Download Business Ethics

The Business and Society Relationship
Chapter
1
Cambodia University for Specialties
1
Business and Society: Ethics and Stakeholder Management, 7e • Carroll & Buchholtz
Copyright ©2009 by South-Western, a division of Cengage Learning. All rights reserved
The Business and Society Relationship
 Business scandals
 Business issues
 Broad societal concerns
2
Business and Society
Business
Society
The collection of private,
commercially oriented organizations
A broad group of people and other
organizations, interest groups,
a community, a nation.
Business and society interrelate in a
macroenvironment as stakeholders.
3
Society as the Macroenvironment
Social
Economic
Political
Technological
4
Segments of the Macroenvironment
Segment
Focus
Social
Demographics, lifestyles, social values
Economic
Nature and direction of the economy in
which business operates
Political
Processes for passing of laws and election
of officials. Interactions between firms,
politics, and government
Technological
Changes in technological advancements
taking place in society
5
A Pluralistic Society
Strengths
 Prevents concentration of
power
 Maximizes freedom of
expression and action
 Creates diversified set of
loyalties
 Provides checks and
Weaknesses
 Pursuit of self-interest
 Proliferates organizations
and groups with overlapping
goals
 Forces conflicts to center
stage
 Promotes inefficiency
balances
6
Special-Interest Society
Special Interests groups…
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make life more complex for business and government
pursue their own focused agenda
are more active, intense, diverse and focused
attract a significant following
often work at cross purposes, with no unified set of goals
7
Society’s Expectations Versus
Business’s Actual Social Performance
Social Performance:
Expected and Actual
Society’s
Expectations
of Business
Performance
Social Problem
Business’s Actual
Social Performance
Social
Problem
1960s
2000s
Time
Figure 1-4
8
Business Criticism: Use & Abuse of Power
Business
Power
Iron Law of
Responsibility
The ability or capacity to produce
an effect or to bring influence
In the long run, those who do not use
power in a manner society considers
responsible will tend to lose it
9
Urgent vs. Enduring Issues
1. Short-Term:
Issues or crises arise on the spur of the
moment and management must formulate
quick responses.
2. Long-Term:
Issues or problems are a long-term
concern and management must develop a
thoughtful organizational response.
10
Business Ethics
Ethics
Business
Ethics
Refers to issues of right, wrong,
fairness, and justice.
Focuses on ethical issues that arise
in the commercial realm.
11
Stakeholders
Individuals or groups with which
business interacts who have a
vested interest in the firm.
Stakeholders


External stakeholders
Internal stakeholders
12
Corporate Citizenship: Social Responsibility,
Responsiveness, and Performance
Chapter
2
Cambodia University for Specialties
Business and Society: Ethics and Stakeholder Management, 7e • Carroll & Buchholtz
Copyright ©2009 by South-Western, a division of Cengage Learning. All rights reserved
13
Introduction to Chapter 2
Business allegations…


