Business Ethics and Social Responsibility Chapter 4 pp Introduction to Business, Business Ethics and Social Responsibility Learning Objectives After completing this chapter, youll be able to: 1.Define 1.Define ethics and business ethics. 2.Give 2.Give reasons why ethical behavior is good for business. 3.List 3.List the steps for dealing with an ethical dilemma Introduction to Business, Business Ethics and Social Responsibility Ethics is the set of moral principles by which people conduct themselves in society - personally, socially, or professionally. Example: stealing, cheating, lying reflects ones integrity WHAT IS ETHICS? Introduction to Business, Business Ethics and Social Responsibility Business ethics is a set of laws about how a business should conduct itself. To be successful - any business must operate legally and humanely. WHAT IS ETHICS? Introduction to Business, Business Ethics and Social Responsibility Sweatshops are factories that pay workers poorly, are unhealthy, and treat workers badly. Sweatshops led to the creation of LEGAL RESPONSIBILITY Introduction to Business, Business Ethics and Social Responsibility The Occupational Safety and Health Administration (OSHA) OSHA is a division of the Department of Labor that sets and enforces work-related health and safety rules. LEGAL RESPONSIBILITY Introduction to Business, Business Ethics and Social Responsibility Other independent agencies protect consumers, monitor broadcast communications, and address discrimination in the workplace LEGAL RESPONSIBILITY Introduction to Business, Business Ethics and Social 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. LEGAL RESPONSIBILITY Introduction to Business, Business Ethics and Social Responsibility Businesses that regulate themselves are able to operate more freely. How would this relate to our class? School rules, class rules, etc Setup our own code of ethics? LEGAL RESPONSIBILITY Introduction to Business, Business Ethics and Social Responsibility Unethical business practices can affect your business indirectly come back and haunt you Violating gov regulations or code of ethics can lead to being fired, losing licenses, jail time ETHICS AS GOOD BUSINESS Introduction to Business, Business Ethics and Social Responsibility Amount made in profits from one unhappy customer can = a lot more lost in business because of missed repeat business or bad word-of-mouth Example: Worst place to eat in town? Why? ETHICS AS GOOD BUSINESS Introduction to Business, Business Ethics and Social Responsibility Business works best when there is mutual trust between the buyer and the seller. Mutual Trust BUYER SELLER ETHICAL DECISION MAKING Introduction to Business, Business Ethics and Social Responsibility Treating employees unethically can also backfire Mistreating employees leads to a high turnover rate. This increases the cost of hiring and training new employees. ETHICS AS GOOD BUSINESS Introduction to Business, Business Ethics and Social Responsibility Ethical Decision Making = more business activity and more efficient productions of goods and services! ETHICAL DECISION MAKING Introduction to Business, Business Ethics and Social Responsibility Steps if you find yourself in an ethical dilemma or situations: 1.Identify the ethical dilemma 2.Discover alternative actions 3.Decide who might be affected 4.List the probable effects of the alternatives 5.Select the best alternative MAKING ETHICAL DECISIONS Introduction to Business, Business Ethics and Social Responsibility 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? continued IMPORTANT ETHICAL QUESITIONS Introduction to Business, Business Ethics and Social Responsibility 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? IMPORTANT ETHICAL QUESITIONS Introduction to Business, Business Ethics and Social Responsibility Graphic Organizer IMPORTANT ETHICAL QUESTIONS Does it violate the law or policies? ETHICAL DECISION Would this sacrifice long-term benefits for short-term gain? What if everyone did this, but its bad? UNETHICAL NO YES MAY BE UNETHICAL UNETHICAL Introduction to Business, Business Ethics and Social Responsibility HOMEWORK Rd. Pgs Questions 1-3 on Pg. 63 Introduction to Business, Business Ethics and Social Responsibility Example: Downloading music on KAZAA or MyNapster? How is this fair to the artists? How do they make money and keep making albums? IMPORTANT ETHICAL QUESITIONS Introduction to Business, Business Ethics and Social Responsibility Learning Objectives After completing this chapter, youll be able to: 1. Define 1. Define social responsibility. 