act

Ensuring Equal Opportunity on the Job Providing equal opportunities to all employees without discrimination many aspects regulated by law

Age Discrimination Age Discrimination in Employment Act

Sexual Harassment and Sexism equal pay for equal work without regard to gender

Responsibilities to employees Provide adequate monetary psychological rewards as well as job security

Selection of employees should be made fairly

Providing educational opportunities amp training to the employee at companyrsquos expense

Working conditions should be safe amp pleasant

Responsibilities to Investors Investors protected by regulation by the Securities and Exchange Commission and state regulations

Resources available are used for the benefit of the ownersshareholders

Stability of the enterprise

Ensure that the company grows so that the shareholder gains from increase in the market price of his shares

Ethics and the supply chain bull A business cannot claim to be ethical if it ignores unethical practices by it rsquos suppliers ndash eg

- Use of child labour andor forced labour

- Production in sweatshops

- Violations of the basic rights of workers

- ignoring health safety and environmental standards

bull An ethical business has to be concerned with the behaviour of all businesses that operate in the supply chain ndash ie

- Suppliers

- Contractors

_ Distributers and sales agents

Pressures to act ethically Influence of pressure groups

bullPressure groups ndash are external stakeholders

bull Tend to focus on activities and ethical practice of multinationals or industries with ethical issues

bullCombination of direct and indirect action can damage the target business or industry

Consumer action

bull Consumers may take action againstbull - businesses acting irresponsibly

bull - Businesses they consider to be unethical (eg animal furs)

bull - Businesses using practices they find unacceptable

bull Consumer action can also be positive ndashsupporting businesses with a strong ethical stance

Pressure groups exerting increasing influence

Benefits and drawbacks of ethical behaviourBENEFITS

bull Higher revenue ndash demand from positive consumer support

bull Improved brand image and business awareness recognition

bullBetter employee motivation and recruitment

bullNew sources of finance ndash eg ethical investors

POTENTIAL DRAWBACKS

bullHigher costs ndash eg sourcing from Fairtrade suppliers rather than lowest price

bullHigher overheads ndash eg training amp communication of ethical policy

bullA danger of building up false expectations

ReflectionhellipbullCan businesses behave unethically expect to satisfy shareholders in the long-term

bullShould a business be allowed to act unethically provided that it delivers what customers want

bullDo you agree that big businesses can no longer be relied upon to behave ethically

bullWhat is more important ndash profit or ethics

Common areas where ethics are tested

Business ethics are embedded both within individuals and the culture of any organisation therefore business ethics enters into every aspect of business operation and behaviour However there are certain issues more commonly tested and reported about than othershellip

Main categories of ethical judgementinvestigation

Perceptions surrounding business ethicsRules standards or Codes governing an individual or

organisation

Character Conscience

Being True to Oneself

Two key influences on business ethics INDIVIDUALS CULTURE

The behaviour of specific individuals acting unethically has a damaging effect through to individual management like a particular CEO

Ethics are to a large extent determined by the organisational culture of the organisation

Sources of ethical norms Many factors shape what individuals believe or feel is normalacceptable

Individual conscience

Opposites

Country

region

Profession

Industry

Society at large

Employer

Religious beliefs

Fellow workers

Friends

Family

Approaches to business ethics

Amoral Business

ndashseeks to win at all costs

- Anything is acceptable even breaking the law

Legalistic business

- Will obey the law but no more than that

Responsive business

- Accepts that being ethical can pay off

Ethical business

- Being ethical is at the core of the business

This is a useful theoretical model in comparing and contrasting levels of ethical business practice within organisations Can you identify examples for each of the above with businesses operating within the UK

Business ethics and CSRbull Clearly an overlap between CSR and business ethics

bull A socially responsible firm should be an ethical firm

bull An ethical firm should be socially responsible

bull However there is a distinction

- CSR is about responsibility to all stakeholders not just shareholders

- Ethics is about morally correct behaviour

As a result you will often see ethical codes of practice as part of CSR whereby companies seeking to show their corporate social responsibility will publish their ethical codes of practice to show how they achieve these objectives Look out for ethical practices used as part of CSR

Core arenarsquos of Social Responsibility

Businessrsquos Social

Responsibilities

General Public

Customers

Employees

Investors and

financial community

Responsibilities to the general publicPublic Health Issues What to do about inherently dangerous products such asalcohol tobacco vaccines and steroids

Protecting the Environment Using resources efficiently minimizing pollution

Recycling Reprocessing used materials for reuse

Developing the Quality of the Workforce Enhancing quality of the overall workforcethrough education and diversity initiatives

Corporate Philanthropy Cash contributions donations of equipment and productsand supporting the volunteer efforts of company employees

Responsibilities to customersThe Right to Be Safe Safe operation of products avoiding product liability

The Right to Be Informed Avoiding false or misleading advertising and providingeffective customer service

The Right to Choose Ability of consumers to choose the products and services theywant

The Right to Be Heard Ability of consumers to express legitimate complaints to the appropriate parties

Responsibilities to employees Workplace Safety Monitored by Occupational Safety and Health Administration

Quality-of-Life Issues Balancing work and family through flexible work schedules subsidized child care and regulation such as the Family and Medical Leave Act

Ensuring Equal Opportunity on the Job Providing equal opportunities to all employees without discrimination many aspects regulated by law

Age Discrimination Age Discrimination in Employment Act

Sexual Harassment and Sexism equal pay for equal work without regard to gender

Responsibilities to employees Provide adequate monetary psychological rewards as well as job security

Selection of employees should be made fairly

Providing educational opportunities amp training to the employee at companyrsquos expense

Working conditions should be safe amp pleasant

Responsibilities to Investors Investors protected by regulation by the Securities and Exchange Commission and state regulations

Resources available are used for the benefit of the ownersshareholders

Stability of the enterprise

Ensure that the company grows so that the shareholder gains from increase in the market price of his shares

Ethics and the supply chain bull A business cannot claim to be ethical if it ignores unethical practices by it rsquos suppliers ndash eg

- Use of child labour andor forced labour

- Production in sweatshops

- Violations of the basic rights of workers

- ignoring health safety and environmental standards

bull An ethical business has to be concerned with the behaviour of all businesses that operate in the supply chain ndash ie