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Little concern for the consumer
Cares nothing about the deteriorating social order
Has no concept of acceptable ethical behavior
Indifferent to the problems of minorities and the
environment
What responsibility does business have to society?
@
http://www.bsr.org
14
Corporate Social Responsibility (CSR)
Seriously considering the impact of
a company’s actions on society.
Corporate
Social
Responsibility
Requires the individual to consider
his/her acts in terms of a whole
social system, and holds him/her
responsible for the effects of acts
anywhere in that system.
15
Corporate Citizenship Concepts
Corporate Social…
Emphasizes…
Responsibility
Obligation, accountability
Responsiveness
action, activity
Performance
outcomes, results
16
Historical Perspective on CSR
Economic Model
Legal Model
Social Model
17
Modification of the Economic Model
Philanthropy
Community obligations
Paternalism
Motivation:
Keep government at arm’s length
18
Acceptance and Broadening of Meaning
From the 1950’s to the present, the concept of CSR has
gained considerable acceptance and the meaning has been
broadened to include specific issues, such as:
•
•
•
•
•
•
•
•
corporate governance
product safety
honesty in advertising
employee rights
affirmative action
environmental sustainability
ethical behavior
global CSR
19
CSR: Evolving Viewpoints
1. CSR considers the impact of the company’s actions on
society.
2. CSR requires decision makers to take actions that protect and
improve the welfare of society as a whole along with their own
interests.
3. CSR supposes that the corporation has not only economic
and legal obligations, but also certain responsibilities to
society which extend beyond these obligations.
20
CSR: Evolving Viewpoints
4. CSR relates primarily to achieving outcomes from
organizational decisions concerning specific
issues or problems which (by some normative
standard) have beneficial rather than adverse
effects upon pertinent corporate stakeholders. The
normative correctness of the products of corporate
action have been the main focus of CSR.
21
Carroll’s Four-Part Definition of CSR
The social responsibility of business encompasses the
economic, legal, ethical and discretionary
expectations that society has of organizations at a
given point in time.
22
Carroll’s Four-Part Definition of CSR
Responsibility
Societal
Expectation
Examples
Economic
Required
Be profitable. Maximize sales,
minimize costs.
Legal
Required
Obey laws, adhere to
regulations
Ethical
Expected
Avoid questionable practices.
Do what is right, fair, and just
Philanthropic
Desired/
Expected
Be a good corporate citizen.
Give back.
Figure 2-2
23
Legal Responsibilities
 Law cannot address all the topics or issues that
business may face
 Law often lags behind more recent concepts of what
is considered appropriate behavior
 Laws are made by lawmakers and may reflect the
personal interests/motivation of legislators rather
than appropriate ethical justifications
24
The Pyramid of CSR
Figure 2-3
25
The CSR Equation
Economic Responsibilities
+
Legal Responsibilities
+
Ethical Responsibilities
=
Total
Corporate
CSR
+
Philanthropic Responsibilities
26
Corporate Responsibility
in the 21st Century
 Demonstrate a commitment to society’s values and
contribute to society’s social, environmental, and
economic goals through action.
 Insulate society from the negative impacts of
company operations and its products and services.
 Share benefits of company activities with key
stakeholders as well as with shareholders.
 Demonstrate that the company can make more
money by doing the right thing.
27
Benefits of Corporate Citizenship
 Improved employee relations
 Improved customer relationships
 Improved business performance
 Enhanced company’s marketing efforts
28
“Triple Bottom Line” Perspective
Key Spheres of Sustainability
1.
Economic
2.
Social
3.
Environmental
29
Socially Responsible
or Ethical Investing
Social
Screening
A technique used to screen
firms for socially-responsible
investment purposes
30
The Stakeholder Approach to
Business, Society, and Ethics
Chapter
3
Cambodia University for Specialties
Business and Society: Ethics and Stakeholder Management, 7e • Carroll & Buchholtz
Copyright ©2009 by South-Western, a division of Cengage Learning. All rights reserved
31
Origins of the Stakeholder Concept
Stake
An Interest
An interest or a share in an
undertaking and can be
categorized as:
A Right
Ownership
Legal Right
Moral Right
32
Origins of the Stakeholder Concept
Stakeholder
An individual or a group that has
one or more of the various kinds of
stakes in the organization
33
Who Are Business Stakeholders?
Stockholders
Customers
Employees
Community
Competitors
Business Stakeholder Groups
Suppliers
Special-Interest
Groups
Society
General
Public
Media
34
DuPont’s Stakeholder Groups
 Shareholders
 Customers
 Employees
 Society
35
Evolution of the Business Enterprise
Production
View
Managerial
View
Stakeholder
View
36
Production and Managerial
Views of the Firm
Figure 3-2
37
Social Stakeholders
Primary social stakeholders
Secondary social stakeholders
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Shareholders and investors
Employees and managers
Customers
Local communities
Suppliers and other
business partners

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Government and regulators
Civic institutions
Social pressure groups
Media and academic
commentators
Trade bodies
Competitors
38
Who Are Business Stakeholders?
Primary
Stakeholders
Have a direct stake in the
organization and its success
Secondary
Stakeholders
Have a public or special
interest stake in the
organization
39
Core, Strategic, and
Environmental Stakeholders
 Core stakeholders are essential for the survival of the
firm
 Strategic stakeholders are vital to the organization’s
success and the threats and opportunities the
organization faces
 Environmental stakeholders are all others in the
organization's environment that are not core or strategic
40
What Are Our Stakeholders’ Stakes?

