Understanding business 11th by mchugh nickels CHAPTER 4

CHAPTER 4

Demanding
Ethical and
Socially
Responsible
Behavior

McGraw-Hill/Irwin

Copyright © 2015 by the McGraw-Hill Companies, Inc. All rights reserved.


Ethics

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LIFE AFTER SCANDAL
• Scandals have shaken the real estate, mortgage
and banking industries.
• How do we restore trust in the free market
system?
-

Punish those who have broken the law.

-

Make accounting records more transparent.

-

Consider what is ethical, not just what is legal.

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WHAT are ETHICS?

• Ethics -- The standards of moral behavior.
Behaviors that are accepted by society as right
versus wrong.

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ETHICS

Doing What Is Right…

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ETHICS

As You Know
It To Be Right.


ETHICS

Ethics Begins With Each
of Us

Stem From Individual
More Than Legality
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ETHICS

Ethical Dilemma
a situation requiring a choice
between equally undesirable
alternatives.

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FACING ETHICAL DILEMMAS

• Ask yourself these
questions:
- Is it legal?
- Is it balanced?
- How will it make me
feel about myself?

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FACING ETHICAL DILEMMAS
The TI Ethics Quick Test
- Is the action legal?
- Does it comply with our values?
- If you do it, will you feel bad?
- How will it look in the newspaper?
- If you know it's wrong, don't do it!
- If you're not sure, ask.
- Keep asking until you get an
answer.
For copies of the card or further information,
contact the TI Ethics Office at 1-800-33-ETHIC.

(This information is provided to TI employees on
a business-card size mini-pamphlet to carry with
them.)


BASIC MORAL VALUES
Right:
• Integrity
• Respect for human life

Wrong:
•Cheating
•Cowardice
•Cruelty

• Self-control

• Honesty
• Courage
• Self-sacrifice
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ETHICS and YOU

• Plagiarizing from online
materials is the most
common form of cheating
in schools today.
• Studies found a strong
relationship between
academic dishonesty and
dishonesty at work.
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TEST PREP
• What are ethics?
• How do ethics differ from legality?
• When faced with ethical dilemmas, what
questions can you ask yourself that might help
you make ethical decisions?

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ETHICS START at the TOP

• Organizational ethics begin at
the top.
• Managers can help instill
corporate values in
employees.
• Trust between workers and
managers must be based on
fairness, honesty, openness
and moral integrity.
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FACTORS INFLUENCING
MANAGERIAL ETHICS

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ETHICS CODES
• An increasing number of companies have
adopted written codes of ethics.
• Compliance-Based Ethics Code -- Emphasize
preventing unlawful behavior by increasing control
and by penalizing wrongdoers.

• Integrity-Based Ethics Code -- Define the
organization’s guiding values, create an environment
that supports ethically sound behavior and stress a
shared accountability.
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HOW to IMPROVE AMERICA’S
BUSINESS ETHICS
1. Top management must adopt and
unconditionally support an explicit corporate
code of conduct.
2. Employees must understand that senior
management expects all employees to act
ethically.
3. Managers and others must be trained to consider
the ethical implications of all business decisions.
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HOW to IMPROVE AMERICA’S
BUSINESS ETHICS
4. An ethics office must be set up with which
employees can communicate anonymously.
Whistleblowers -- Insiders who report illegal or
unethical behavior.

5. Involve outsiders such as
suppliers, subcontractors,
distributors and
customers.
6. The ethics code must be
enforced.

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TEST PREP

• What are compliance-based and integrity-based
ethics codes?
• What are the six steps to follow in establishing
an effective ethics program in a business?

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CORPORATE SOCIAL
RESPONSIBILITY

Corporate Social
Responsibility (CSR) is
management’s obligation
to make choices and take
actions that contribute to
the welfare and interests
of society as well as to
those of the organization.


CORPORATE SOCIAL
RESPONSIBILITY

• CSR is based on a commitment to integrity,
fairness, and respect.

• CSR proponents argue that businesses owe their
existence to the societies they serve.

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CORPORATE PHILANTHROPY

• Corporate
Philanthropy -Includes charitable
donations.

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CORPORATE RESPONSIBILITY
and POLICY
• Corporate Responsibility -- Includes everything
from hiring minority workers to making safe products,
minimizing pollution, using energy wisely, and
providing a safe work environment.

• Corporate Policy -- The position a firm takes on
social and political issues.

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POSTIVE IMPACTS
of COMPANIES

• Xerox offers a Social Service Leave program.

• More and more companies are encouraging
employees to volunteer while on company time.
• The majority of MBA students surveyed reported
they would take a lower salary to work for a
socially responsible company.

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HELPING HANDS
Most Generous Celebrities

Source: Parade Magazine.

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