- Suppliers

- Contractors

_ Distributers and sales agents

Pressures to act ethically Influence of pressure groups

bullPressure groups ndash are external stakeholders

bull Tend to focus on activities and ethical practice of multinationals or industries with ethical issues

bullCombination of direct and indirect action can damage the target business or industry

Consumer action

bull Consumers may take action againstbull - businesses acting irresponsibly

bull - Businesses they consider to be unethical (eg animal furs)

bull - Businesses using practices they find unacceptable

bull Consumer action can also be positive ndashsupporting businesses with a strong ethical stance

Pressure groups exerting increasing influence

Benefits and drawbacks of ethical behaviourBENEFITS

bull Higher revenue ndash demand from positive consumer support

bull Improved brand image and business awareness recognition

bullBetter employee motivation and recruitment

bullNew sources of finance ndash eg ethical investors

POTENTIAL DRAWBACKS

bullHigher costs ndash eg sourcing from Fairtrade suppliers rather than lowest price

bullHigher overheads ndash eg training amp communication of ethical policy

bullA danger of building up false expectations

ReflectionhellipbullCan businesses behave unethically expect to satisfy shareholders in the long-term

bullShould a business be allowed to act unethically provided that it delivers what customers want

bullDo you agree that big businesses can no longer be relied upon to behave ethically

bullWhat is more important ndash profit or ethics

Common areas where ethics are tested

Business ethics are embedded both within individuals and the culture of any organisation therefore business ethics enters into every aspect of business operation and behaviour However there are certain issues more commonly tested and reported about than othershellip

Main categories of ethical judgementinvestigation

Two key influences on business ethics INDIVIDUALS CULTURE

The behaviour of specific individuals acting unethically has a damaging effect through to individual management like a particular CEO

Ethics are to a large extent determined by the organisational culture of the organisation

Sources of ethical norms Many factors shape what individuals believe or feel is normalacceptable

Individual conscience

Opposites

Country

region

Profession

Industry

Society at large

Employer

Religious beliefs

Fellow workers

Friends

Family

Approaches to business ethics

Amoral Business

ndashseeks to win at all costs

- Anything is acceptable even breaking the law

Legalistic business

- Will obey the law but no more than that

Responsive business

- Accepts that being ethical can pay off

Ethical business

- Being ethical is at the core of the business

This is a useful theoretical model in comparing and contrasting levels of ethical business practice within organisations Can you identify examples for each of the above with businesses operating within the UK

Business ethics and CSRbull Clearly an overlap between CSR and business ethics

bull A socially responsible firm should be an ethical firm

bull An ethical firm should be socially responsible

bull However there is a distinction

- CSR is about responsibility to all stakeholders not just shareholders

- Ethics is about morally correct behaviour

As a result you will often see ethical codes of practice as part of CSR whereby companies seeking to show their corporate social responsibility will publish their ethical codes of practice to show how they achieve these objectives Look out for ethical practices used as part of CSR

Core arenarsquos of Social Responsibility

Businessrsquos Social

Responsibilities

General Public

Customers

Employees

Investors and

financial community

Responsibilities to the general publicPublic Health Issues What to do about inherently dangerous products such asalcohol tobacco vaccines and steroids

Protecting the Environment Using resources efficiently minimizing pollution

Recycling Reprocessing used materials for reuse

Developing the Quality of the Workforce Enhancing quality of the overall workforcethrough education and diversity initiatives

Corporate Philanthropy Cash contributions donations of equipment and productsand supporting the volunteer efforts of company employees

Responsibilities to customersThe Right to Be Safe Safe operation of products avoiding product liability

The Right to Be Informed Avoiding false or misleading advertising and providingeffective customer service

The Right to Choose Ability of consumers to choose the products and services theywant

The Right to Be Heard Ability of consumers to express legitimate complaints to the appropriate parties

Responsibilities to employees Workplace Safety Monitored by Occupational Safety and Health Administration

Quality-of-Life Issues Balancing work and family through flexible work schedules subsidized child care and regulation such as the Family and Medical Leave Act

Ensuring Equal Opportunity on the Job Providing equal opportunities to all employees without discrimination many aspects regulated by law

Age Discrimination Age Discrimination in Employment Act

Sexual Harassment and Sexism equal pay for equal work without regard to gender

Responsibilities to employees Provide adequate monetary psychological rewards as well as job security

Selection of employees should be made fairly

Providing educational opportunities amp training to the employee at companyrsquos expense

Working conditions should be safe amp pleasant

Responsibilities to Investors Investors protected by regulation by the Securities and Exchange Commission and state regulations

Resources available are used for the benefit of the ownersshareholders

Stability of the enterprise

Ensure that the company grows so that the shareholder gains from increase in the market price of his shares

Ethics and the supply chain bull A business cannot claim to be ethical if it ignores unethical practices by it rsquos suppliers ndash eg

- Use of child labour andor forced labour

- Production in sweatshops

- Violations of the basic rights of workers

- ignoring health safety and environmental standards

bull An ethical business has to be concerned with the behaviour of all businesses that operate in the supply chain ndash ie

- Suppliers

- Contractors

_ Distributers and sales agents

Pressures to act ethically Influence of pressure groups

bullPressure groups ndash are external stakeholders

bull Tend to focus on activities and ethical practice of multinationals or industries with ethical issues

bullCombination of direct and indirect action can damage the target business or industry

Consumer action

bull Consumers may take action againstbull - businesses acting irresponsibly

bull - Businesses they consider to be unethical (eg animal furs)

bull - Businesses using practices they find unacceptable

bull Consumer action can also be positive ndashsupporting businesses with a strong ethical stance

Pressure groups exerting increasing influence

Benefits and drawbacks of ethical behaviourBENEFITS

bull Higher revenue ndash demand from positive consumer support

bull Improved brand image and business awareness recognition

bullBetter employee motivation and recruitment

bullNew sources of finance ndash eg ethical investors

POTENTIAL DRAWBACKS

bullHigher costs ndash eg sourcing from Fairtrade suppliers rather than lowest price

bullHigher overheads ndash eg training amp communication of ethical policy

bullA danger of building up false expectations

ReflectionhellipbullCan businesses behave unethically expect to satisfy shareholders in the long-term

bullShould a business be allowed to act unethically provided that it delivers what customers want

bullDo you agree that big businesses can no longer be relied upon to behave ethically

bullWhat is more important ndash profit or ethics

Common areas where ethics are tested

Business ethics are embedded both within individuals and the culture of any organisation therefore business ethics enters into every aspect of business operation and behaviour However there are certain issues more commonly tested and reported about than othershellip