Identify the nature/legitimacy of a group’s stakes

Identify the power of a group’s stakes

Identify specific groups within a generic group
41
Stakeholder/Responsibility Matrix
Stakeholders
Economic
Legal
Ethical
Philanthropic
Owners
Customers
Employees
Community
Public at large
Social Activists
Other
Figure 3-8
42
Levels of Stakeholder Commitment
1. Basic Value Proposition
2. Sustained Stakeholder Cooperation
3. Understanding Broader Societal Issues
4. Ethical Leadership
@
http://www.corporate-ethics.org/
43
Effective Stakeholder Management
Stakeholder culture
Stakeholder management capability
Stakeholder corporation model
Principles of stakeholder management
44
Stakeholder Management Capability
Transactional level
Process Level
Rational Level
45
Stakeholder Engagement
Stakeholder
Engagement
An approach by which companies
implement the transactional level
of strategic management capability
46
Principles of Stakeholder Management
Figure 3-10
47
Strategic Steps Toward
Successful Stakeholder Management
1. Governing Philosophy.
Integrate stakeholder management into the firm’s
governing philosophy.
2. Values Statement.
Create a stakeholder-inclusive “values statement.”
3. Measurement System.
Implement a stakeholder performance
measurement system.
48
Key Indicators of
Successful Stakeholder Management
Survival
Avoided costs
Continued acceptance and use
Expanded recognition and adoption
49
Corporate Governance:
Foundational Issues
Chapter
4
Cambodia University for Specialties
Business and Society: Ethics and Stakeholder Management, 7e • Carroll & Buchholtz
Copyright ©2009 by South-Western, a division of Cengage Learning. All rights reserved
50
Introduction to Chapter 4
 Explore corporate governance and the ways in which
it has evolved.
• Explain the concept of legitimacy and the part that
corporate governance plays in establishing the legitimacy
of business
• Explore how good corporate governance can mitigate
problems created by separation of ownership
51
Legitimacy and Corporate Governance
Legitimacy
Legitimation
A condition wherein there is a
congruence between an
organization’s activities and
society’s expectations.
A dynamic process by which a
business seeks to perpetuate
its acceptance.
52
Legitimacy and Corporate Governance
Micro Level of Legitimacy
Macro Level of Legitimacy
1. Adapt operational methods to
1. Focus is on the totality of
perceived societal
expectations
2. Attempt to change societal
expectations or norms to
conform to firm’s practices
3. Seek to enhance its
legitimacy by identifying itself
with others that have a
powerful legitimate base in
society
business enterprises
2. Subject to ratification
3. Existence is solely
because society has given
it that right
53
The Corporation’s
Hierarchy of Authority
State Charter
Shareholders
Board of Directors
Management
Employees
Figure 4-1
54
Separation of Ownership from Control
Precorporate Period
Owners
(ownership)
Managers
(control)
Corporate Period
Shareholders
(ownership)
Board of
Directors
Management
(control)
Figure 4-2
55
The Need for Board Independence
Inside Directors
Outside Directors
56
Insider Trading
Insider Trading
The practice of obtaining critical
information from inside a company and
using that information for one’s own
personal financial gain
57
Improving Corporate Governance
 Changes in boards of directors
• board diversity
• Outside board directors
 Use of board committees for:
•
•
•
•
audit
nominating
compensation
public policy
 Board should “get tough” with the CEO
58
Use of Board Committees
Principal Responsibilities of an Audit Committee
1. To ensure that published financial statements are not
misleading.
2. To ensure that internal controls are adequate.
3. To follow up on allegations of material, financial, ethical,
and legal irregularities.
4. To ratify the selection of the external auditor.
@
http://www.sec.gov
59
Shareholder Democracy: Key Issues
Majority Vote
Classified Boards
Shareholder
Ballot Access
The requirement that board members
be elected by a majority of votes cast.
Boards that elect their members in
staggered terms.
Provides shareholders with the
