Ethics and social responsibility
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Ethics and Social Responsibility. Chapter 4. Learning Objectives. Explain why ethics are important in business Describe a code of ethics Discuss Ethical Dilemmas Describe Laws that deal with ethical issues Explain the change in corporations’ views of social responsibility

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Learning objectives
Learning Objectives

  • Explain why ethics are important in business

  • Describe a code of ethics

  • Discuss Ethical Dilemmas

  • Describe Laws that deal with ethical issues

  • Explain the change in corporations’ views of social responsibility

  • Describe the ways in which businesses demonstrate their social responsibility.


  • See page 83

  • Read the paragraph

  • Why might it be challenging for a manager to balance the needs of the company and the needs of a worker?

  • Imagine you are the Vice President of Social Responsibility at your workplace or school. What changes would you make in order to prevent unfair practices?


  • Get into groups of 2 and make a list of personal ethics.

  • Share Ideas

Ethics in business

Ethics in Business

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

Importance of ethics
Importance of Ethics

  • Everyone has Personal Ethics

  • Helps decide in different situations

  • Businesses need ethics in order to know how to behave…also

  • Business Ethics reflect companies beliefs

    • What Actions are appropriate?

    • How to be fair among people?

Codes of Ethicsa document that outlines the principles of conduct to be used in making decision within an organization.

Areas they cover:

  • 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

  • Protections of the environment

Behaving ethically

Behaving Ethically

One bad decision can make or break a company!

Behaving honestly
Behaving Honestly

  • Many situations the ethical course of action is clear cut

  • Employee Theft

    • Embezzle Money

    • Steal supplies

    • Take Bribes

    • Submit false expense reports

  • Don’t lie about the hours

  • Never falsify documents

Sarbanes oxley act of 2002
Sarbanes-Oxley Act of 2002

  • 2001- Enron Corporation

    • World’s largest traders in gas, electricity, etc

    • Collapsed in a scandal

    • Declared bankruptcy

    • Crimes

      • Deceiving investors

      • Inflating profits

      • Hiding debts

      • Arthur Anderson convicted of Obstructing Justice

  • WorldCom

    • Improperly booked over 7 billion in profits

  • President Bush signed

  • Contains important rules affecting the reporting and corporate governance of public companies and their directors and officers

  • Major provisions

    • Periodic Reports filed with SEC

    • Prohibits most loans to directors in beneficial ownership within 2 days after a transaction has been executed

Solving ethical dilemmas
Solving Ethical Dilemmas

  • Have you defined the problem accurately?

  • How would you define the problem if you stood on the other side of the fence?

  • Whom could your decision or action injure? Can you discuss the problem with the affected parties before you make your decision?

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

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


  • You are going to get into groups of 4 or 5 and look at the Ethical Dilemma.

  • As a group you are going to look at the dilemma and answer the questions on the prior slide.

  • As a group you are going to come to group decision as how you would handle this.

  • Then you are explain to the class what you situation is and how you would handle it

  • When you are done in your group

    • Write in your Journal

    • Today’s Date

    • Would you have done things differently as an individual.

Here are your groups
Here are your Groups

Group 1

Group 2

  • Aubrey Anselmo

  • Linh Dang

  • Chandler Fish

  • Josh Gray

  • Taylor Carper

  • Ashley Davis

  • Terry Forward

  • Ashley Kleine

Here are your groups1
Here are your Groups

Group 3

Group 4

  • Ryan Morey

  • Jamie Reynolds

  • Karlye Staggs

  • Kyle Reeser

  • Kelly Yaklin

  • Kyle Thick

  • Matt Richardson

  • Kendyl Staggs

  • Katie Thiel

Laws relating to ethics in business
Laws Relating to Ethics in Business

  • Competitive Behavior

  • Consumer Protection

  • Environmental Protection

Competitive behavior
Competitive Behavior

  • All Companies operating in U.S. must abide by these laws

    • The Sherman Act

      • Illegal to monopolize trade

      • Able to compete fairly

    • The Clayton Act

      • 1914

      • Illegal to charge different prices to different wholesale customers

      • Example: Manufacturer of Steel cannot charge one price to GM and another to Ford

      • Bans requiring a customer to purchase a second good

        • Hardware cannot charge for software

  • The Wheeler-LEA Act

    • 1938

    • Deceptive Acts or practices

    • False Advertising

    • Label consequences

    • Example: Cigarette Boxes

Consumer protection
Consumer Protection

  • Food and Drugs

    • Federal Food, Drug and Cosmetic Act

      • Bans sale of impure, improperly labeled, falsely guaranteed, and unhealthful foods, drugs, and cosmetics

      • Enforced by Food and Drug Administration (FDA)

  • Consumer Products

    • Consumer Product Safety Commission (CPSC)

      • Establishes minimum safety standards

      • Can force manufacturers to recall items

      • Examples?

  • Loans

    • Series of Laws/ Truth in Lending Act

    • Makes Creditors inform customers up front what the fees and interest will be.

    • Equal Credit Opportunity Act

      • Cannot discriminate

Environmental protection
Environmental Protection

  • 1960’s

  • The National Environmental Policy Act of 1969

    • Key Piece

    • Created Environmental Protection Agency (EPA)

      • Protect Human health and safeguard the air, water and land

  • Clean Air Act of 1970

    • Regulates air emissions

  • The Toxic Substances Control Act of 1976

    • Track Industrial Chemicals produced or imported in US

  • The Clean Water Act

    • Set standards on the type and quantity of pollutants that industries put in water

Ethical standards and culture
Ethical Standards and Culture

  • Standards of ethics differ around the world

    • Here it might be ethical in U.S. but not in another country

    • As a business manager that works internationally needs to have an understanding of ethics in different cultures

Ethical standards and culture1
Ethical Standards and Culture

Corporate Gift Giving

Intellectual Property

  • Corporate Gift Giving

    • Differ around the world

      • Some Cultures Gifts are expected and if you don’t bring one it is an insult

        • Japan

      • United States government officials cannot accept gifts from businesses

  • Refers to ownership of Property

    • Inventions

    • Books

    • Movies

    • Computer Programs

  • Creators have exclusive right to market and sell their work.

    • Patents

    • Trademark

    • Copywright

  • Very important to businesses

    • Especially in Software- hard to track

Social responsibility
Social Responsibility

  • Changing Views of Social Responsibility

  • Measuring Social Responsibility

Changing views of social responsibility
Changing Views of Social Responsibility

Social Responsibility: the obligation that individuals or businesses have to help solve social Problems

  • Profit Maximization

    • During 19th and early 20th Century

  • Trusteeship Management

    • 1920’s and 1930’s

    • Recognized that owners of businesses had obligations to do more than just earn profits

    • Obligations to: Employees, Customers, and their creditors

  • Social Involvement

    • 1960’s

    • Businesses should use their influence and financial resources to address Social Problems

    • Diversity is one big thing companies got involved in.

Measuring social responsibility
Measuring Social Responsibility

Social Audit: a review of a business’s social responsiveness.

  • Philanthropy and Volunteerism

    • Contributing time and money to charitable, cultural, and civic organizations

    • Improve human Welfare

  • Environmental Awareness

  • Sensitivity to Diversity and Quality of Work Life

End of section assignment
End of Section Assignment

Management Careers in Focus

Journal Write

  • Add Property Management to your Management Career PowerPoint

  • Use the same requirements that you have used in the past.

  • Page 93

  • In looking at the laws that we talked about in Chapter 4 which ones do you think will be impacted the most in the next 20 years.

  • Write your answer in your journal under Today’s date