Main categories of ethical judgementinvestigation

Sources of ethical norms Many factors shape what individuals believe or feel is normalacceptable

Individual conscience

Opposites

Country

region

Profession

Industry

Society at large

Employer

Religious beliefs

Fellow workers

Friends

Family

Approaches to business ethics

Amoral Business

ndashseeks to win at all costs

- Anything is acceptable even breaking the law

Legalistic business

- Will obey the law but no more than that

Responsive business

- Accepts that being ethical can pay off

Ethical business

- Being ethical is at the core of the business

This is a useful theoretical model in comparing and contrasting levels of ethical business practice within organisations Can you identify examples for each of the above with businesses operating within the UK

Business ethics and CSRbull Clearly an overlap between CSR and business ethics

bull A socially responsible firm should be an ethical firm

bull An ethical firm should be socially responsible

bull However there is a distinction

- CSR is about responsibility to all stakeholders not just shareholders

- Ethics is about morally correct behaviour

As a result you will often see ethical codes of practice as part of CSR whereby companies seeking to show their corporate social responsibility will publish their ethical codes of practice to show how they achieve these objectives Look out for ethical practices used as part of CSR

Core arenarsquos of Social Responsibility

Businessrsquos Social

Responsibilities

General Public

Customers

Employees

Investors and

financial community

Responsibilities to the general publicPublic Health Issues What to do about inherently dangerous products such asalcohol tobacco vaccines and steroids

Protecting the Environment Using resources efficiently minimizing pollution

Recycling Reprocessing used materials for reuse

Developing the Quality of the Workforce Enhancing quality of the overall workforcethrough education and diversity initiatives

Corporate Philanthropy Cash contributions donations of equipment and productsand supporting the volunteer efforts of company employees

Responsibilities to customersThe Right to Be Safe Safe operation of products avoiding product liability

The Right to Be Informed Avoiding false or misleading advertising and providingeffective customer service

The Right to Choose Ability of consumers to choose the products and services theywant

The Right to Be Heard Ability of consumers to express legitimate complaints to the appropriate parties

Responsibilities to employees Workplace Safety Monitored by Occupational Safety and Health Administration

Quality-of-Life Issues Balancing work and family through flexible work schedules subsidized child care and regulation such as the Family and Medical Leave Act

Ensuring Equal Opportunity on the Job Providing equal opportunities to all employees without discrimination many aspects regulated by law

Age Discrimination Age Discrimination in Employment Act

Sexual Harassment and Sexism equal pay for equal work without regard to gender

Responsibilities to employees Provide adequate monetary psychological rewards as well as job security

Selection of employees should be made fairly

Providing educational opportunities amp training to the employee at companyrsquos expense

Working conditions should be safe amp pleasant

Responsibilities to Investors Investors protected by regulation by the Securities and Exchange Commission and state regulations

Resources available are used for the benefit of the ownersshareholders

Stability of the enterprise

Ensure that the company grows so that the shareholder gains from increase in the market price of his shares

Ethics and the supply chain bull A business cannot claim to be ethical if it ignores unethical practices by it rsquos suppliers ndash eg

- Use of child labour andor forced labour

- Production in sweatshops

- Violations of the basic rights of workers

- ignoring health safety and environmental standards

bull An ethical business has to be concerned with the behaviour of all businesses that operate in the supply chain ndash ie

- Suppliers

- Contractors

_ Distributers and sales agents

Pressures to act ethically Influence of pressure groups

bullPressure groups ndash are external stakeholders

bull Tend to focus on activities and ethical practice of multinationals or industries with ethical issues

bullCombination of direct and indirect action can damage the target business or industry

Consumer action

bull Consumers may take action againstbull - businesses acting irresponsibly

bull - Businesses they consider to be unethical (eg animal furs)

bull - Businesses using practices they find unacceptable

bull Consumer action can also be positive ndashsupporting businesses with a strong ethical stance

Pressure groups exerting increasing influence

Benefits and drawbacks of ethical behaviourBENEFITS

bull Higher revenue ndash demand from positive consumer support

bull Improved brand image and business awareness recognition

bullBetter employee motivation and recruitment

bullNew sources of finance ndash eg ethical investors

POTENTIAL DRAWBACKS

bullHigher costs ndash eg sourcing from Fairtrade suppliers rather than lowest price

bullHigher overheads ndash eg training amp communication of ethical policy

bullA danger of building up false expectations

ReflectionhellipbullCan businesses behave unethically expect to satisfy shareholders in the long-term

bullShould a business be allowed to act unethically provided that it delivers what customers want

bullDo you agree that big businesses can no longer be relied upon to behave ethically

bullWhat is more important ndash profit or ethics

Common areas where ethics are tested

Business ethics are embedded both within individuals and the culture of any organisation therefore business ethics enters into every aspect of business operation and behaviour However there are certain issues more commonly tested and reported about than othershellip

Main categories of ethical judgementinvestigation

Approaches to business ethics

Amoral Business

ndashseeks to win at all costs

- Anything is acceptable even breaking the law

Legalistic business

- Will obey the law but no more than that

Responsive business

- Accepts that being ethical can pay off

Ethical business

- Being ethical is at the core of the business

This is a useful theoretical model in comparing and contrasting levels of ethical business practice within organisations Can you identify examples for each of the above with businesses operating within the UK

Business ethics and CSRbull Clearly an overlap between CSR and business ethics

bull A socially responsible firm should be an ethical firm

bull An ethical firm should be socially responsible

bull However there is a distinction

- CSR is about responsibility to all stakeholders not just shareholders

- Ethics is about morally correct behaviour

As a result you will often see ethical codes of practice as part of CSR whereby companies seeking to show their corporate social responsibility will publish their ethical codes of practice to show how they achieve these objectives Look out for ethical practices used as part of CSR

Core arenarsquos of Social Responsibility

Businessrsquos Social

Responsibilities

General Public

Customers

Employees

Investors and

financial community

Responsibilities to the general publicPublic Health Issues What to do about inherently dangerous products such asalcohol tobacco vaccines and steroids

Protecting the Environment Using resources efficiently minimizing pollution

Recycling Reprocessing used materials for reuse

Developing the Quality of the Workforce Enhancing quality of the overall workforcethrough education and diversity initiatives