2. Describe 2. Describe the social responsibilities businesses have to society. Introduction to Business, Business Ethics and Social Responsibility Social responsibility is the duty to do what is best for the good of society. Provide safe products Create jobs Protect the environment (recycling) Contribute to the standard of living in society SOCIAL RESPONSIBILITY Introduction to Business, Business Ethics and Social Responsibility A conflict of interest is when a business is tempted to put profits before social welfare Example: Dumping waste in the middle of nowhere to save on disposal costs, putting oil or other waste in a river so it will just wash away SOCIAL RESPONSIBILITY Introduction to Business, Business Ethics and Social Responsibility The Food and Drug Administration (FDA), a government agency, protects consumers from dangerous or falsely advertised products. Businesss first responsibility is to the customers. RESPONSIBILITY TO CUSTOMERS Introduction to Business, Business Ethics and Social Responsibility OVER-THE-COUNTER MEDICINE LABEL The FDA governs advertising and labeling of OTC medicines. Why does the FDA feel that regulation of advertising and packaging labels is necessary? Introduction to Business, Business Ethics and Social Responsibility CASE STUDY 1982 Johnson & Johnson poisoned Tylenol bottles popping up recalled all bottles, cost - $100 million made tamper proof bottles Today = best selling pain medicine Introduction to Business, Business Ethics and Social Responsibility Fair competition = healthy for the marketplace Some companies use unethical means to eliminate competition Example conspire with other companies to control the market for a product RESPONSIBILITY TO CUSTOMERS Introduction to Business, Business Ethics and Social Responsibility Businesses have a social responsibility to create jobs They are expected to provide employees with safe working conditions, equal treatment, and fair pay RESPONSIBILITY TO EMPLOYEES Introduction to Business, Business Ethics and Social Responsibility Equal Pay Act (passed in 1964) requires that men and women be paid the same wages for doing equal work Americans with Disabilities Act bans discrimination against persons with physical/mental disability RESPONSIBILITY TO EMPLOYEES Introduction to Business, Business Ethics and Social Responsibility Its in a companys best interest to treat its workers fairly otherwise low morale poor productivity high turnover rate will result RESPONSIBILITY TO EMPLOYEES Introduction to Business, Business Ethics and Social Responsibility Businesses also have responsibilities to society as a whole Many businesses plan for their social responsibilities just like planning for production or sale of their products RESPONSIBILITY TO SOCIETY Introduction to Business, Business Ethics and Social Responsibility RESPONSIBILITY TO SOCIETY Environmental Protection Agency (EPA, created 1970 by U.S. Gov) is a federal agency that enforces rules that protect the environment and control pollution Introduction to Business, Business Ethics and Social Responsibility RESPONSIBILITY TO SOCIETY Environmentally friendly things to do: Use biodegradable materials recycle, use recycled products soy based ink Eco-cars Better PUBLIC RELATIONS by being environmentally aware Introduction to Business, Business Ethics and Social Responsibility RESPONSIBILITY TO CREDITORS & OWNERS Many companies have kept inaccurate accounting records This effects both creditors and stockholders Sarbanes-Oxley Act holds CEO accountable Introduction to Business, Business Ethics and Social Responsibility HOMEWORK Key Points Review Questions 2-5. Introduction to Business, Business Ethics and Social Responsibility How often do you help the environment? What do you do? Source: The NPD Group Things you do personally to be Environmentally Friendly Introduction to Business, Business Ethics and Social Responsibility QUESTIONS? QUIZ NEXT CLASS 20 pts (18 ?s) T/F, Multiple Choice, Matching 1 Short Answer Question NOT Scantron, can use pen End of Chapter 4 Business Ethics and Social Responsibility