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Transcript
2012-2013
© 2013 by Cengage Learning Inc. All Rights
Chapter 1
Copyright ©2012 by CengageReserved.
Learning Inc. All rights reserved
11
© Quayside/Shutterstock.com
Ethics and Social Responsibility
Learning Outcomes
1
Explain the concept of ethical behavior
2
Describe ethical behavior in business
3
Discuss corporate social responsibility-CSR
Explain cause-related marketing-CRM
4
2
Values, Morals and Ethics
Values
•Personal/Family
•Right and Wrong/Should and Shouldn’t
Morals
•Social/Society
•Good and Bad
http://changingminds.org/explanatio
Ethics
ns/values/values_morals_ethics.htm
•Professional/Business
•Formal system/set of rules adopted by a group of people
3
The Concept of
Ethical Behavior
Explain the concept
of ethical behavior
1
4
Ethical Behavior
The moral principles or values that generally
govern the conduct of an individual or a group.
• There is no law for “cutting in line.”
(Cutting in line would anger most people)
• Is it legal?
• Is it ethical?
5
1
Ethical Behavior in Business
Describe
ethical behavior
in business
2
6
Ethical Behavior
in Business
Morals
The rules people develop as
a result of cultural values
and norms.
Ethics
The moral principles or
values that generally govern
the conduct of an individual
Morals: involve “good” and “bad”
Ethics: standards or codes of behaviors
7
2
Ethical Behavior in Business ?
Fast Food Nation
http://www.youtube.com/watch?v=zc_z623Wsro
2
8
Ethical Development Levels
More
Childlike Preconventional
Morality
Conventional
Morality
More Postconventional
Morality
Mature
9
• Based on what will be
punished or rewarded
• Self-centered, calculating,
selfish
• Moves toward the
expectations of society
• Concerned over legality
and the opinion of others
• Concern about how they
judge themselves
• Concern if it is right in
the long run
2
Dell: An Ethics Case
• Documents from a lawsuit revealed that Dell shipped
over 11.8 million faulty computers from 2003 - 2005.
• An internal investigation revealed extensive problems,
but Dell tried to cover up the problem, telling its sales
team not to mention bring it up.
• Dell used faulty components to fix broken computers.
• Dell took a $300 million charge to fix the computers, but
only in response to stakeholder demands.
At what level of ethical development
did Dell operate?
10
Ethical Decision Making
Influential Factors
Extent of Problems
Probability of Harm
Top Management
Actions
Time Until
Consequences
Potential Consequences
Number Affected
Social Consensus
11
2
Creating Ethical Guidelines
A Code of Ethics:
12
© iStockphoto.com/Steve Cady
• Helps identify acceptable
business practices
• Helps control behavior
internally
• Avoids confusion in
decision making
• Facilitates discussion
about right and wrong
2
Ethics in Other Countries
Foreign Corrupt Practices Act (FCPA)
• Prohibits U.S. corporations from making
illegal payments to foreign officials.
• Has been criticized for putting U.S.
businesses at a disadvantage.
• Has encouraged some countries to
implement their own anti-bribery laws.
13
2
Corporate Social Responsibility
Discuss corporate
social responsibility
3
14
Corporate Social
Responsibility
Pros
• It is the right thing to do
• Businesses have the
resources to devote to
fixing social problems
• Prevents government
regulation and
potential fines
• It can be profitable
Cons
• Takes focus away from
making profits
• Business executives
spend shareholder
money on environmental
initiatives
• Do companies know
what is best for the
world? (Milton Friedman)
3
15
Sustainability
• Socially responsible
companies will
outperform their peers.
• It is in business’s best
interest to find ways to
attack society’s ills.
http://www.youtube.com/watch?v=lE0NLvW79SU
16
3
Exhibit 3.1
Pyramid of
Corporate Social
Responsibility
17
Growth of Social Responsibility
According to a recent study, (IBM Global Survey)
the percentage of firms that consider social
responsibility factors when making business
decisions are as follows:
Brazil
Canada
Australia
United States
India
China
Mexico
18
62%
54%
52%
47%
38%
35%
26%
3
Green Marketing
“The development and marketing of products
designed to minimize negative effects on the
environment or improve the environment”
– Environmentally aware customers pay
more for products
– Companies must try to educate
customers of environmental benefits
– Implications of Pricewaterhouse study
(raw materials depleted in 25 years)
19
3
Cause-Related Marketing
Explain cause-related
marketing
4
20
TOMS: One for One
• TOMS was founded on a simple
premise: With every product you
purchase, TOMS will help a
person in need. One for One™.
Using the purchasing power of
individuals to benefit the greater
good is what we're all about.
• Visit www.TOMS.com to learn more...
http://www.youtube.com/user/tomsshoes?feature=results_main
21
Cause-Related Marketing
For-profit and non-profit organizations
cooperate to generate funds.
• Generates about $7 billion annually
• Too many causes cause customer
cause fatigue
22
4