Download Is it legal? - Kimberley Black

+
Understanding
Canadian
Business
Chapter 5
Ethics and Social
Responsibility
+
Learning Goals
1.
Explain why legality is only the first step in
behaving ethically and ask the three
questions one should answer when faced
with a potentially unethical action.
2.
Describe management’s role in setting
ethical standards and distinguish between
compliance-based and integrity-based
ethics codes.
+
Learning Goals
3.
List the six steps in setting up a corporate
ethics code.
4.
Define corporate social responsibility and
examine corporate responsibility to various
stakeholders.
5.
Discuss the responsibility that business has to
customers, investors, employees, society,
and the environment.
+
Ethics
Standards of moral behaviour,
that is, behaviour that is
accepted by society as right
versus wrong.
+ Ethics
and Legality
Are Two Different Things
How should
people treat
others?
Laws we have
written to
protect
ourselves from
fraud, theft &
violence
What
responsibility
should they
feel to others?
Ethics
Legality
+
Complete an
Ethics
Questionnaire
Write 1 to 9 on a piece of
looseleaf and answer the
following questionnaire
+ Ethics Questionnaire
1.
2.
3.
Which is worse?
A.
Hurting someone’s feelings by telling the
truth.
B.
Telling a lie and protecting someone’s
feelings.
Which is the worst mistake?
A.
To make exceptions too freely.
B.
To apply rules too rigidly.
Which is worse to be?
A.
Unmerciful
B.
Unfair
+ Ethics Questionnaire
4.
5.
Which is worse?
A.
Steeling something valuable from
someone for no good reason.
B.
Breaking a promise to a friend for no
good reason.
Which is it better to be?
A.
Just and fair.
B.
Sympathetic and feeling.
+ Ethics Questionnaire
6.
7.
Which is worse?
A.
Not helping someone in trouble.
B.
Being unfair to someone by playing
favourites.
In making a decision you rely
more on
A.
Hard facts
B.
Personal feelings and intuition
+ Ethics Questionnaire
8.
9.
Your boss orders you to do something
that will hurt someone. If you carry out
the order, have you actually done
anything wrong?
A.
Yes
B.
No
Which is more important in determining
whether an action is right or wrong?
A.
Whether anyone actually gets hurt.
B.
Whether a rule, law, commandment, or
moral principal is broken.
+
How to Score


The answers fall in
one of two
categories, J or C.
Count your number
of J and C answers
using this key.
1.
A=C
B=J
2.
A=J
B=C
3.
A=C
B=J
4.
A=J
B=C
5.
A=J
B=C
6.
A=C
B=J
7.
A=J
B=C
8.
A=C
B=J
9.
A=C
B=J
+
Meaning of Your Score

The higher your J score,
the more you rely on an ethic of justice.

The higher your C score, the more you prefer an
ethic of care.

Neither style is better than the other, but they are
different.

The styles are complementary.
Your score probably shows you rely on each style.

The more you appreciate both approaches, the
better you’ll be able to resolve ethical dilemmas
and to understand and communicate with
people who prefer the other style.
+ Ethics
is More Than Legality
 It
is not uncommon to hear of instances where
business people are involved in unethical behaviour.
 After
two years of denying accusations, WestJet
Airlines admitted to spying on Air Canada.

WestJet was accessing a confidential Air Canada website
designated for reservations.
 As
part of the settlement WestJet will pay Air
Canada’s investigation and litigation costs of $5.5
million and make a $10 million donation in the name
of both airlines to children’s charities across Canada.
+
What can be done
to restore trust in
business and business
leaders?
+
Laws don’t make
people honest,
reliable or truthful.
If laws were a big
deterrent, there
would be much
less crime.
+
Ethical Standards Are
Fundamental
Moral Values - Right
Integrity
Honesty
Respect for
Human Life
Self-control
Courage
Selfsacrifice
+
Ethical Standards Are
Fundamental
Moral Values - Wrong
Cheating
Cowardice
Cruelty
+ Undercover Boss
Lush Cosmetics
Full episode on YouTube.com

Ethical Campaigns

We are, and always have
been, a campaigning
company.

We believe in standing up
for animal rights, protecting
the environment and
supporting humanitarian
causes.

With over 150 stores in North
America, we have a unique
platform to create positive
change in our world, and
we put our ethics into
practice through activism
and charitable giving.