opportunity to propose nominees for
the board of directors.
60
Shareholder Activism
Shareholder activism
Shareholder resolutions
Shareholder lawsuits
61
Business Ethics Fundamentals
Chapter
5
Cambodia University for Specialties
Business and Society: Ethics and Stakeholder Management, 7e • Carroll & Buchholtz
Copyright ©2009 by South-Western, a division of Cengage Learning. All rights reserved
62
Introduction to Chapter 5
Business Ethics
 Public’s interest in business ethics has heightened
during the last three decades
 Public’s interest in business ethics has been spurred
by headline-grabbing scandals
 The scandals of the early 2000s, beginning with Enron,
created and defined the “ethics industry”
63
Introduction to Chapter 5
Recent Ethics Scandals
Enron
Dynegy
WorldCom
HealthSouth
Arthur Anderson
Boeing
Tyco
Martha Stewart
Adelphia
Parmalat (Italy)
Global Crossing
Computer Associates
Figure 7-1
64
Inventory of Ethical Issues in Business
Employee-Employer Relations
Employer-Employee Relations
Company-Customer Relations
Company-Shareholder Relations
Company-Community / Public Interest
Figure 7-2
65
The Public’s Opinion of Business Ethics
Public Agenda Survey Findings
 The most egregious violators of business ethics were corrupt
executives who protected their own wealth
 Greed for money and power and a weakening sense of
personal values have been behind the recent ethics scandals
 People define business ethics in broad terms and are
concerned with how it has affected them
 Many participants thought it was possible for executives to be
both ethical and successful
 The media and financial press are not regarded as vigilant
watchdogs protecting the public interest
66
The Public’s Opinion of Business Ethics
LRN Ethics Study Survey Findings
 Three out of four employees reported encountering ethical
lapses on the job
 More than one in three respondents said these incidents
happen at least once a week
 Ten percent believed that a current issue in their company
could create a business scandal if discovered
 Younger workers reported higher levels of witnessing
ethical lapses and being distracted by them
67
Media Reporting on Business Ethics
 The media are reporting ethical problems more frequently
and fervently
 In-depth investigative reporting of business ethics on TV
shows as 60 Minutes, 20/20, Dateline NBC, Primetime Live,
and FRONTLINE
 Internet coverage in the form of webpages and blogs has
expanded in recent years
68
Business Ethics:
What Does It Really Mean?
Ethics
Moral conduct
Business
Ethics
The discipline that examines
good or bad practices within the
context of moral duty and obligation
Relates to principles of right and wrong
in behavior
Concerned with good and bad or
right and wrong behavior and
practices that take place in business
69
Business Ethics:
What Does It Really Mean?
Descriptive
Ethics
Normative
Ethics
Involves describing, characterizing
and studying morality
 Focuses on “What is”
Concerned with supplying and
justifying moral systems
 Focuses on “What ought /
ought not to be”
70
Three Approaches to Business Ethics
Conventional
Approach
Based on how normal society today
views business ethics
Principles
Approach
Based upon the use of ethics
principles to direct behavior, actions
and policies
Ethical Tests
Approach
Based on short, practical questions
to guide ethical decision making and
behavior
71
Sources of Ethical Norms
Fellow
Workers
Local
Community
Regions of
Country
The
Individual
Profession
Friends
Conscience
Employer
The Law
Religious
Beliefs
Society at
Large
Family
Figure 7-4
72
Four Important Ethical Questions
1. What is?
2. What ought to be?
3. How to we get from what is to what ought to be?
4. What is our motivation in all this?
73
Five Levels for Questions
1. Level of the individual
2. Level of the organization
3. Level of the industry or profession
4. Societal level
5. Global or international level
74
What Is?
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
What are your personal ethics?
What are your organization's ethics?
What are the ethics of your industry?
What are society’s ethics?
What are global ethics?
75
What Ought to Be?