Corporate Philanthropy Cash contributions donations of equipment and productsand supporting the volunteer efforts of company employees

Responsibilities to customersThe Right to Be Safe Safe operation of products avoiding product liability

The Right to Be Informed Avoiding false or misleading advertising and providingeffective customer service

The Right to Choose Ability of consumers to choose the products and services theywant

The Right to Be Heard Ability of consumers to express legitimate complaints to the appropriate parties

Responsibilities to employees Workplace Safety Monitored by Occupational Safety and Health Administration

Quality-of-Life Issues Balancing work and family through flexible work schedules subsidized child care and regulation such as the Family and Medical Leave Act

Ensuring Equal Opportunity on the Job Providing equal opportunities to all employees without discrimination many aspects regulated by law

Age Discrimination Age Discrimination in Employment Act

Sexual Harassment and Sexism equal pay for equal work without regard to gender

Responsibilities to employees Provide adequate monetary psychological rewards as well as job security

Selection of employees should be made fairly

Providing educational opportunities amp training to the employee at companyrsquos expense

Working conditions should be safe amp pleasant

Responsibilities to Investors Investors protected by regulation by the Securities and Exchange Commission and state regulations

Resources available are used for the benefit of the ownersshareholders

Stability of the enterprise

Ensure that the company grows so that the shareholder gains from increase in the market price of his shares

Ethics and the supply chain bull A business cannot claim to be ethical if it ignores unethical practices by it rsquos suppliers ndash eg

- Use of child labour andor forced labour

- Production in sweatshops

- Violations of the basic rights of workers

- ignoring health safety and environmental standards

bull An ethical business has to be concerned with the behaviour of all businesses that operate in the supply chain ndash ie

- Suppliers

- Contractors

_ Distributers and sales agents

Pressures to act ethically Influence of pressure groups

bullPressure groups ndash are external stakeholders

bull Tend to focus on activities and ethical practice of multinationals or industries with ethical issues

bullCombination of direct and indirect action can damage the target business or industry

Consumer action

bull Consumers may take action againstbull - businesses acting irresponsibly

bull - Businesses they consider to be unethical (eg animal furs)

bull - Businesses using practices they find unacceptable

bull Consumer action can also be positive ndashsupporting businesses with a strong ethical stance

Pressure groups exerting increasing influence

Benefits and drawbacks of ethical behaviourBENEFITS

bull Higher revenue ndash demand from positive consumer support

bull Improved brand image and business awareness recognition

bullBetter employee motivation and recruitment

bullNew sources of finance ndash eg ethical investors

POTENTIAL DRAWBACKS

bullHigher costs ndash eg sourcing from Fairtrade suppliers rather than lowest price

bullHigher overheads ndash eg training amp communication of ethical policy

bullA danger of building up false expectations

ReflectionhellipbullCan businesses behave unethically expect to satisfy shareholders in the long-term

bullShould a business be allowed to act unethically provided that it delivers what customers want

bullDo you agree that big businesses can no longer be relied upon to behave ethically

bullWhat is more important ndash profit or ethics

Common areas where ethics are tested

Business ethics are embedded both within individuals and the culture of any organisation therefore business ethics enters into every aspect of business operation and behaviour However there are certain issues more commonly tested and reported about than othershellip

Main categories of ethical judgementinvestigation

Business ethics and CSRbull Clearly an overlap between CSR and business ethics

bull A socially responsible firm should be an ethical firm

bull An ethical firm should be socially responsible

bull However there is a distinction

- CSR is about responsibility to all stakeholders not just shareholders

- Ethics is about morally correct behaviour

As a result you will often see ethical codes of practice as part of CSR whereby companies seeking to show their corporate social responsibility will publish their ethical codes of practice to show how they achieve these objectives Look out for ethical practices used as part of CSR

Core arenarsquos of Social Responsibility

Businessrsquos Social

Responsibilities

General Public

Customers

Employees

Investors and

financial community

Responsibilities to the general publicPublic Health Issues What to do about inherently dangerous products such asalcohol tobacco vaccines and steroids

Protecting the Environment Using resources efficiently minimizing pollution

Recycling Reprocessing used materials for reuse

Developing the Quality of the Workforce Enhancing quality of the overall workforcethrough education and diversity initiatives

Corporate Philanthropy Cash contributions donations of equipment and productsand supporting the volunteer efforts of company employees

Responsibilities to customersThe Right to Be Safe Safe operation of products avoiding product liability

The Right to Be Informed Avoiding false or misleading advertising and providingeffective customer service

The Right to Choose Ability of consumers to choose the products and services theywant

The Right to Be Heard Ability of consumers to express legitimate complaints to the appropriate parties

Responsibilities to employees Workplace Safety Monitored by Occupational Safety and Health Administration

Quality-of-Life Issues Balancing work and family through flexible work schedules subsidized child care and regulation such as the Family and Medical Leave Act

Ensuring Equal Opportunity on the Job Providing equal opportunities to all employees without discrimination many aspects regulated by law

Age Discrimination Age Discrimination in Employment Act

Sexual Harassment and Sexism equal pay for equal work without regard to gender

Responsibilities to employees Provide adequate monetary psychological rewards as well as job security

Selection of employees should be made fairly

Providing educational opportunities amp training to the employee at companyrsquos expense

Working conditions should be safe amp pleasant

Responsibilities to Investors Investors protected by regulation by the Securities and Exchange Commission and state regulations

Resources available are used for the benefit of the ownersshareholders

Stability of the enterprise

Ensure that the company grows so that the shareholder gains from increase in the market price of his shares

Ethics and the supply chain bull A business cannot claim to be ethical if it ignores unethical practices by it rsquos suppliers ndash eg

- Use of child labour andor forced labour

- Production in sweatshops

- Violations of the basic rights of workers

- ignoring health safety and environmental standards

bull An ethical business has to be concerned with the behaviour of all businesses that operate in the supply chain ndash ie

- Suppliers

- Contractors

_ Distributers and sales agents

Pressures to act ethically Influence of pressure groups

bullPressure groups ndash are external stakeholders

bull Tend to focus on activities and ethical practice of multinationals or industries with ethical issues

bullCombination of direct and indirect action can damage the target business or industry

