Chapter 2 : Business Ethics and Social Responsibility

Business Ethics.
- Standards of conduct and moral values that businessmen rely on to guide their actions
and decisions in the workplace
- They must consider wide range of social issues when decision-making
- “Ethics compliance officers” must discourage wrongdoing; ensure ethical standards met
- Integrity = adhering to deeply held ethical principles in business situations

Factors influencing Business Ethics.

- Individual ethics and technology influence the ethical environment of a business
- Individual ethics are influenced by…
- Personal exp, peer pressure, and organizational culture
- Family, cultural, and religious standards
- Setting unrealistic goals for employee performance can lead to unethical behaviour

Social Responsibility.
- CSR: To enhance society’s well-being through philosophies, policies, procedures, and
actions is the primary objective
- Businesses have responsibilities to customers, employees, investors, and society
- Mgmt’s acceptance of the obligation to put an equal value on … when evaluating the
firm’s performance
- Profit = consumer satisfaction = societal well-being
- Need to balance profit and ethics
- Why pay attention?
- Required by law
- Enhances the company's image
- It is the right thing to do…

- Corporate Philanthropy : Businesses giving back to the communities in which they

earn profits
- Cause-related Marketing : Tying firms’ mkting efforts to their charitable giving
- e.g. Green marketing : marketing strategy; promotes environmentally safe products and
production methods
- Much of the raw material that manufacturers need can be obtained through
recycling

How Organizations Shape Ethical Behaviour.

- Conflicts of interest
- Occur when an action that benefits one person may harm another