Business Ethics and Social Responsibility

Unit 1Chapter 4

Introduction to Ethics

• http://www.youtube.com/watch?v=wj1mHAZUP2U

Background Knowledge

• So…what do you know about…

ETHICS?

SOCIAL RESPONSIBILITY?

Learning Targets

• Explain differences between ethics and the law

• Make personal connections about ethics, choices and your decision making process

Academic Vocabulary

• Ethics• Law• Business Ethics• Code of ethics

What is Ethics?

• Formal definition: set of moral principles by which people conduct themselves personally, socially, and professionally.

• Informal definition: Doing the right thing even when no one is looking

• Business ethics: Set of laws about how a business should conduct itself – legally and humanely

Ethics is not…law

• The law is established by governing bodies such as local, state, and federal legislators and hold all citizens accountable to the statutes or rules.

• Violators of law pay consequences i.e. speed in school zone, get hefty ticket.

• Line between ethics and law is often murky

Ethical Codes

• Code of ethics – a set of strict guidelines for maintaining ethics in the workforce

• Professional groups, such as doctors, lawyers, journalists and teachers, have their own codes as well.

• Professionals can lose license and livelihood for violating ethical code i.e. cheating on standardized test

Ethics or Law?• Slavery• Abortion• “Pulling the plug”• Doing personal business on

company time• Taking credit for someone

else’s work• Telling your friend’s mom

your friend is with you spending the night and is out with her boyfriend

• Ethics are rules of conduct

• Laws are rules established by legislators and enforced by regulators or law enforcement

Most of the time laws are written, approved, and then enforced by the level of government where they were written.

For example, a State law is enforced by the state. A Federal law is enforced by the Feds. In other words; State Laws and Government Laws go through a process to get approved, written into law, and then are enforced.

The Law

Ethics• Ethics are like rules of conduct. For example, doctors have unwritten ethical rules or

practices that they adhere to just because it's the right thing to do.

• They have the responsibility to take care of you to the best of their ability. It's ethically correct for a doctor to do his best to help you with your medical malady, but it's not a law that he has to.

• If a Doctor is unable to help you with your problem he has an ethical responsibility to refer you to a specialist, but there is not a law saying that he has to do that.

• Most occupations have ethics that come along with the job. Not all are written down, most are unspoken rules of conduct that people adhere to.

• For example an electrician has an ethical responsibility to repair your house wiring correctly so that it works correctly and is not a safety hazard for you.

A key difference is in terms of the sanctions (consequences) which apply if these are violated.

If you break an ethical code you may face disapproval from your peers, disciplinary proceedings from a professional body etc.

If you break the law and you could face a police investigation, a court appearance, various penalties like a fine or imprisonment etc. It might mean the difference between losing your job or your liberty.

Georgia’s hands were sweating. She was fifteen minutes into her math final when she began to panic. This exam was worth most of her grade in the class. She understood math—even liked it—and usually did really well. Her constant problem was that she wasn’t a strong test-taker. Her grades never reflected her understanding of the material she studied.

Now, here she was, once again stuck on one problem worth twenty-five points on the test, and she was drawing a blank. She put her head down on the desk and concentrated as hard as she could. She remembered doing a similar problem in class and explaining it to her friend Jessie, but now she was so stressed out by the test, she couldn’t even remember how to begin the problem.

She lifted her head and stared at her test. She listened to the clock tick on the wall and imagined her parents’ expression when she receives her report card. Jessie was sitting right in front of her. He is always a good test taker and had already solved the problem. The teacher had his backed turned and was on the other side of the room. Georgia could look over Jessie’s shoulder, get the answer, and no one would know.

Georgia needed to think quickly. She thought about how unfair it was that she regularly does badly on tests even though she works so hard in class and understands the material, too. She thought about how often she helped Jessie in class throughout the semester. What should she do?

She prided herself on doing what was right. But how right is it that she has to work in a system that doesn’t reward such hard work?

Finally, she took a deep breath. She looked to see if the teacher was still on the other side of the room, and glanced over Jessie’s shoulder just long enough to get the final answer to the question. Then, she figured out the rest of the problem on her own. In the moment, she felt great about her decision. She felt she had sort of created an ethical compromise.

But on the way home on the bus, Georgia’s good feelings started to fade. “What exactly is an ethical compromise anyway?” she thought to herself. Should she tell her teacher what she did or move forward and forget about the whole thing?

Check for understandingEthicsEthics is the set of principles in which you conduct yourself in society.

How often do you help the environment? What do you do?

Apply it! Criteria for Success• Lesson-to-life connection -Identify a time when you made an ethical decision.-Write a paragraph describing the situation and analyzing the ethics involved. -Explain the outcome of the decision.-Reflect and describe a key learning from that experience.

Learning Targets

• Explain business ethics.• Give reasons why

ethical behavior is good for business.

Academic Vocabulary• Sweatshops-factories that

have unsafe working conditions and treat workers badly and pay poorly.

• Hypocrisy-pretense of having a virtuous character, moral or religious beliefs or principles that one does not really possess

• Conflict of interest- when a business is tempted to put profits before social welfare

Regulators

• Governmental agencies that regulate businesses– Environmental

Protection Agency (EPA)– Occupational Safety and

Health Administration (OSHA)

– Food and Drug Administration (FDA)

Sweatshops

• The US Government sets up agencies such as Occupational Safety and Health Administration (OSHA) to enforce work related health and safety rules.