Charitable Giving

Charitable giving is at the
heart of our business, and we
believe it's our responsibility to
advocate for the
environment, animals and
people in need.

In 2007, we invented a
beautiful hand and body
lotion called Charity Pot.

100% of the purchase
price goes towards
supporting humanitarian,
environmental and
animal rights causes
locally and around the
world.
+
Ethics Begins with
Each of Us
 Ethical
behaviour should be exhibited in our
daily lives, not just in a business
environment.
+
Canadian Age Differences
in Charitable Giving
+
Why Canadians Give
89% feel compassion for those in need
85% to help a cause in which they personally believe
79% want to make a contribution to their community
61% are personally affected by the organization’s cause
27% to fulfill religious obligations or beliefs
23% because of the income tax credit they will receive
+
Age Differences in
Canadian Volunteers
+
Why Canadians Volunteer
93% to make a contribution to the community
78% to use their skills and experiences
59% personally affected by the organization’s cause
48% to explore one’s own strengths or because their friends volunteer
46% to network with or meet people
22% to improve job opportunities
21% to fulfill religious obligations or beliefs
+
Ethics Begins with
Each of Us
We cannot expect society to become
more moral and ethical unless we as
individuals commit to becoming more
moral and ethical ourselves.
+
Young people learn from the
behaviour of others
Ethical Behaviour
How can adults affect
Trojan’s behaviour?
How can you affect
future Trojan’s
behaviour?
+
Ethics Begins with Each of Us
 In
a study conducted on
one college campus,
80% of students
surveyed admitted to
cheating.
 One
school reported that
half of its plagiarism cases
involved students cutting
and pasting information
from a website without
crediting the source.
 To
fight this problem,
many instructors now use
services such as
Turnitin.com.
+
What is an
Ethical
Dilemma?
There is no desirable
alternative.
You must choose between
equally unsatisfactory
alternatives.
+ Ethical
Dilemma Questions
1.
Is it legal?
2.
Is it balanced?
3.
How will it make
you feel about
yourself?
+
Ethical Dilemma Questions
1.
Is it legal?

Am I violating any law or company policy?

Whether you are thinking about:

having a drink and then driving home

gathering marketing intelligence or

hiring or firing employees

It is necessary to think about the legal
implications of what you do.

This question is the most basic one in
behaving ethically in business.
+ Ethical
2.
Dilemma Questions
Is it balanced?

Am I acting fairly?

Would I want to be treated this way?

Will I win everything at the expense of another party?

Win-lose situations often end up as lose-lose situations.


There is nothing like a major loss to generate retaliation
from the loser. For example many companies that were
merely suspected of wrong doing have seen their stock
drop dramatically.

Not every situation can be completely balanced, but it is
important to the health of our relationships that we avoid
major imbalances over time.
An ethical business person has a win-win attitude
trying to benefit all parties involved.
+
Ethical Dilemma Questions
3.
How will it make me feel about myself?

Would I feel proud if my family or friends learned of my
decision?

Would I be able to discuss the proposed situation or
action with my immediate supervisor? The company’s
clients?

How would I feel if my decision were announced on the
news?

Will I have to hide my actions?

Am I feeling unusually nervous?

Decisions that go against our sense of right and wrong make
us feel bad – they corrode our self-esteem.

An ethical business person does what is proper as well as
what is profitable.
+
Progress Assessment
1.
What is ethics?
2.
How does ethics differ from legality?
3.
When faced with ethical dilemmas,
what questions can you ask yourself
that might help you make ethical
decisions?
+
Managing
Businesses Ethically
& Responsibly
People learn their standards
and values from observing
what others do, not from what
they say.
+ Managing Businesses
Ethically & Responsibly
A
business should be managed ethically for
many reasons to:
Maintain a good reputation
Attract and keep customers
Avoid lawsuits
Reduce employee turnover
Avoid government intervention
Please customers, employees and society and
Do the right thing
+
Setting Corporate Ethical
Standards
Although ethics codes vary greatly, they can be
classified into two major categories:
Compliance-based Ethics

Ethical standards that
emphasize preventing
unlawful behaviour by
increasing control and by
penalizing wrongdoers.
Integrity-based Ethics

