Business Ethics and Social Responsibility

Chapter 4pp. 48-61

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Introduction to Business, Business Ethics and Social Responsibility Slide 2 of 44

Learning ObjectivesLearning ObjectivesAfter completing this chapter, you’ll be After completing this chapter, you’ll be able to:able to:

1.1. ExplainExplain business ethics.

2.2. GiveGive reasons why ethical behavior is good for business.

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Introduction to Business, Business Ethics and Social Responsibility Slide 3 of 44

Learning ObjectivesLearning ObjectivesAfter completing this chapter, you’ll be After completing this chapter, you’ll be able to:able to:

3.3. DefineDefine social responsibility.

4.4. DescribeDescribe the social responsibilities businesses have to society.

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Why It’s ImportantWhy It’s Important

Understanding business ethics and social responsibility makes you informed of your rights as a consumer, an employee, and a citizen.

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Introduction to Business, Business Ethics and Social Responsibility Slide 5 of 44

Key WordsKey Words

ethics business ethicssweatshopsOccupational Safety and Health Administration (OSHA) code of ethicssocial responsibility continued

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Introduction to Business, Business Ethics and Social Responsibility Slide 6 of 44

Key WordsKey Words

conflict of interestFood and Drug Administration (FDA)Equal Pay Act Environmental Protection Agency (EPA)

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Introduction to Business, Business Ethics and Social Responsibility Slide 7 of 44

What Is Ethics? What Is Ethics? Ethics is the set of moral principles by which people conduct themselves personally, socially, or professionally.

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Introduction to Business, Business Ethics and Social Responsibility Slide 8 of 44

What Is Ethics? What Is Ethics? Business ethics is a set of laws about how a business should conduct itself.

In general, for any business to be successful, it must operate legally and humanely.

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Introduction to Business, Business Ethics and Social Responsibility Slide 9 of 44

Ethics is the set of principles by which you conduct yourself in society.

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

Source: The NPD Group

Figure4.1 ENVIRONMENTALLY FRIENDLY

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Introduction to Business, Business Ethics and Social Responsibility Slide 10 of 44

Legal Responsibility Legal Responsibility Sweatshops are factories that pay workers poorly, are unhealthy, and treat workers badly.

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Introduction to Business, Business Ethics and Social Responsibility Slide 11 of 44

Legal Responsibility Legal Responsibility The Occupational Safety and Health Administration (OSHA) is a division of the Department of Labor that sets and enforces work-related health and safety rules.

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Introduction to Business, Business Ethics and Social Responsibility Slide 12 of 44

Legal Responsibility Legal Responsibility Other independent agencies protect consumers, monitor broadcast communications, and address discrimination in the workplace.

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Introduction to Business, Business Ethics and Social Responsibility Slide 13 of 44

Legal Responsibility Legal Responsibility Most businesses police themselves by distributing codes of ethics.

A code of ethics is a set of strict guidelines for maintaining ethics in the workplace.

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Introduction to Business, Business Ethics and Social Responsibility Slide 14 of 44

Legal Responsibility Legal Responsibility Businesses that regulate themselves are able to operate more freely.

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Introduction to Business, Business Ethics and Social Responsibility Slide 15 of 44

Ethics as Good Business Ethics as Good Business Unethical business practices can affect your business indirectly.

The amount you make in profits from one unhappy customer can translate into a lot more lost because of missed repeat business.

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Introduction to Business, Business Ethics and Social Responsibility Slide 16 of 44

Ethics as Good Business Ethics as Good Business

Treating employees unethically can also backfire.

Mistreating employees leads to a high turnover rate. This increases the cost of hiring and training new employees.

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Introduction to Business, Business Ethics and Social Responsibility Slide 17 of 44

Important Ethical Questions Important Ethical Questions When considering a questionable course of action, you have to ask yourself these important questions:

• Is it against the law? Does it violate company or professional policies?

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Introduction to Business, Business Ethics and Social Responsibility Slide 18 of 44

Important Ethical Questions Important Ethical Questions

• 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?

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Introduction to Business, Business Ethics and Social Responsibility Slide 19 of 44

Making Decisions on Making Decisions on Ethical Issues Ethical Issues

Here are some steps if you find yourself in an ethical dilemma:

1. Identify the ethical dilemma.2. Discover alternative actions.

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Introduction to Business, Business Ethics and Social Responsibility Slide 20 of 44

Making Decisions on Making Decisions on Ethical Issues Ethical Issues

3. Decide who might be affected.4. List the probable effects of the

alternatives.5. Select the best alternative.