Consumer action

bull Consumers may take action againstbull - businesses acting irresponsibly

bull - Businesses they consider to be unethical (eg animal furs)

bull - Businesses using practices they find unacceptable

bull Consumer action can also be positive ndashsupporting businesses with a strong ethical stance

Pressure groups exerting increasing influence

Benefits and drawbacks of ethical behaviourBENEFITS

bull Higher revenue ndash demand from positive consumer support

bull Improved brand image and business awareness recognition

bullBetter employee motivation and recruitment

bullNew sources of finance ndash eg ethical investors

POTENTIAL DRAWBACKS

bullHigher costs ndash eg sourcing from Fairtrade suppliers rather than lowest price

bullHigher overheads ndash eg training amp communication of ethical policy

bullA danger of building up false expectations

ReflectionhellipbullCan businesses behave unethically expect to satisfy shareholders in the long-term

bullShould a business be allowed to act unethically provided that it delivers what customers want

bullDo you agree that big businesses can no longer be relied upon to behave ethically

bullWhat is more important ndash profit or ethics

Common areas where ethics are tested

Business ethics are embedded both within individuals and the culture of any organisation therefore business ethics enters into every aspect of business operation and behaviour However there are certain issues more commonly tested and reported about than othershellip

Main categories of ethical judgementinvestigation

Core arenarsquos of Social Responsibility

Businessrsquos Social

Responsibilities

General Public

Customers

Employees

Investors and

financial community

Responsibilities to the general publicPublic Health Issues What to do about inherently dangerous products such asalcohol tobacco vaccines and steroids

Protecting the Environment Using resources efficiently minimizing pollution

Recycling Reprocessing used materials for reuse

Developing the Quality of the Workforce Enhancing quality of the overall workforcethrough education and diversity initiatives

Corporate Philanthropy Cash contributions donations of equipment and productsand supporting the volunteer efforts of company employees

Responsibilities to customersThe Right to Be Safe Safe operation of products avoiding product liability

The Right to Be Informed Avoiding false or misleading advertising and providingeffective customer service

The Right to Choose Ability of consumers to choose the products and services theywant

The Right to Be Heard Ability of consumers to express legitimate complaints to the appropriate parties

Responsibilities to employees Workplace Safety Monitored by Occupational Safety and Health Administration

Quality-of-Life Issues Balancing work and family through flexible work schedules subsidized child care and regulation such as the Family and Medical Leave Act

Ensuring Equal Opportunity on the Job Providing equal opportunities to all employees without discrimination many aspects regulated by law

Age Discrimination Age Discrimination in Employment Act

Sexual Harassment and Sexism equal pay for equal work without regard to gender

Responsibilities to employees Provide adequate monetary psychological rewards as well as job security

Selection of employees should be made fairly

Providing educational opportunities amp training to the employee at companyrsquos expense

Working conditions should be safe amp pleasant

Responsibilities to Investors Investors protected by regulation by the Securities and Exchange Commission and state regulations

Resources available are used for the benefit of the ownersshareholders

Stability of the enterprise

Ensure that the company grows so that the shareholder gains from increase in the market price of his shares

Ethics and the supply chain bull A business cannot claim to be ethical if it ignores unethical practices by it rsquos suppliers ndash eg

- Use of child labour andor forced labour

- Production in sweatshops

- Violations of the basic rights of workers

- ignoring health safety and environmental standards

bull An ethical business has to be concerned with the behaviour of all businesses that operate in the supply chain ndash ie

- Suppliers

- Contractors

_ Distributers and sales agents

Pressures to act ethically Influence of pressure groups

bullPressure groups ndash are external stakeholders

bull Tend to focus on activities and ethical practice of multinationals or industries with ethical issues

bullCombination of direct and indirect action can damage the target business or industry

Consumer action

bull Consumers may take action againstbull - businesses acting irresponsibly

bull - Businesses they consider to be unethical (eg animal furs)

bull - Businesses using practices they find unacceptable

bull Consumer action can also be positive ndashsupporting businesses with a strong ethical stance

Pressure groups exerting increasing influence

Benefits and drawbacks of ethical behaviourBENEFITS

bull Higher revenue ndash demand from positive consumer support

bull Improved brand image and business awareness recognition

bullBetter employee motivation and recruitment

bullNew sources of finance ndash eg ethical investors

POTENTIAL DRAWBACKS

bullHigher costs ndash eg sourcing from Fairtrade suppliers rather than lowest price

bullHigher overheads ndash eg training amp communication of ethical policy

bullA danger of building up false expectations

ReflectionhellipbullCan businesses behave unethically expect to satisfy shareholders in the long-term

bullShould a business be allowed to act unethically provided that it delivers what customers want

bullDo you agree that big businesses can no longer be relied upon to behave ethically

bullWhat is more important ndash profit or ethics

Common areas where ethics are tested

Business ethics are embedded both within individuals and the culture of any organisation therefore business ethics enters into every aspect of business operation and behaviour However there are certain issues more commonly tested and reported about than othershellip

Main categories of ethical judgementinvestigation

Responsibilities to the general publicPublic Health Issues What to do about inherently dangerous products such asalcohol tobacco vaccines and steroids

Protecting the Environment Using resources efficiently minimizing pollution

Recycling Reprocessing used materials for reuse

Developing the Quality of the Workforce Enhancing quality of the overall workforcethrough education and diversity initiatives

Corporate Philanthropy Cash contributions donations of equipment and productsand supporting the volunteer efforts of company employees

Responsibilities to customersThe Right to Be Safe Safe operation of products avoiding product liability

The Right to Be Informed Avoiding false or misleading advertising and providingeffective customer service

The Right to Choose Ability of consumers to choose the products and services theywant

The Right to Be Heard Ability of consumers to express legitimate complaints to the appropriate parties

Responsibilities to employees Workplace Safety Monitored by Occupational Safety and Health Administration

Quality-of-Life Issues Balancing work and family through flexible work schedules subsidized child care and regulation such as the Family and Medical Leave Act

Ensuring Equal Opportunity on the Job Providing equal opportunities to all employees without discrimination many aspects regulated by law

Age Discrimination Age Discrimination in Employment Act

Sexual Harassment and Sexism equal pay for equal work without regard to gender

Responsibilities to employees Provide adequate monetary psychological rewards as well as job security

Selection of employees should be made fairly

Providing educational opportunities amp training to the employee at companyrsquos expense