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How ought we treat our aging employees?

Should we outsource aspects of production to China
or India?
How safe ought we make this product?
How clean an environment should we aim for?
How should we treat long-time employees when the
company is downsizing?
76
The Practical Question
What are we able
to accomplish?
What circumstances
permit us to accomplish?
What do we intend
to accomplish?
77
Three Models of Management Ethics
 Immoral management
 Moral management
 Amoral management
78
Three Models of Management Ethics
Immoral
Management
An approach devoid of ethical principles
and active opposition to what is ethical
Moral
Management
Conforms to high standards
of ethical behavior or professional
standards of conduct
Amoral
Management
 Intentional: does not consider
ethical factors
 Unintentional: casual or careless
about ethical factors
79
Characteristics of Immoral Managers
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Intentionally do wrong
Self-centered and self-absorbed
Care only about self or organization’s profits / success
Actively oppose what is right, fair, or just
Exhibit no concern for stakeholders
Are the “bad guys”
An ethics course probably would not help them
Figure 7-7
80
Illustrative Cases of Immoral Management
• Stealing petty cash
• Cheating on expense reports
• Taking credit for another’s accomplishments
• Lying on time sheets
• Coming into work hungover
• Telling a demeaning joke
• Taking office supplies for personal use
• Showing preferential treatment toward certain employees
• Rewarding employees who display wrong behaviors
• Harassing a fellow employee
81
Characteristics of Moral Managers
 Conform to high level of ethical or right behavior
 Conform to high level of personal and professional
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standards
Ethical leadership is commonplace
Goal is to succeed within confines of sound ethical
precepts
High integrity is displayed
Embrace letter and spirit of the law
Possess an acute moral sense and moral maturity
Are the “good guys”
Figure 7-8
82
Integrity Strategy
 Guiding values and commitments make sense and are
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
clearly communicated.
Company leaders are personally committed, credible,
and willing to take action on values
Espoused values are integrated into normal channels of
management decision making
The organization’s systems support and reinforce its
values
All managers have the skills, knowledge, and
competencies to make ethically sound decisions daily
83
Ethics Criteria
 Be a leader in the company's field, showing the way




