Ethics and Social Responsibility

4) Analyze the elements of sample business plans or business plan templates found in informational text, identifying and describing the purpose of common elements. Discriminate between elements that govern culture (such as vision, mission, core priorities and social responsibility) and those that may govern operational goals (such as market share, profitability, and product development). (TN Reading 1, 6, 9; TN Writing 7)

Objectives

• I CAN explain why business ethics are important.

• I CAN describe what ethical codes should include.

• I CAN discuss how businesses solve ethical dilemmas.

• I CAN describe which laws relate to ethics in business.

Please be reminded thatYour exam packet is due

at the end of this chapter.Watch the slides.

Word Study (10 minutes)

Understanding Management (You Do)Athletic apparel manufacturer Nike sells footwear that has been assembled in overseas factories where the minimum wage is much lower than it is in the United States. Maria Eitel, Vice Present of Social Responsibility at Nike, oversees programs that prevent the abuse of poor workers abroad. As more consumers demand that companies produce products without harming workers or the environment, businesses like Nike learn to keep step.

1. Why might it be challenging for a manager to balance the needs of the company with the needs of workers?

2. Imagine that you are the “Vice President of Social Responsibility” at your workplace or school. What changes would you make to prevent unfair practices?

The Importance of Ethics

• Ethics are a set of moral principles or values that govern behavior.

• Help businesses determine how to behave• The role of ethics in management decisions is

difficult.– What should managers do if they are aware of

unethical practices?– Blow the whistle? Risk their jobs?– Quit and allow practices to continue?– Ignore the practices?

Critical Thinking (We Do)

Is unethical and illegal the same thing?

Code of Ethics

• A document that outlines the principles of conduct to be used in making decisions within the organization

• Most corporations in the U.S. have codes of ethics.

Class Discussion (We Do)

Are codes of ethics really necessary?

Don’t most people know right from wrong?

Content of Ethical Codes• Honesty• Adherence to the law• Product safety and

quality• Health and safety in the

workplace• Conflicts of interest• Employment practices• Selling and marketing

practices• Financial reporting

• Pricing, billing, and contracting

• Trading in securities/using confidential information

• Acquiring and using information about competitors

• Security• Payments to obtain business• Political activities• Protection of the

environment

Writing Activity (They Do)Write a paragraph explaining why businesses should be concerned with ethics.

Individual Writing Activity (You Do)

• Write a student body code of ethics for Ridgeway High School.

• Use the Texas Instruments’ Code of Ethics as a model.

Behaving Honestly

• Sarbanes-Oxley Act of 2002

• Employee Theft• Lying About Hours

Worked• Falsifying Records

Dealing with Ethical Dilemmas

Ethical dilemmas aresituations in

which the ethical course of

action is not clear.

Guidelines for SolvingEthical Dilemmas

1. Have you defined the problem accurately?2. How would you define the problem if you stood on

the other side of the fence?3. Whom could your decision or action injure? Can

you discuss the problem with the affected parties before you make your decision?

4. Are you confident that your position will be as valid over a long period of time as it seems now?

5. Could you disclose without qualm your decision or action to your boss, your CEO, the board of directors, your family, and society as a whole?

Ethical Problems in the Business World

Normal Interactions

• Managers often take clients out to lunch or invite them to play golf

• Help businesspeople get to know each other.

Questionable Interactions

• Manager who sends a client a very expensive gift (could be seen as bribing)

• Businesses often provide guidelines on types of gifts considered acceptable.

Ethical Problems in the Business World

Illegal Interactions

• Paying bribes to attract business is unethical and illegal.

• Could face legal action and go to jail.

Bottom Line . . .

Having a code of ethics and a personal sense of what is right and wrong can help business managers choose the right course of action.

How would you handlethe following situations?

Example #1

Your boss informs you confidentially that one of your friends is going to be fired. Your friend is about to buy a house. Should you warn your friend that he is about to be fired, even though you promised your boss that you would not?

Example #2

Your colleague has been violating your company’s code of ethics by accepting expensive gifts from a salesperson who does business with your company. Should you otify your supervisor?

Example #3

One of your employees has been having serious personal problems, and you have tried to be understanding. However, your entire staff is suffering because of poor performance by this key team member. What should you do?

Annotated Reading Activity (You Do)

A Tale of Two CEOs: Elizabeth Holmes and Martin Shkreli

Laws Relating to Ethics in Business

Competitive Behavior• The Sherman Act• The Clayton Act• The Wheeler-Lea Act

Consumer Protection• Food and Drugs• Consumer Products• Loans

Laws Relating to Ethics in Business

Environmental Protection• The National Environmental

Policy Act of 1969• The Clean Air Act of 1970• The Toxic Substances

Control Act of 1976• The Clean Water Act of

1977

Teamwork (They Do)

Research and report on 3 unethical business practices.

Ethical Standards and Culture

Corporate Gift Giving• Customs differ around the

world.• In some cultures, gifts are

expected; failure to present them is considered an insult. (Japan)

• Regardless of local practices, American managers operating abroad must abide by the standards set in the U.S.

Intellectual Property• Refers to ownership of ideas

– Inventions, books, movies, and computer programs

• Guaranteed through patent, trademark, and copyright laws

• In 1999, Justice Dept., FBI, and Customs Service began cracking down on piracy and counterfeiting of software . . .

Fact and Idea Review (We Do)

1. Why is it important for businesses to act ethically?

2. List five areas a code of ethics should cover.3. Explain one way businesses solve ethical

dilemmas?4. Identify three laws that affect the way

companies do business.

Case Analysis (You Do)

For the past several weeks, Jan Morrison has been arriving late for her factory job. Rather than lose wages, she has asked her co-workers to punch her time card for her before she arrives each morning. Last week Jan asked you to punch her in.

You are aware of your company’s policy prohibiting employees from punching other workers in. Explain how you would respond.

Objectives

• I CAN explain the change in corporations’ views of social responsibility.

• I CAN describe the ways in which businesses demonstrate their social responsibility.

Changing Views ofSocial Responsibility

Social responsibility refers to the obligation that individuals or businesses have to help solve social problems.

Profit Maximization

TrusteeshipManagement

SocialInvolvement

Measuring Social Responsibility

A social audit is a review of a business’s social responsiveness.

PhilanthropyAnd

Volunteerism

EnvironmentalAwareness

Sensitivity to Diversity and Quality of Work Life

Fact and Idea Review (We Do)

1. What are the three schools of thought about the role of the corporation? How is the workplace different today than it was in the nineteenth and early twentieth century?

2. What are three ways in which corporations can demonstrate a sense of social responsibility? Give an example for each.

Making Generalizations (We Do)

How does hiring women and minorities demonstrate a business’s sense of social responsibility?

Evaluating Information (We Do)

Why do you think companies have obligations to their stakeholders?

Drawing Conclusions (We Do)

What purpose does a social audit serve?

Assessing Social Studies Skills(You Do)

• Select a large company operating in the United States. Using the Internet, research how that company demonstrates its sense of social responsibility.

• Prepare a PowerPoint Presentation summarizing what you find.

• Email to getting2business@gmail.com.

Case AnalysisMark Smith owns a growing Internet company, ReThink. Last year his company earned more than $45 million, and he hired 20 new employees. Mark would like to use his new wealth to help people in the poor community in which he grew up. He has asked you to prepare a memo for him, identifying various options for providing aid.How would you recommend that ReThink help a poor community?