• Sweatshops violate such rules.

Nike Sweatshop

Nike Sweatshop

• http://www.youtube.com/watch?v=M5uYCWVfuPQ

• What are your observations and opinions after viewing this video?

Unethical Companies

• Use sweatshops to make money which is considered unethical

• Often violate laws of countries in which sweatshops operate

• Are subject to fines, lawsuits, and new regulations

• Sweatshops are defined as factories that have unsafe working conditions, treat workers badly, and pay poorly.

Legal Responsibility

• http://espn.go.com/espn/otl/story/_/id/7435424/dallas-cowboys-dip-sports-apparel-business-comes-allegations-sweatshop-labor

Good Ethics is Good Business

Ethical behavior matters. Ethics involve many relationships among buyers/sellers; employers/employees; business/government; business/society. Ethical behaviors impact

-company reputation with customers, community, stakeholders, press, etc.

-relationship with employees-retention of staff-marketing and ability to make profit

Important Ethical Questions

• When considering a questionable course of action, ask yourself:– Is it against the law? – Does it violate company or professional policy– What if everyone did this? How would I feel if

someone did this to me?– Am I sacrificing long-term benefits for short-term

gains (remember opportunity cost)?

Main Idea

• All relationships, whether personal or professional, work best when there is mutual trust.

Apply it- Criteria for Success

• After viewing the video, read the article “The Unseen Faces of Sports Apparel” and evaluate examples of corporate ethical decisions.

• Write a reflection about “The Unseen Faces of Sports Apparel”– Define words in a ☐– List five ethical violations– Describe Kol Malay’s life– Compare and contrast

your life with Kol’s– Propose solutions to the

ethical violations

Learning Targets• Define social responsibility.• Describe the social

responsibilities of businesses.

• Identify examples of Patagonia being socially responsible.

• Compare and contrast ethical decisions of two apparel companies.

Academic Vocabulary

• Social responsibility- duty to do what is best for the good of society

• Social responsibility takes into consideration all that the business does or does not do to solve problems of society.

• Business ethics focus on decisions considered good/bad; correct/incorrect

Patagonia

• http://video.patagonia.com/video/Whats-Done-in-Our-Name-Social-R

• Turn and talk with your partner about ways Patagonia is choosing to be socially responsible.

Making Decisions on Ethical Issues

• Use this process to help you make more INFORMED ethical decisions.– Identify the ethical dilemma.– Discover alternative actions.– Decide who might be affected.– List the probable effects of the alternatives.– Select the best alternative.

Apply It- Criteria for Success

Using the guidelines to making decisions on ethical issues, compare and contrast the two apparel companies, Denver Cowboys and Patagonia. Use worksheet to complete this assignment.

Check for Understanding

• How do companies benefit by enforcing their own code of ethics?

• Why does it pay to treat customers ethically?

• What are some important ethical questions to ask?

Learning Targets

• Describe responsibilities to customers

• Define responsibilities to employees

• Explain responsibilities to society

• Debate the Equal Pay Act Success

Responsibilities of Employers

• Creating jobs• Providing safe working

conditions, equal treatment, fair pay

• Giving back to the community via volunteer programs

• Monetary or in-kind donations

• Society as a whole

• Equal Pay Act- passed in 1964, this law requires that men and women be paid the same wages for doing equal work

• However, a pay gap between the sexes still exists today. How is that ethical?

Main Ideas

• Customers are a business’s first responsibility.

• Businesses should offer a good, safe product or service at a reasonable price.

• Behaving ethically is good for business.

Tylenol Poisoning 1982

• http://abcnews.go.com/Archives/video/oct-1982-tylenol-poisoning-9727309

What happens when businesses make unethical decisions?

• Some companies conspire to control market• This gives consumers less choice and gives

companies unfair advantage in marketplace• With less competition, productivity decreases• Unethical business practices may be subject to

fines and legal action• Consider how oil and gas are affected today

because of politics and perhaps ethics….

Governmental Oversight

• Environmental Protection Agency (EPA) – federal agency that enforces rules that protect the environment and control pollution

• Food and Drug Administration (FDA) – government agency established to protect consumers from dangerous or falsely advertised products

• Most companies obey these rules.• What are consequences for violating FDA or EPA

mandates?

Check for understanding

• Define social responsibility.• What is a conflict of interest?• What do companies adopt in the workplace to

treat their employees fairly?

Apply it – Criteria for Success

• Select a partner• Click on one of two websites on following slide• Select an article of ethical interest to you• Read and highlight the article noting key ethical

terms and dilemmas• Prepare a brief (5-6 slides) PPT summarizing the

article. Apply the “making decisions on ethical issues” and share your thoughts with the class.

Reflecting on Ethics

• http://www.businessweek.com/managing/company/business_ethics/

• http://business-ethics.com/

How has your background knowledge improved?

• So…what do you know about…

ETHICS?

SOCIAL RESPONSIBILITY?

For each topicWrite TWO Ah Ha’s Write TWO questions