ethically
Sponsor programs that demonstrate sincerity and
ongoing vibrancy, and reach deep into the company
Be a significant presence on the national scene, so the
company’s ethical behavior sends a loud signal
Stand out in at least one area
Demonstrate the ability to face a recent challenge and
overcome it with integrity
84
Habits of Moral Leaders
1.
2.
3.
4.
5.
6.
7.
They have a passion to do right
They are morally proactive
They consider all stakeholders
They have a strong ethical character
They have an obsession with fairness
They undertake principled decision making
They integrate ethics wisdom with management wisdom
85
Positive Ethical Behaviors
 Giving proper credit where it is due
 Being straightforward and honest with other
employees
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Treating all employees equally
Being a responsible steward of company assets
Resisting pressure to act unethically
Recognizing and rewarding ethical behavior of others
Talking about the importance of ethics and
compliance on a regular basis
86
Characteristics of Amoral Managers
Intentionally Amoral Managers:
 Don’t think ethics and business should “mix”
 Business and ethics are existing in separate spheres
 A vanishing breed
Unintentionally Amoral Managers:
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Don’t consider the ethical dimension of decision making
Don’t “think ethically”
Have no “ethics buds”
Well-intentioned, but morally casual or unconscious
Ethical gears are in neutral
Figure 7-9
87
Making Moral Management Actionable
 Senior management leads the transition from
amoral to moral management
• Business ethics training
• Codes of conduct
• Mission / Vision statements
• Ethics officers
• Tighter financial controls
• Ethically sensitive decision-making processes
• Leadership by example
 Recognize that amoral management exists and
can be remedied
88
Personal and Organizational Ethics
Chapter
6
Cambodia University for Specialties
Business and Society: Ethics and Stakeholder Management, 7e • Carroll & Buchholtz
Copyright ©2009 by South-Western, a division of Cengage Learning. All rights reserved
89
Introduction to Chapter 6
 This chapter focuses on the day-to-day ethical
issues that managers face
 Many managers have no training in business ethics
or ethical decision making
 Ethics is vital to business success
90
Levels at Which Ethical Issues
May Be Addressed
Personal
Level
Organizational
Level
Situations faced in our personal
lives outside the work context
Workplace situations faced as
managers and employees
91
Levels at Which Ethical Issues
May Be Addressed
Industry
Level
Societal and
Global Levels
Situations where a manager or
organization might influence
business ethics at the industry level
Local-to-global situations
confronted indirectly as a
management team
92
Personal and Managerial Ethics
Conventional approach
Resolving
Ethical
Conflicts
Principles approach
Ethical tests approach
93
Principle of Utilitarianism
Utilitarianism focuses on acts that produce the
greatest ratio of good to evil for everyone
Strengths
 Forces thinking about the
general welfare and
stakeholders
 Allows personal decisions to fit
into the situation complexities
Weaknesses
 Ignores actions that may be
inherently wrong
 May come into conflict with
the idea of justice
 Difficult to formulate satisfactory
rules for decision making
94
Kant’s Categorical Imperative
Kant’s Categorical Imperative is a duty-based principle of
ethics. A sense of duty arises from reason
or rational nature.
Formulations
1.
Act only on rules that you would be willing to see
everyone follow.
2.
Act to treat humanity in every case as an end and
never as a means.
3.
Every rational being is able to regard oneself as a maker
of universal law. We do not need an external authority
to determine the nature of the moral law.
95
Principle of Rights
Principle of Rights focuses on examining and possibly
protecting individual moral or legal rights
96
Principle of Rights
Figure 8-1
97
Servant Leadership
Servant leadership focuses on serving others
first, such as employees, customers, and community
98
Servant Leadership
Characteristics of Servant Leaders
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Listening
Empathy
Healing
Persuasion
Awareness
Foresight
Conceptualization
Commitment to the growth
of people
 Building community
Bridges
Business Ethics
and
Leadership
99
The Golden Rule
The Golden Rule focuses on the premise
that you should do unto others as
you would have them do unto you
The Golden Rule is…
1. accepted by most people
2. easy to understand
3. a win-win philosophy
4. a compass when you need direction
100
Factors Affecting the
Organization’s Moral Climate
1. Behavior of superiors
2. Behavior of one’s peers in the organization
3. Ethical practices of one’s industry or profession
4. Society’s moral climate
5. Formal organizational policy (or lack of one)
6. Personal financial need
Figure 8-5
101
Pressures Exerted on Employees
by Superiors
Managers feel under pressure to compromise
personal standards to achieve company goals.
 Top management:
50 percent agreed
 Middle management:
65 percent agreed
 Lower management:
85 percent agreed
102
Questionable Organizational Climates
Questionable Behaviors of Superiors or Peers
 Unethical acts, behaviors or practices
 Acceptance or legality as a standard of behavior
 Bottom-line mentality, expectations of loyalty and
conformity
 Absence of ethical leadership
 Objectives and evaluation systems that overemphasize
profits
 Insensitivity toward how subordinates perceive pressure
to meet goals
 Inadequate formal ethics policies
 Amoral decision making
103
Figure 8-6
Pillars of Leadership
Traits
Role
Modeling
Behaviors
Ethics
Communication
Decision
Making
Effective Rewards
and Discipline
Moral Manager
Moral Person
Ethical Leadership
104
Ethical Leadership Characteristics
 Articulate and embody the purpose and values of the
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


organization
Focus on organizational success rather than on personal ego
Find the best people and develop them
Create a living conversation about ethics, values, and value for
stakeholders
Create mechanisms of dissent
Take a charitable understanding of others’ values
Make tough calls while being imaginative
Know the limits of the values and ethical principles they live
Frame actions in ethical terms
Connect the basic value proposition to stakeholder support
and societal legitimacy
105
Features of Ethics Programs





Written standards of conduct
Ethics training
Mechanisms to seek ethics advice or information
Methods for reporting misconduct anonymously
Disciplinary measures for employees who violate
ethical standards
 Inclusion of ethical conduct in the evaluation of
employee performance
106
Key Elements for Ethics Programs

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
Compliance standards
High-level ethics personnel
Avoidance of delegation of undue discretionary authority
Effective communication
Systems for monitoring, auditing, and reporting
Enforcement
Detecting offenses, preventing future offenses
Keeping up with industry standards
Figure 8-8
Source: U.S. Sentencing Commission Guidelines
107
Content of Codes of Conduct








