Business Ethics and Social Responsibility2

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> > > > > > > > Chapter 2

Business Ethics andSocial Responsibility


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Explain the concepts of businessethics and social responsibility.

Describe the factors that influencebusiness ethics.

List the stages in the developmentof ethical standards.

Identify common ethical dilemmasin the workplace.

Discuss how organizations shapeethical behavior.

Describe how businesses’ socialresponsibility is measured.

Summarize the responsibilities ofbusiness to the general public,customers, and employees.

Explain why investorsare concerned withbusiness ethics and

social responsibility.

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Business Ethics The standards of conduct and moral values governing actions anddecisions in the work environment.

– Social responsibility. – Balance between what’s right and what’s profitable.

– Often no clear-cut choices.

– Often shaped by the organization’s ethical climate.

Sarbanes-Oxley Act 2002 law that added oversight for the nation’s major companies and aspecial oversight board to regulate public accounting firms that auditthe financial records of these corporations.


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• High profile investigationsand arrests in headlines.

• Vast majority of businessesethical.

• New corporate officerscharged with deterringwrongdoing and ensuringethical standards.

Johnson & Johnson Website

http://www.jnj.com/connect/about-jnj/jnj-credo/http://www.jnj.com/connect/about-jnj/jnj-credo/


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• Individuals can make thedifference in ethical expectationsand behavior

– Putting own interest ahead of theorganization

– Lying to employee

– Misrepresenting hours

– Safety violations – Internet Abuse

• Technology is expandingunethical behavior


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Situation in which a businessdecision may be influencedfor personal gain.

Telling the truth andadhering to deeply feltethical principles in

business decisions.

Businesspeople expectemployees to be loyaland truthful, but ethicalconflicts may arise.

Employee’s disclosureof illegal, immoral, orunethical practices inthe organization.


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Code of Conduct Formal statement that

defines how theorganization expects

and requiresemployees to resolve

ethical questions.


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Codes of conductcannot detail a solution

for every ethicalsituation, so

corporations provide

training in ethicalreasoning.


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Helping employeesrecognize and reason

through ethicalproblems and turning

them into ethicalactions.


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Executives must

demonstrate ethicalbehavior in theiractions.


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Social Responsibility

• Management’s consideration of prof i t ,

con su m er sa t is fac t ion , and socie ta lwell-being of equal value in evaluatingthe firm’s performance.

• Contributions to the overall economy,

jo b o p p o rtu n it ies , and char i tablecon t r ibu t ions and serv ice .

• Organizations measure through soc ia laudi ts .


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• Publ ic Heal th Issues . What to do about inherently dangerousproducts such as alcohol, tobacco, vaccines, and steroids.

• Pro tec t ing the Envi ronm ent . Using resources efficiently,

minimizing pollution.• Recyc l ing . Reprocessing used materials for reuse.

• Developin g the Qual ity of th e Workfo rce . Enhancing quality ofthe overall workforce through education and diversity initiatives.

• Corpo rate Phi lanthro py. Cash contributions, donations ofequipment and products, and supporting the volunteer efforts ofcompany employees.


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• The Righ t to B e Safe . Safe operation of products,avoiding product liability.

• The Right to B e Info rm ed. Avoiding false or misleadingadvertising and providing effective customer service.

• The Right to Choos e. Ability of consumers to choosethe products and services they want.

• The Righ t to Be Heard. Ability of consumers toexpress legitimate complaints to the appropriate parties.


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• Work place Safety. Monitored by Occupational Safety and Health Administration .

• Quali ty-of-Life Iss ues. Balancing work and family throughflexible work schedules, subsidized child care, and regulation

such as the Family and Medical Leave Act of 1993.• Ensur ing Equa l Oppor tun i ty on the Job . Providing equal

opportunities to all employees without discrimination; manyaspects regulated by law.

• Ag e Discr im inat ion . Age Discrimination in Employment Act of1968 protects workers age 40 or older.

• Sexual Harassm ent and Sexism . Avoiding unwelcome actionsof a sexual nature; equal pay for equal work without regard togender.

http://www.osha.gov/http://www.osha.gov/http://www.dol.gov/esa/whd/fmla/http://www.eeoc.gov/policy/adea.htmlhttp://www.eeoc.gov/policy/adea.htmlhttp://www.dol.gov/esa/whd/fmla/http://www.osha.gov/http://www.osha.gov/


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• Obligation to make profits for shareholders.

• Expectation of ethical and moral behavior.

• Investors protected by regulation by theSecurities and Exchange Commission and state regulations.
http://www.sec.gov/http://www.sec.gov/

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Business Ethics and Social Responsibility2