FHF

Business EthicsBusiness Ethics

][ An identifiable problem, situation, or opportunity that requires a person to

choose from among several actions that may be evaluated as right or wrong,

ethical or unethical

2-3

Social ResponsibilitySocial ResponsibilitySocial ResponsibilitySocial Responsibility

FHF

Business’s obligation is to maximize its positive impact and minimize its negative impact on society

2-4

Laws and RegulationsLaws and RegulationsLaws and RegulationsLaws and Regulations

FHF

Laws and regulations encourage businesses to conform to society’s basic standards, values, and attitudes.

Sarbanes-Oxley Act, 2002 Troubled Assets Relief Program

2-5

The Role of Ethics in The Role of Ethics in BusinessBusiness

The Role of Ethics in The Role of Ethics in BusinessBusiness

FHF

Growing concerns about legal and ethical issues in businessAntitrust violationsAccounting fraudCybercrimesUnfair competitive practicesTax fraud

2-6

FHF

Ethical IssuesEthical Issues

][ An identifiable problem, situation, or opportunity that requires a person to

choose from among several actions that may be evaluated as right or wrong,

ethical or unethical

2-7

Ethical IssuesEthical IssuesEthical IssuesEthical Issues

FHF

Involve all organizational activities• For profit businesses

• Non-profits

• Government

• Schools and universities

Learning to recognize and resolve ethical issues are important in maintaining an ethical business climate

2-8

Ethical Conduct Helps To:Ethical Conduct Helps To:Ethical Conduct Helps To:Ethical Conduct Helps To:

FHF

Build Trust

Promote confidence

Validate relationships

2-9

FHF

Examine the situation from your stakeholders’ position, including customers and competitors

People often need years of experience to accurately recognize and react to ethical situations

Ethical situations vary by culture

How to Judge the Ethics How to Judge the Ethics of a Situationof a Situation

2-10

Unethical Behavior in Unethical Behavior in BusinessBusiness

Unethical Behavior in Unethical Behavior in BusinessBusiness

FHF

Misuse of company resources Abusive & intimidating behavior Conflict of interest Fairness & honesty Communications Business relationships

2-11

Sources of Unethical Sources of Unethical BehaviorBehavior

Sources of Unethical Sources of Unethical BehaviorBehavior

FHF

Misuse of Company Resources The most commonly observed misconduct

Time theft Use of personal email and social networking sites at

work is a growing problem Stealing office supplies Unauthorized use of equipment and software

2-12

Sources of Unethical Sources of Unethical BehaviorBehavior

Sources of Unethical Sources of Unethical BehaviorBehavior

FHF

Abusive and Intimidating Behavior / Bullying

2-13

Sources of Unethical Behavior Sources of Unethical Behavior in Organizationsin Organizations

Sources of Unethical Behavior Sources of Unethical Behavior in Organizationsin Organizations

FHF

Conflict of interest Advance personal interest over others’ interests Benefit self at the expense of the company

Bribes represent a conflict of interest because they benefit an individual at the expense of an organization or society

2-14

Corruption Perceptions Corruption Perceptions IndexIndex

Corruption Perceptions Corruption Perceptions IndexIndex

FHF

Source: “Corruption Perceptions Index 2009,” Transparency International, http://www.transparency.org/policy_research/

surveys_indices/cpi/2009/cpi_2009_table (accessed January 22, 2010).

Least Corrupt Countries…1. New Zealand 12. Hong King/Luxembourg (tied)

2. Denmark 14. Australia

3. Singapore/ Sweden (tied) 16. Germany/ Ireland (tied)

5.Switzerland 17. Japan/ United Kingdom

6. Finland/Netherlands (tied) 19. United States

8. Australia/Canada/Iceland (3-way tie)

20. Barbados

11. Norway

2-19

Fairness & HonestyFairness & HonestyFairness & HonestyFairness & Honesty

FHF

Are at the heart of business ethics How employees use resources No deceit, coercion, or misrepresentations Fair competition Disclosure of potential harm caused by products

2-15

Ethical Concerns in Ethical Concerns in CommunicationsCommunications

Ethical Concerns in Ethical Concerns in CommunicationsCommunications

FHF

False/misleading advertising Deceptive personal selling tactics Truthfulness in product safety and quality Unsubstantiated claims Product labeling

2-16