Ethical standards that
define the organization’s
guiding values, create an
environment that
supports ethically sound
behaviour, and stress a
shared accountability
among employees.
+
Help Improve Business Ethics
1.
Top management must adopt and unconditionally
support an explicit corporate code of conduct.
2.
Employees must understand that expectations for
ethical behaviour begin at the top and that senior
management expect all employees to act
accordingly.
3.
Managers and others must be trained to consider
the ethical implications of all business decisions.
4.
An ethics office must be set up.
5.
Outsiders such as suppliers, subcontractors, and
customers must be told about the ethics program.
6.
The ethics code must be enforced.
+
Ethics Officers
 The
most effective ethics officers:
set a positive tone
communicate effectively
relate well with employees at every level of the company
equally comfortable serving as counsellors or as investigators
trusted to maintain confidentially
can conduct objective investigations and ensure the process is fair
can demonstrate to stakeholders that ethics is important in everything the
company does
+ Whistle-blowing
Legislation in Canada
 Bill
 It
C-11 was passed in November 2005.
provides for significant powers to
investigate wrongdoing; it contains clear
legal prohibition of reprisal against those
who make good-faith allegations of
wrongdoing; and it proposes measures to
protect the identity of persons making
disclosures.
+
Progress Assessment
1.
How are compliance-based ethics
codes different from integrity-based
ethics codes?
2.
What are the six steps to follow in
establishing an effective ethics
program in a business?
3.
What protection is being offered to
whistle-blowers in the public sector?
+
Corporate Social
Responsibility
(CSR)
A business’s concern for
the welfare of society as
a whole.
+ The
Social Performance of
a Company:
Dimension
Description
Corporate
philanthropy
includes charitable donations to non-profit groups of
all kinds.
Corporate social
initiatives
include enhanced forms of corporate philanthropy in
that they are more directly related to the company’s
competencies.
Corporate
responsibility
includes everything from hiring minority workers to
making safe products, minimizing pollution, using
energy wisely, and providing a safe working
environment. Everything that has to do with acting
responsible within society and toward employees.
Corporate policy
refers to the position a firm takes on social and
political issues.
+
Social Responsibility Videos
 Adobe
Corporate
Social Responsibility
 Samsung
Social
Responsibility

Samsung’s Solar Powered
Internet Schools provide
opportunities for bright,
young minds like Lefa to
pave the way for her
community.
+
Corporate Responsibility in the
Twenty-first Century
There are different views of coroporate
responsibility to stakeholders:
The strategic
approach requires
that management’s
primary orientation be
toward the economic
interests of
shareholders.
1.
1.
The pluralist approach
recognizes the special
responsibility of
management to raise
profits, but not at the
expense of employees,
suppliers, and members
of the community.
2.

This view says that
corporations can make a
profit only when they fulfill
their moral responsibilities to
society as a whole.
+
Responsibility to Customers

Customers prefer to do business with companies they trust
and, even more important, do not want to do business
with companies they don’t trust.

One responsibility of business is to satisfy customers by
offering them goods and services of value.

One of the surest ways of failing to please customers is not
being totally honest with them.

The payoff of socially conscious behaviour could result in
new business as customers switch from rival companies
simply because they admire the company’s social efforts
– a powerful competitive edge.
+
Responsibility to Investors
 Ethical
behaviour is good for shareholder
wealth.
 Unethical
behaviour may seem to work for the
short term, but it guarantees eventual failure.
 In
the 2005 Canada’s Most Respected
Corporations survey, 89% of Canadian CEOs
agreed with the statement that “companies
that are more respected by the public enjoy a
premium in their share price”.
+
Insider Trading
 An
unethical activity in which insiders use
private company information to further
their own fortunes or those of their family
and friends.
 Martha
Walters:

Stewart’s Interview with Barbara
Part 1 and Part 2
+
Responsibility of Employees
 Once
a company creates, jobs, it has an
obligation to ensure that hard work and talent
are fairly rewarded.
 Part
of treating employees well is ensuring that
employers of all sizes provide a safe work
environment.

The Canadian Labour Congress (CLC) believes that
there are well over 1,000 workers who die annually from
workplace causes and there are more than one million
who suffer workplace injuries.
 When
employees feel they’ve been treated
unfairly, they often strike back.

How do you think employees would strike back against
the company?
+ Responsibility
of Society
 Businesses
need to develop long-term
profitable relationships with their
customers by establishing repeat
business.

