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INTRODUCTION TO INTRODUCTION TO BUSINESSBUSINESS
University of Management and Technology1901 N. Fort Myer Drive
Arlington, VA 22209 USAPhone: (703) 516-0035
Fax: (703) 516-0985Website: www.umtweb.edu
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CHAPTER 5:CHAPTER 5:Conducting Business Conducting Business Ethically and ResponsiblyEthically and Responsibly
Griffin, R. W. & Ebert, R. J. Business (7th ed.) © 2004 Prentice Hall.
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Chapter OutlineChapter Outline
Ethics in the Workplace
Social Responsibility
Areas of Social Responsibility
Implementing Social Responsibility Programs
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What Is Ethics?What Is Ethics?
Beliefs about what is right and wrong or good and bad in actions that affect others
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Ethics in the WorkplaceEthics in the Workplace
Ethical behavior is behavior conforming to generally accepted social norms concerning beneficial and harmful actions
Unethical behavior is behavior that does not conform to generally accepted social norms concerning beneficial and harmful actions
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What Is Business Ethics?What Is Business Ethics?
Ethical or unethical behaviors by a manager or employer of an organization
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Business and Managerial EthicsBusiness and Managerial Ethics
Managerial ethics are standards of behavior that guide individual managers in their work. Three broad categories:
Behavior toward Employees
Behavior toward the Organization
Behavior toward Other Economic Agents
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Steps in Making Ethical JudgmentsSteps in Making Ethical Judgments
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Company Practices and Business EthicsCompany Practices and Business Ethics
Adopting Written CodesMany companies have written codes that formally announce their intent to do business in an ethical manner.
Instituting Ethics ProgramsEthical responses can belearned through experience.
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Core Principles and Organizational Core Principles and Organizational ValuesValues
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What Is Social Responsibility?What Is Social Responsibility?
The attempt of a business to balance its commitments to groups and individuals in its environment, including customers, other businesses, employees, investors and local communities
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What Are Organizational Stakeholders?What Are Organizational Stakeholders?
Those groups, individuals and organizations that are directly affected by the practices of an organization and who therefore have a stake in its performance
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Major Corporate StakeholdersMajor Corporate Stakeholders
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Areas of Social ResponsibilityAreas of Social Responsibility
Responsibility Towardthe Environment
Responsibility Toward Customers
Responsibility Toward Employees
Responsibility Toward Investors
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Responsibility Toward the EnvironmentResponsibility Toward the Environment
Controlling pollution—the injection of harmful substances into the environment—is a significant challenge to contemporary business.
Air Pollution
Water Pollution
Land PollutionToxic Waste Disposal
Recycling
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C02 Emissions, Past and FutureC02 Emissions, Past and Future
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What Is Consumerism?What Is Consumerism?
Form of social activism dedicated to protecting the rights of consumers in their dealings with businesses
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Basic Consumer RightsBasic Consumer Rights
1. Consumers have a right to safe products.
2. Consumers have a right to be informed about all relevant aspects of a product.
3. Consumers have a right to be heard.
4. Consumers have a right to choose what they buy.
5. Consumers have a right to be educated about purchases.
6. Consumers have a right to courteous service.
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Unfair PricingUnfair Pricing
Collusion occurs when two or more firms agree to collaborate on such wrongful acts as price fixing
Price gouging is a response to increased demand with overly steep price increases
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Ethics in AdvertisingEthics in Advertising
Food product labeling
Misleading product claims
Deceptive advertising
Morally objectionable advertising
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Legal and Social CommitmentsLegal and Social Commitments
Businesses cannot practice illegal discrimination against people in any facet of the employment relationship.
Businesses should provide employees with equal opportunities for reward and advancement without regard to race, sex or other irrelevant factors.
Businesses should strive to ensure that the workplace is physically and socially safe.
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What Is a Whistle-Blower?What Is a Whistle-Blower?
Employee who detects and tries to put an end to a company’s unethical, illegal or socially irresponsible actions by publicizing them
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Responsibility Toward InvestorsResponsibility Toward Investors
Improper Financial ManagementCheck Kiting
Insider Trading
Misrepresentation of Finances
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Implementing Social Responsibility Implementing Social Responsibility ProgramsPrograms
Critics of socially responsible business oppose any business activity that threatens profits.
Proponents of socially responsible business believe that corporations are citizens and should help to improve the lives of fellow citizens.
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Approaches to Social ResponsibilityApproaches to Social Responsibility
Obstructionist stance involves the firm doing as little as possible and may involve attempts to deny or cover up violations
Defensive stance involves the firm meeting only minimum legal requirements in its commitments to groups and individuals in its social environment
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Approaches to Social ResponsibilityApproaches to Social Responsibility
Accommodative stance involves the firm, if specifically asked to do so, exceeding legal minimums in its commitments to groups and individuals in its social environment
Proactive stance involves the firm actively seeking opportunities to contribute to the well being of groups and individuals in the firm’s social environment
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Spectrum of Approaches to Social Spectrum of Approaches to Social ResponsibilityResponsibility
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Top 15 Corporate FoundationsTop 15 Corporate Foundations