Working conditions should be safe amp pleasant

Responsibilities to Investors Investors protected by regulation by the Securities and Exchange Commission and state regulations

Resources available are used for the benefit of the ownersshareholders

Stability of the enterprise

Ensure that the company grows so that the shareholder gains from increase in the market price of his shares

Ethics and the supply chain bull A business cannot claim to be ethical if it ignores unethical practices by it rsquos suppliers ndash eg

- Use of child labour andor forced labour

- Production in sweatshops

- Violations of the basic rights of workers

- ignoring health safety and environmental standards

bull An ethical business has to be concerned with the behaviour of all businesses that operate in the supply chain ndash ie

- Suppliers

- Contractors

_ Distributers and sales agents

Pressures to act ethically Influence of pressure groups

bullPressure groups ndash are external stakeholders

bull Tend to focus on activities and ethical practice of multinationals or industries with ethical issues

bullCombination of direct and indirect action can damage the target business or industry

Consumer action

bull Consumers may take action againstbull - businesses acting irresponsibly

bull - Businesses they consider to be unethical (eg animal furs)

bull - Businesses using practices they find unacceptable

bull Consumer action can also be positive ndashsupporting businesses with a strong ethical stance

Pressure groups exerting increasing influence

Benefits and drawbacks of ethical behaviourBENEFITS

bull Higher revenue ndash demand from positive consumer support

bull Improved brand image and business awareness recognition

bullBetter employee motivation and recruitment

bullNew sources of finance ndash eg ethical investors

POTENTIAL DRAWBACKS

bullHigher costs ndash eg sourcing from Fairtrade suppliers rather than lowest price

bullHigher overheads ndash eg training amp communication of ethical policy

bullA danger of building up false expectations

ReflectionhellipbullCan businesses behave unethically expect to satisfy shareholders in the long-term

bullShould a business be allowed to act unethically provided that it delivers what customers want

bullDo you agree that big businesses can no longer be relied upon to behave ethically

bullWhat is more important ndash profit or ethics

Common areas where ethics are tested

Business ethics are embedded both within individuals and the culture of any organisation therefore business ethics enters into every aspect of business operation and behaviour However there are certain issues more commonly tested and reported about than othershellip

Main categories of ethical judgementinvestigation

Responsibilities to customersThe Right to Be Safe Safe operation of products avoiding product liability

The Right to Be Informed Avoiding false or misleading advertising and providingeffective customer service

The Right to Choose Ability of consumers to choose the products and services theywant

The Right to Be Heard Ability of consumers to express legitimate complaints to the appropriate parties

Responsibilities to employees Workplace Safety Monitored by Occupational Safety and Health Administration

Quality-of-Life Issues Balancing work and family through flexible work schedules subsidized child care and regulation such as the Family and Medical Leave Act

Ensuring Equal Opportunity on the Job Providing equal opportunities to all employees without discrimination many aspects regulated by law

Age Discrimination Age Discrimination in Employment Act

Sexual Harassment and Sexism equal pay for equal work without regard to gender

Responsibilities to employees Provide adequate monetary psychological rewards as well as job security

Selection of employees should be made fairly

Providing educational opportunities amp training to the employee at companyrsquos expense

Working conditions should be safe amp pleasant

Responsibilities to Investors Investors protected by regulation by the Securities and Exchange Commission and state regulations

Resources available are used for the benefit of the ownersshareholders

Stability of the enterprise

Ensure that the company grows so that the shareholder gains from increase in the market price of his shares

Ethics and the supply chain bull A business cannot claim to be ethical if it ignores unethical practices by it rsquos suppliers ndash eg

- Use of child labour andor forced labour

- Production in sweatshops

- Violations of the basic rights of workers

- ignoring health safety and environmental standards

bull An ethical business has to be concerned with the behaviour of all businesses that operate in the supply chain ndash ie

- Suppliers

- Contractors

_ Distributers and sales agents

Pressures to act ethically Influence of pressure groups

bullPressure groups ndash are external stakeholders

bull Tend to focus on activities and ethical practice of multinationals or industries with ethical issues

bullCombination of direct and indirect action can damage the target business or industry

Consumer action

bull Consumers may take action againstbull - businesses acting irresponsibly

bull - Businesses they consider to be unethical (eg animal furs)

bull - Businesses using practices they find unacceptable

bull Consumer action can also be positive ndashsupporting businesses with a strong ethical stance

Pressure groups exerting increasing influence

Benefits and drawbacks of ethical behaviourBENEFITS

bull Higher revenue ndash demand from positive consumer support

bull Improved brand image and business awareness recognition

bullBetter employee motivation and recruitment

bullNew sources of finance ndash eg ethical investors

POTENTIAL DRAWBACKS

bullHigher costs ndash eg sourcing from Fairtrade suppliers rather than lowest price

bullHigher overheads ndash eg training amp communication of ethical policy

bullA danger of building up false expectations

ReflectionhellipbullCan businesses behave unethically expect to satisfy shareholders in the long-term

bullShould a business be allowed to act unethically provided that it delivers what customers want

bullDo you agree that big businesses can no longer be relied upon to behave ethically

bullWhat is more important ndash profit or ethics

Common areas where ethics are tested

Business ethics are embedded both within individuals and the culture of any organisation therefore business ethics enters into every aspect of business operation and behaviour However there are certain issues more commonly tested and reported about than othershellip

Main categories of ethical judgementinvestigation

Responsibilities to employees Workplace Safety Monitored by Occupational Safety and Health Administration

Quality-of-Life Issues Balancing work and family through flexible work schedules subsidized child care and regulation such as the Family and Medical Leave Act

Ensuring Equal Opportunity on the Job Providing equal opportunities to all employees without discrimination many aspects regulated by law

Age Discrimination Age Discrimination in Employment Act

Sexual Harassment and Sexism equal pay for equal work without regard to gender

Responsibilities to employees Provide adequate monetary psychological rewards as well as job security

Selection of employees should be made fairly

Providing educational opportunities amp training to the employee at companyrsquos expense

Working conditions should be safe amp pleasant

Responsibilities to Investors Investors protected by regulation by the Securities and Exchange Commission and state regulations

Resources available are used for the benefit of the ownersshareholders

Stability of the enterprise

Ensure that the company grows so that the shareholder gains from increase in the market price of his shares

Ethics and the supply chain bull A business cannot claim to be ethical if it ignores unethical practices by it rsquos suppliers ndash eg

