Ch. 24: Social and Ethical

Responsibility

Social Responsibility

What is Social Responsibility? More than running your enterprise

responsibility every day Companies should contribute to the

welfare of society and not be devoted solely to profits

Contract with Society Make safe products, treat customers

and employees well, & Run Honestly

Social Responsibility

What is Social Responsibility? More than just Philanthropy

Making charitable donations to improve human welfare

Responsibility to Customers No Misleading (Quality, Performance,

Safety)

Free Market Protects Consumers

Truth in Lending Act - Inform

The Fair Credit Billing Act – Complaints

Customer Service = Competitive Advantage

Social Responsibility

What is Social Responsibility? Responsibility to the Environment

Demonstrate to customers that they are environmentally responsible

Environmental Protection Agency (EPA - 1970)

Independent Federal Agency – Coordinate programs and enforce regulations aimed at reducing pollution and protecting the environment

Business and the Environment May mean higher costs, but the company can

also charge higher prices

Contributing to the Community

What is Social Responsibility? Employer– Happy Employees =

Productive Offer Flex Time

Health Care

Assistance to Physically Challenged

Employees Honest

Trustworthy

Integrity

What Does it Mean to be Ethical

Ethics Guidelines for human behavior

The Moral code by which people live and conduct business

Help people determine how to act where moral issues are involved

Understanding your Values 6 Basic Values

Trustworthiness, Respect, Responsibility, Fairness, Caring, and Citizen

What Does it Mean to be Ethical

Business Ethics Study of Behavior and Morals in Business

Situations

Begin at the Top

Bosses/Owners who act unethically cannot expect employees to act ethically

Difference in Ethics Not everyone has high ethical standards

Develop Clear Policies for what IS and what IS NOT Accepted

Developing Code of Ethics

Code of Ethics Ethical Behavioral Guidelines that govern

day to day activities or a profession or organization

Helps to defend the company against criminal action

Company does not condone actions of employees

Written or Unwritten Typically grow from unwritten to written

As # of employees grow, so to does misunderstandings - YUMATSU

Developing Code of Ethics

Code of Ethics – 4 Steps 1. Brainstorm Ethical Dilemmas

Problems the company might face due to the type of business

2. Discuss Potential Solutions Suggestions on how to handle situations

Understand different cultures and values

3. Write Set of General Guidelines Range of Acceptable ways to deal with

situations

4. Improve Your Code

Special Problems for Entrepreneurs

Conflict of Interest Clash between a person’s private interest

and his/her responsibilities in a position of trust

Desperate Measures Live by one’s code of ethics no matter

how difficult that might be

Cultural Differences Understand the ethical expectations of

the country’s culture

What is permitted by Law

Special Problems for Entrepreneurs

Bribes Payments to secure special services –

ILLEGAL in US

Patent or Copyright Infringement Long Term Vs Short Term

Acting unethically may create short term profits but long term problems

Integrity and Reputation will keep customers coming back