Repeat business is based on buying safe and
value-laden products, at reasonable prices.
 Many
companies believe business has a
role in building a community that goes
well beyond giving back.

Their social contributions include cleaning up the
environment, building community toilets, providing
computer lessons, caring for the elderly, and
supporting children from low-income families.
+ Responsibility to the
Environment
 Businesses
are often criticized for their role in
destroying the environment.

The Sydney Tar Ponds are North America’s largest
hazardous waste site.

More than 80 years of discharges from the steelproducing coke ovens near the harbour have filled
Muggah Creek with contaminated sediments.

Two decades later, there have been several attempts
and more than $100 million spent to clean up this
toxic site.

In May 2004, the governments of Canada and Nova
Scotia committed $400 million to the cleanup. It is
expected that this cleanup will take ten years.
+ Social Auditing

A social audit is a systematic evaluation of an
organization’s progress toward implementing programs
that are socially responsible and responsive.

There are four types of groups that serve as watchdogs
regarding how well companies enforce their ethical and
social responsibility policies:
1.
Socially conscious investors who insist that a company
extend its own high standards to all its suppliers.
2.
Environmentalists who apply pressure by naming
names of companies that don’t abide by the
environmentalists’ standards.
3.
Union officials who hunt down violations and force
companies to comply to avoid negative publicity.
4.
Customers who take their business elsewhere if a
company demonstrates unethical or socially
irresponsible practices.
+
Progress Assessment
1.
What is corporate social responsibility, and
how does it relate to each of a business’s
major stakeholders?
2.
How does the strategic approach differ from
the pluralist approach?
3.
What is a social audit, and what kinds of
activities does it monitor?
+
International Ethics and
Social Responsibility
 Prime
Minister Stephen
Harper introduced
legislation to make the
government more
honest and transparent
through the Federal
Accountability Act.

This Act promises to end
undue influence on
government by big
business, unions, and
industry lobbyists.
+ International Ethics and Social
Responsibility
 The
former Liberal federal government
supported the Kyoto Protocol

The first global agreement that established legally
binding targets for cutting greenhouse gas emissions
believed to upset the Earth’s climate and temperature,
and committed to decrease gas emissions between
2008 and 2012.

The election of a Conservative government in early
2006 brought about a reversal in Canada’s climate
change policy.
 The
New Kyoto Agreement
+
International Ethics and
Social Responsibility

Many businesses are demanding socially responsible
behaviour from their international suppliers by
ensuring that suppliers do not violate domestic
human rights and environmental standards.

In contrast to companies that demand their
suppliers demonstrate socially responsible behaviour
are those that have been criticized for exploiting
workers in less developed countries.

Nike, has been accused by human rights and labour
groups of treating its workers poorly while lavishing millions
of dollars on star athletes to endorse its products.

Nike is working to improve its reputation, in part by joining
forces companies and six leading anti-sweatshop groups
to create a single set of labour standards with a common
factory-inspection system.
+
International Ethics and Social
Responsibility

The justness of requiring international suppliers to adhere
to domestic ethical standards is not as clear-cut as you
might think.

Is it always ethical for companies to demand compliance with
the standards of their own countries?

What about countries in which child labour is an accepted
part of the society and families depend on the children’s
salaries for survival?

What about foreign companies doing business in Canada –
should these companies comply with Canadian ethical
standards? What about multinational corporations?
+
International Ethics and
Social Responsibility
 The
International Standards Organization (ISO)
developed a new standard on social
responsibility that includes guidelines on product
manufacturing, fair pay rates, appropriate
employee treatment, and hiring practices.

These standards are advisory only and will not be used
for certification purposes.
+
International Ethics and Social
Responsibility
 The
formation of a single set of
international rules governing
multinational corporations is unlikely in
the near future.
 In
many places, “Fight corruption”
remains just a slogan, but even a slogan
is a start.
+
Summary
1.
Explain why legality is only the first step in behaving
ethically and ask the three questions one should
answer when faced with the potentially unethical
action.
2.
Describe management’s role in setting ethical
standards and distinguish between compliance-based
and integrity-based ethics codes.
3.
List the six steps in setting up a corporate ethics code.
4.
Define corporate social responsibility and examine
corporate responsibility to various stakeholders.
5.
Discuss the responsibility that business has to customers,
investors, employees, society, and the environment.