- Use of child labour andor forced labour

- Production in sweatshops

- Violations of the basic rights of workers

- ignoring health safety and environmental standards

bull An ethical business has to be concerned with the behaviour of all businesses that operate in the supply chain ndash ie

- Suppliers

- Contractors

_ Distributers and sales agents

Pressures to act ethically Influence of pressure groups

bullPressure groups ndash are external stakeholders

bull Tend to focus on activities and ethical practice of multinationals or industries with ethical issues

bullCombination of direct and indirect action can damage the target business or industry

Consumer action

bull Consumers may take action againstbull - businesses acting irresponsibly

bull - Businesses they consider to be unethical (eg animal furs)

bull - Businesses using practices they find unacceptable

bull Consumer action can also be positive ndashsupporting businesses with a strong ethical stance

Pressure groups exerting increasing influence

Benefits and drawbacks of ethical behaviourBENEFITS

bull Higher revenue ndash demand from positive consumer support

bull Improved brand image and business awareness recognition

bullBetter employee motivation and recruitment

bullNew sources of finance ndash eg ethical investors

POTENTIAL DRAWBACKS

bullHigher costs ndash eg sourcing from Fairtrade suppliers rather than lowest price

bullHigher overheads ndash eg training amp communication of ethical policy

bullA danger of building up false expectations

ReflectionhellipbullCan businesses behave unethically expect to satisfy shareholders in the long-term

bullShould a business be allowed to act unethically provided that it delivers what customers want

bullDo you agree that big businesses can no longer be relied upon to behave ethically

bullWhat is more important ndash profit or ethics

Common areas where ethics are tested

Business ethics are embedded both within individuals and the culture of any organisation therefore business ethics enters into every aspect of business operation and behaviour However there are certain issues more commonly tested and reported about than othershellip

Main categories of ethical judgementinvestigation

Responsibilities to employees Provide adequate monetary psychological rewards as well as job security

Selection of employees should be made fairly

Providing educational opportunities amp training to the employee at companyrsquos expense

Working conditions should be safe amp pleasant

Responsibilities to Investors Investors protected by regulation by the Securities and Exchange Commission and state regulations

Resources available are used for the benefit of the ownersshareholders

Stability of the enterprise

Ensure that the company grows so that the shareholder gains from increase in the market price of his shares

Ethics and the supply chain bull A business cannot claim to be ethical if it ignores unethical practices by it rsquos suppliers ndash eg

- Use of child labour andor forced labour

- Production in sweatshops

- Violations of the basic rights of workers

- ignoring health safety and environmental standards

bull An ethical business has to be concerned with the behaviour of all businesses that operate in the supply chain ndash ie

- Suppliers

- Contractors

_ Distributers and sales agents

Pressures to act ethically Influence of pressure groups

bullPressure groups ndash are external stakeholders

bull Tend to focus on activities and ethical practice of multinationals or industries with ethical issues

bullCombination of direct and indirect action can damage the target business or industry

Consumer action

bull Consumers may take action againstbull - businesses acting irresponsibly

bull - Businesses they consider to be unethical (eg animal furs)

bull - Businesses using practices they find unacceptable

bull Consumer action can also be positive ndashsupporting businesses with a strong ethical stance

Pressure groups exerting increasing influence

Benefits and drawbacks of ethical behaviourBENEFITS

bull Higher revenue ndash demand from positive consumer support

bull Improved brand image and business awareness recognition

bullBetter employee motivation and recruitment

bullNew sources of finance ndash eg ethical investors

POTENTIAL DRAWBACKS

bullHigher costs ndash eg sourcing from Fairtrade suppliers rather than lowest price

bullHigher overheads ndash eg training amp communication of ethical policy

bullA danger of building up false expectations

ReflectionhellipbullCan businesses behave unethically expect to satisfy shareholders in the long-term

bullShould a business be allowed to act unethically provided that it delivers what customers want

bullDo you agree that big businesses can no longer be relied upon to behave ethically

bullWhat is more important ndash profit or ethics

Common areas where ethics are tested

Business ethics are embedded both within individuals and the culture of any organisation therefore business ethics enters into every aspect of business operation and behaviour However there are certain issues more commonly tested and reported about than othershellip

Main categories of ethical judgementinvestigation

Responsibilities to Investors Investors protected by regulation by the Securities and Exchange Commission and state regulations

Resources available are used for the benefit of the ownersshareholders

Stability of the enterprise

Ensure that the company grows so that the shareholder gains from increase in the market price of his shares

Ethics and the supply chain bull A business cannot claim to be ethical if it ignores unethical practices by it rsquos suppliers ndash eg

- Use of child labour andor forced labour

- Production in sweatshops

- Violations of the basic rights of workers

- ignoring health safety and environmental standards

bull An ethical business has to be concerned with the behaviour of all businesses that operate in the supply chain ndash ie

- Suppliers

- Contractors

_ Distributers and sales agents

Pressures to act ethically Influence of pressure groups

bullPressure groups ndash are external stakeholders

bull Tend to focus on activities and ethical practice of multinationals or industries with ethical issues

bullCombination of direct and indirect action can damage the target business or industry

Consumer action

bull Consumers may take action againstbull - businesses acting irresponsibly

bull - Businesses they consider to be unethical (eg animal furs)

bull - Businesses using practices they find unacceptable

bull Consumer action can also be positive ndashsupporting businesses with a strong ethical stance

Pressure groups exerting increasing influence

Benefits and drawbacks of ethical behaviourBENEFITS

bull Higher revenue ndash demand from positive consumer support

bull Improved brand image and business awareness recognition

bullBetter employee motivation and recruitment

bullNew sources of finance ndash eg ethical investors

POTENTIAL DRAWBACKS

bullHigher costs ndash eg sourcing from Fairtrade suppliers rather than lowest price

bullHigher overheads ndash eg training amp communication of ethical policy

bullA danger of building up false expectations

ReflectionhellipbullCan businesses behave unethically expect to satisfy shareholders in the long-term

bullShould a business be allowed to act unethically provided that it delivers what customers want

bullDo you agree that big businesses can no longer be relied upon to behave ethically

bullWhat is more important ndash profit or ethics

Common areas where ethics are tested

Business ethics are embedded both within individuals and the culture of any organisation therefore business ethics enters into every aspect of business operation and behaviour However there are certain issues more commonly tested and reported about than othershellip