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Introduction to Business, Business Ethics and Social Responsibility Slide 21 of 44

Graphic OrganizerImportant Ethical QuestionsImportant Ethical Questions

Graphic OrganizerGraphic Organizer

Does it violate the law or policies?Does it violate the law or policies?

ETHICAL DECISIONETHICAL DECISION

Would this sacrifice long-term benefits for Would this sacrifice long-term benefits for short-term gain?short-term gain?

What if everyone did this, but it’s bad?What if everyone did this, but it’s bad?

UNETHICALUNETHICAL

NO

NO

NO

YES

YES

YES

MAY BE UNETHICALMAY BE UNETHICAL

UNETHICALUNETHICAL

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Introduction to Business, Business Ethics and Social Responsibility Slide 22 of 44

Fast Review

1. How do companies benefit by enforcing their own codes of ethics?

2. Why does it pay to treat customers ethically?

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Introduction to Business, Business Ethics and Social Responsibility Slide 23 of 44

Fast Review

3. What are some important ethical questions to ask?

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Social Responsibility Social Responsibility Social responsibility is the duty to do what is best for the good of society.

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Social Responsibility Social Responsibility The ethical obligations of a business are to:• Provide safe products• Create jobs• Protect the environment• Contribute to the standard of living in

society

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Introduction to Business, Business Ethics and Social Responsibility Slide 26 of 44

Social Responsibility Social Responsibility A conflict of interest is when a business is tempted to put profits before social welfare.

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Introduction to Business, Business Ethics and Social Responsibility Slide 27 of 44

Responsibility to Customers Responsibility to Customers The Food and Drug Administration (FDA), a government agency, protects consumers from dangerous or falsely advertised products.

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Introduction to Business, Business Ethics and Social Responsibility Slide 28 of 44

Figure4.2 OVER-THE-COUNTER MEDICINE LABEL

The FDA governs advertising and labeling of over-the-counter medicines.

Analyze why the FDA officials might feel that regulation of advertising and packaging labels is necessary.

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Introduction to Business, Business Ethics and Social Responsibility Slide 29 of 44

Responsibility to Customers Responsibility to Customers Fair competition between businesses is healthy for the marketplace, but some companies don’t always play reasonably.

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Introduction to Business, Business Ethics and Social Responsibility Slide 30 of 44

Responsibility to Customers Responsibility to Customers Some companies use unethical means to eliminate competition.

One of the most common means is to conspire with other companies to control the market for a product.

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Introduction to Business, Business Ethics and Social Responsibility Slide 31 of 44

Responsibility to Employees Responsibility to Employees Businesses have a social responsibility to create jobs.

They are expected to provide employees with safe working conditions, equal treatment, and fair pay.

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Introduction to Business, Business Ethics and Social Responsibility Slide 32 of 44

Responsibility to Employees Responsibility to Employees The Equal Pay Act (passed in 1964) requires that men and women be paid the same wages for doing equal work.

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Introduction to Business, Business Ethics and Social Responsibility Slide 33 of 44

Responsibility to Employees Responsibility to Employees The Americans with Disabilities Act bans discrimination against persons with physical or mental disability.

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Responsibility to Employees Responsibility to Employees It’s in a company’s best interest to treat its workers fairly otherwise low morale, poor productivity, and a high turnover rate are its troubles.

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Introduction to Business, Business Ethics and Social Responsibility Slide 35 of 44

Responsibility to Society Responsibility to Society Businesses have responsibilities not only to customers and to employees but also to society as a whole.

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Introduction to Business, Business Ethics and Social Responsibility Slide 36 of 44

Responsibility to Society Responsibility to Society In 1970, the U.S. government created the Environmental Protection Agency (EPA), a federal agency that enforces rules that protect the environment and control pollution.

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Introduction to Business, Business Ethics and Social Responsibility Slide 37 of 44

Responsibility to Society Responsibility to Society Many businesses plan for their social responsibilities just like planning for production and sale of their products.

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Fast Review

1. Define social responsibility.

2. What is a conflict of interest?

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Fast Review

3. What do companies adopt in the workplace to treat their workers fairly?

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Why should a company make a vested interest in nature over its products?

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Introduction to Business, Business Ethics and Social Responsibility Slide 41 of 44

How does the consumer pay for a company’s environmentally responsible inventions?

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What are social issues you’re interested in pursuing?

How are businesses involved?

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What government agency has a responsibility to protect society from genetically modified organisms?

End of Chapter 4Business Ethics and Social Responsibility