Download Chapter 4 Business Ethics & Social Responsibility

Business Ethics & Social
Responsibility
Learning Objectives

Explain business ethics.

Give reasons why ethical behavior is
good for business.

Define social responsibility.

Describe the social responsibilities of
businesses.
Why Is This Important?
Understanding business ethics and
social responsibility informs you of
your rights as a consumer, employee,
and citizen.
What Is Ethics?
Ethics is the set of moral principles by which
people conduct themselves personally, socially, or
professionally.
Business Ethics is a set of laws about how a
business should conduct itself.
Legal Responsibility

In order for any business to be successful, it must
operate legally and humanely.

The US government has independent agencies to
protect society.

OSHA – a department of Labor sets and enforces workrelated health and safety rules.

Independent agencies protect consumers, monitor
broadcast communications, and address discrimination
in the workplace.

Businesses that fail to follow laws are subject to fines,
lawsuits, and new regulations.
Code Of Ethics

A set of strict guidelines for maintaining ethics in the
workplace.

Professional groups have their own code of ethics.
Examples: doctors & lawyers

Can cover everything from employee behavior to
environmental safety.
Ethics as Good Business

Unethical business practices affect your business.

Violation of government regulations may incur fines or
jail time.

Violation of a companies code of ethics might get you
fired or you may lose your license.

Cheating customers or poor customer service impacts
business by losing repeat customers.

Treating employees poorly results in lose of workers and
time wasted training new employees.
Important Ethical Questions

Ethics involves an endless series of relationships –
between buyer and seller, employer and employee,
business and government, and business and society.

When considering a questionable course of action, you
have to ask yourself these important questions:
1.
Is it against the law? Does it violate company or
professional policies?
2.
What if everyone did this? How would I feel if someone did
this to me?
3.
Am I sacrificing long-term benefits for short-term gains?
Making Decisions on Ethical Issues

Making ethical decisions is not a quick task but
requires some hard thinking.

Sort of like the decision making process.

Steps for making ethical decisions:
1.
Identify the ethical dilemma.
2.
Discover a alternative actions.
3.
Decide who might be affected.
4.
List the probable effects of the alternatives.
5.
Select the best alternative.
Social Responsibility

Social responsibility is the duty to do what is
best for the good of society.

The social responsibility of business takes into
consideration all that businesses do or does not
do to solve problems of society.

Businesses have a ethical obligation to provide
safe products, create jobs, protect the
environment, and contribute to the overall
standard of living in society.

An ethical question in business occurs whenever
there’s a conflict of interest.
Responsibility To Customers
Customers are a business’s FIRST
responsibility.
 Businesses should offer a good, safe
product or service at a reasonable price.
 The Food & Drug Administration (FDA)
protects consumers from dangerous or
falsely advertised products.

Responsibility To Employees

Businesses have a social responsibility to create
jobs.

Businesses encourage volunteerism to tackle
societal problems.

Businesses provide work experience for people
who haven’t been successful in the workplace.
(job placement programs)

The government has also passed laws to protect
workers in the workplace. Example: Equal Pay
Act & Disabilities Act
Responsibility To Society

Businesses have environmental
responsibility.

The Environmental Protection Agency
(EPA) enforces rules that protect the
environment and control pollution.

More businesses today consider their
social responsibility to be more important
than ever.