Employment practices
Employee, client, and vendor information
Public information / communications
Conflicts of interest
Relationships with vendors
Environmental issues
Ethical management practices
Political involvement
108
Purposes of Ethics Training
1.
2.
3.
4.
5.
6.
7.
Increase the manager’s sensitivity to ethical problems
Encourage critical evaluation of value priorities
Increase awareness of organizational realities
Increase awareness of societal realities
Improve understanding of the importance of public image
Examine the ethical facets of business decision making
Bring about a greater degree of fairness and honesty in the
workplace
8. Respond more completely to the organization’s social
responsibilities
109
Corporate Transparency
Corporate
Transparency
A quality, characteristic, or state
in which activities, processes,
practices, and decisions that take
place in companies become open or
visible to the outside world.
110
Business Ethics and Technology
Chapter
7
Cambodia University for Specialties
Business and Society: Ethics and Stakeholder Management, 7e • Carroll & Buchholtz
Copyright ©2009 by South-Western, a division of Cengage Learning. All rights reserved
111
Introduction to Chapter 7
This chapter explores questions surrounding
technology and business ethics, including:




What does technology mean?
What are the benefits and challenges of technology?
How does ethics relate to technology?
What are the ethical issues surrounding the major realms
of technology:
computers and information technology,
and biotechnology?
112
Characteristics of Technology
Benefits of Technology
 Increased production of goods and services
 Reduced amount of labor needed to produce




goods and services
Made labor easier and safer
Increased productivity
Increased standard of living
Increased life expectancy
113
Side Effects and Challenges
of Technology
Side Effects of Technology




Environmental pollution
Depletion of natural resources
Technological unemployment
Creation of unsatisfying jobs
@
http://www.ethix.org
114
Symptoms of Society’s Intoxication
with Technology
1.
2.
3.
4.
5.
6.
We favor the quick fix
We fear and warship technology
We blur the distinction between what is real and fake
We accept violence as normal
We love technology as a toy
We live our lives distanced and distracted
Find the Right Balance!
115
Potential Threats to Privacy
Posed by the Internet








Identity theft
Unintentionally revealing information
Lost / stolen personal information
Fake Web sites
Government distribution of information
Broadcasting information over the Internet
Victim of spying
Cyberstalker
Figure 9-1
116
Invasion of Privacy
Posed by the Internet
 Cookies
 Spam
 Identity Theft
117
Government’s Involvement
 The Financial Services Modernization Act of 1999
• “Opt in” to having personal information used
 Governing legislation
• Financial Services Modernization Act
• Fair Credit Reporting Act
• Children’s Online Privacy Protection Act
118
Questionable Businesses and Practices





Pornography
Gambling
Web-based music services
Intellectual property
Monitoring technology
119
The Workplace and Computer Technology
Employee Impression of Technology
 Expands job-related knowledge
 Increases productivity during work and commuting
times






Improves communication with clients and customers
Relieves job stress
Improved time management
Expanded professional networks
Development of a competitive edge
Balance of work and family needs
120
Surveillance
Computers
 Monitoring website employee computer files
 Blocking access to inappropriate websites
 Storing and reviewing e-mail
Telephone
 Monitoring time spent, numbers called
 Taping phone conversations
Video
 Video surveillance against theft
 Video surveillance to monitor employee performance
121
Unethical Employee Activities
 Created a dangerous situation by using new
technology while driving