Main categories of ethical judgementinvestigation

Ethics and the supply chain bull A business cannot claim to be ethical if it ignores unethical practices by it rsquos suppliers ndash eg

- Use of child labour andor forced labour

- Production in sweatshops

- Violations of the basic rights of workers

- ignoring health safety and environmental standards

bull An ethical business has to be concerned with the behaviour of all businesses that operate in the supply chain ndash ie

- Suppliers

- Contractors

_ Distributers and sales agents

Pressures to act ethically Influence of pressure groups

bullPressure groups ndash are external stakeholders

bull Tend to focus on activities and ethical practice of multinationals or industries with ethical issues

bullCombination of direct and indirect action can damage the target business or industry

Consumer action

bull Consumers may take action againstbull - businesses acting irresponsibly

bull - Businesses they consider to be unethical (eg animal furs)

bull - Businesses using practices they find unacceptable

bull Consumer action can also be positive ndashsupporting businesses with a strong ethical stance

Pressure groups exerting increasing influence

Benefits and drawbacks of ethical behaviourBENEFITS

bull Higher revenue ndash demand from positive consumer support

bull Improved brand image and business awareness recognition

bullBetter employee motivation and recruitment

bullNew sources of finance ndash eg ethical investors

POTENTIAL DRAWBACKS

bullHigher costs ndash eg sourcing from Fairtrade suppliers rather than lowest price

bullHigher overheads ndash eg training amp communication of ethical policy

bullA danger of building up false expectations

ReflectionhellipbullCan businesses behave unethically expect to satisfy shareholders in the long-term

bullShould a business be allowed to act unethically provided that it delivers what customers want

bullDo you agree that big businesses can no longer be relied upon to behave ethically

bullWhat is more important ndash profit or ethics

Common areas where ethics are tested

Business ethics are embedded both within individuals and the culture of any organisation therefore business ethics enters into every aspect of business operation and behaviour However there are certain issues more commonly tested and reported about than othershellip

Main categories of ethical judgementinvestigation

Pressures to act ethically Influence of pressure groups

bullPressure groups ndash are external stakeholders

bull Tend to focus on activities and ethical practice of multinationals or industries with ethical issues

bullCombination of direct and indirect action can damage the target business or industry

Consumer action

bull Consumers may take action againstbull - businesses acting irresponsibly

bull - Businesses they consider to be unethical (eg animal furs)

bull - Businesses using practices they find unacceptable

bull Consumer action can also be positive ndashsupporting businesses with a strong ethical stance

Pressure groups exerting increasing influence

Benefits and drawbacks of ethical behaviourBENEFITS

bull Higher revenue ndash demand from positive consumer support

bull Improved brand image and business awareness recognition

bullBetter employee motivation and recruitment

bullNew sources of finance ndash eg ethical investors

POTENTIAL DRAWBACKS

bullHigher costs ndash eg sourcing from Fairtrade suppliers rather than lowest price

bullHigher overheads ndash eg training amp communication of ethical policy

bullA danger of building up false expectations

ReflectionhellipbullCan businesses behave unethically expect to satisfy shareholders in the long-term

bullShould a business be allowed to act unethically provided that it delivers what customers want

bullDo you agree that big businesses can no longer be relied upon to behave ethically

bullWhat is more important ndash profit or ethics

Common areas where ethics are tested

Business ethics are embedded both within individuals and the culture of any organisation therefore business ethics enters into every aspect of business operation and behaviour However there are certain issues more commonly tested and reported about than othershellip

Main categories of ethical judgementinvestigation

Pressure groups exerting increasing influence

Benefits and drawbacks of ethical behaviourBENEFITS

bull Higher revenue ndash demand from positive consumer support

bull Improved brand image and business awareness recognition

bullBetter employee motivation and recruitment

bullNew sources of finance ndash eg ethical investors

POTENTIAL DRAWBACKS

bullHigher costs ndash eg sourcing from Fairtrade suppliers rather than lowest price

bullHigher overheads ndash eg training amp communication of ethical policy

bullA danger of building up false expectations

ReflectionhellipbullCan businesses behave unethically expect to satisfy shareholders in the long-term

bullShould a business be allowed to act unethically provided that it delivers what customers want

bullDo you agree that big businesses can no longer be relied upon to behave ethically

bullWhat is more important ndash profit or ethics

Common areas where ethics are tested

Business ethics are embedded both within individuals and the culture of any organisation therefore business ethics enters into every aspect of business operation and behaviour However there are certain issues more commonly tested and reported about than othershellip

Main categories of ethical judgementinvestigation

Benefits and drawbacks of ethical behaviourBENEFITS

bull Higher revenue ndash demand from positive consumer support

bull Improved brand image and business awareness recognition

bullBetter employee motivation and recruitment

bullNew sources of finance ndash eg ethical investors

POTENTIAL DRAWBACKS

bullHigher costs ndash eg sourcing from Fairtrade suppliers rather than lowest price

bullHigher overheads ndash eg training amp communication of ethical policy

bullA danger of building up false expectations

ReflectionhellipbullCan businesses behave unethically expect to satisfy shareholders in the long-term

bullShould a business be allowed to act unethically provided that it delivers what customers want

bullDo you agree that big businesses can no longer be relied upon to behave ethically

bullWhat is more important ndash profit or ethics

Common areas where ethics are tested

Business ethics are embedded both within individuals and the culture of any organisation therefore business ethics enters into every aspect of business operation and behaviour However there are certain issues more commonly tested and reported about than othershellip

Main categories of ethical judgementinvestigation

ReflectionhellipbullCan businesses behave unethically expect to satisfy shareholders in the long-term

bullShould a business be allowed to act unethically provided that it delivers what customers want

bullDo you agree that big businesses can no longer be relied upon to behave ethically

bullWhat is more important ndash profit or ethics

Common areas where ethics are tested

Business ethics are embedded both within individuals and the culture of any organisation therefore business ethics enters into every aspect of business operation and behaviour However there are certain issues more commonly tested and reported about than othershellip

Main categories of ethical judgementinvestigation

Common areas where ethics are tested

Business ethics are embedded both within individuals and the culture of any organisation therefore business ethics enters into every aspect of business operation and behaviour However there are certain issues more commonly tested and reported about than othershellip

Main categories of ethical judgementinvestigation

Main categories of ethical judgementinvestigation