Understanding business 8th by mcchugh nickels chapter 04

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CHAPTER

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Demonstrating
Ethical
Behavior
and Social
Responsibility

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Nickels

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McHugh

McGraw-Hill/Irwin
Understanding Business, 8e

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McHugh
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© 2008 The McGraw-Hill Companies, Inc., All Rights


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Ethics
• More Than Legality
• Standards are

with
each
• Ethics begins
Fundamental
of us

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Top U.S. Ethical Issues

Source: CMO Magazine, October 2004

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Ways to Prevent
Unethical Behavior

Source: CMO Magazine, Oct. 2004

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Privacy Protectors
Based on a Privacy Trust Score (PTS):
• Health care providers scored the highest
• Grocery Stores and Department of Homeland
Security (DHS) scored the lowest
• Democrats have higher PTS than all other political
affiliations
• 81% of the respondents feel privacy is important
or very important

Source: www.darwinmag.com, November 2003

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Ethics of MBA Students
Percent of MBA Students Who Would:

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Buy Stock on Inside Information

52%

Reveal Corp. Secrets to Spouse/Family

50%

Let a Gift Sway Purchasing Decision

26%

Pay Someone Off to Close a

13%

Business Deal
Source: USA Today

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Most Popular Ways to
Monitor Employees
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Internet (74%)

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Background Exams (62%)

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Store and Review Email (43%)

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Store and Review Computer Files (31%)

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Videotape Employees (18%)

Source: USA Today

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Ethics Check Questions:

• Is It Legal?
• Is It Balanced?
• How Will It Make Me Feel About
Myself?
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Why Don’t We
Trust Corporations?

Source: USA Today

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Factors Influencing
Managerial Ethics
Organizational

Environmental

• Values
• Work

• Top Level Mgmt.
Philosophy

• Competition

Background
• Family Status

• The Firm’s
Reward System

• Personality

• Job Dimensions

Individual

• Economic
Conditions
• Social/Cultural
Institutions

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Codes of Ethics

• Compliance-Based
• Integrity-Based

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Steps to Improve

U.S. Business Ethics

1.Top management support
2.Employees’ understanding
3.Managers’ training
4.Ethics Office
5.Outsiders must be informed
6.Enforcement of ethics code
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Levels of Corporate
Social Responsibility
Societal Responsibility
Stakeholder Responsibility
Ecological
General

Customers Profit

Profit Responsibility

Environment

Owners/Stockholders Employees

Public

Suppliers/Distributors
Public Interest Groups

Source: Marketing,
Marketing, 5/E by Berkowitz, Kerin, Hartley, and Rudelius.

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Corporate Responsibility
(Percent of country’s top 100 companies that publish
separate CR reports)

Source: Financial Times, June 15, 2005

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Social Audit

• Company
• Outside Groups that serve
as watchdogs:

• Socially-Conscious
Investors
• Environmentalists
• Union Officials
• Customers

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International Ethics
and Social Responsibility
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Ethical problems are Not Unique to
the U.S. managers

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Demand for Socially Responsible
Behavior from Global Suppliers

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Joint Initiative on Corporate
Accountability and Workers’ Rights

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Inter-American Convention Against
Corruption
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Best Company Reputation
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Johnson & Johnson (80.6)

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Coca-Cola (79.7)

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Google (79.5)

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UPS (79.4)

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3M (78.8)

Source: USA Today

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Most Admired
Global Companies
1.

General Electric

6. Microsoft

2.

Toyota

7. Dell

3.

Procter & Gamble

8. Berkshire Hathaway

4.

FedEx

9. Apple Computer

5.

Johnson & Johnson

10.Wal-Mart

Source: Fortune, 2006

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