Blamed error on technological glitch
Copied company software for home use
Used office equipment to shop on the Internet
Used office equipment to search for job
Accessed private files without permission
Intruded on co-workers’ privacy
Visited porn Web sites
122
Business Influence on
Government and Public Policy
Chapter
8
Cambodia University for Specialties
Business and Society: Ethics and Stakeholder Management, 7e • Carroll & Buchholtz
Copyright ©2009 by South-Western, a division of Cengage Learning. All rights reserved
123
Introduction to Chapter 8
The chapter focus is on business’s political
attempts to influence government and public
policy, and whether these strategies are legal
and ethical.
124
Corporate Political Participation
Political
Involvement
Participation in the formulation
and execution of public policy at
various levels of government
125
Corporate Political Participation
Lobbying
The process of influencing public
officials to promote or secure passage
or defeat of legislation
PACs
Instruments through which business
uses financial resources to
influence government
Coalition
Building
Business and other groups joining
forces to achieve common goals
Political
Strategy
To secure position of advantage
regarding a given regulation or
piece of legislation
126
The Purposes of Lobbying
 Gain legislative support or institutional approval for
some objective
 Obtain reinforcement of established policy or the
defeat of proposed policy shifts
 Targets the election or defeat of national, state, and
local legislators
127
Organizational Levels of Lobbying
Representation
Umbrella
Organizations
Trade
Associations
Company-Level
Lobbying
Figure 12-1
Broad
Midrange
Narrow/
Specific
Examples
• Chamber of Commerce of the US
• National Association of
Manufacturers
• National Automobile Dealers Assn
• National Association of Realtors
•
•
•
•
•
Washington and State Capital Offices
Law firms
Public affairs specialists
PACs
Grassroots lobbying
128
What Business Lobbyists Do for Clients
 Get access to key legislators
 Monitor legislation
 Establish communication channels with regulatory bodies
 Protect firms against surprise legislation
 Draft legislation, slick ad campaigns, direct-mail campaigns
 Provide issue papers on anticipated effects of legislative activity
 Communicate sentiments of client on key issues
 Influence outcome of legislation
 Assist companies in coalition building around issues
 Help members of Congress get reelected
 Organize grassroots efforts
Figure 12-3
129
Grassroots Lobbying
Grassroots
Lobbying
Cyberadvocacy
Mobilizing the “grassroots”—
individual citizens who might be
most directly affected by legislative
activity—to political action
Using the Internet to amass
grassroots support, and enable
grassroots supporters to
contact their legislators
130
Coalition Building
1. Manage the sequence in which issues are
addressed
2.
Increase the visibility of certain issues
3. Unbundle issues into smaller subissues
131
Political Action Committees
Political Action Committees (PACs) are groups of
like-minded businesses using financial resources
to influence government.
Golden Rule of Politics:
“He who has the gold, rules.”
132
Top 10 PAC Contributors
to Federal Candidates (2005-2006)
National Association of Realtors
National Beer Wholesalers Association
National Association of Home Builders
National Automobile Dealers Association
International Brotherhood of Electrical Workers
Operating Engineers Union
American Bankers Association
Laborers Union
American Association for Justice
Credit Union National Association
Figure 12-4
133
Business and Community Stakeholders
Chapter
10
Cambodia University for Specialties
Business and Society: Ethics and Stakeholder Management, 7e • Carroll & Buchholtz
Copyright ©2009 by South-Western, a division of Cengage Learning. All rights reserved
134
Introduction to Chapter 10
This chapter focuses on community involvement and
corporate philanthropy as community stakeholder
issues. Additionally, the topic of outsourcing and
business or plant closings as community stakeholder
concerns are explored.
135
Standards of Excellence in Corporate
Community Involvement
1. Leadership
2. Issues Management
3. Relationship Building
4. Strategy
5. Accountability
6. Infrastructure
7. Measurement
Figure 16-1
136
Benefits of Employee Volunteer Programs
•
•
•
•
•
•
Improving employee skills and training
Encouraging employee teamwork
Developing leadership skills
Developing the local labor pool
Recruiting and retaining employees
Improving corporate reputation
137
Developing a Community Action Plan
1.
2.
3.
4.
Know the community
Know the company’s resources
Select projects
Monitor projects
138
Philanthropy
Philanthropy
A desire to help mankind as
indicated by acts of charity;
love of mankind.
@
http://www.fdncenter.org
139
To Whom Do Companies Give?
Major Categories of Recipients
1. Health and human services
2. Education
3. Civic and community activities
4. Culture and the arts
140
Factors Influencing
Corporate Giving Priorities











Aligning closely with business needs
Limits on budgetary resources
Directions from the CEO and / or the Board
Strengthening the brand
Costs of responding to natural disasters
Being more responsive to stakeholders
Changes in the workforce
Other
Employee needs / requests
Community needs
Global giving
Figure 16-4
141
Community Partnerships
Strategic
Philanthropy
An approach by which corporate
giving and philanthropic endeavors
are designed to fit with the firm’s
mission, goals, or objectives.
142
Strategic Philanthropy
1. Make as direct a contribution as possible to the
financial goals of the firm.
2. Bring contribution programs into sharper alignment
with business endeavors.
3. Ensure that philanthropy is well planned and
managed.
143