ETHICS

F SO CIA L RE S PO N S I B ILI T Y
AS A DIM E NS IO N O
Corporate Discretiona
ry
Social Responsibil
ity
Responsibilities Contribute to the
Community

Pyramid and
Quality of Life

Ethical Responsibility
Be Ethical
Do What Is Right
Avoid Harm

Legal Responsibility
Obey the Law

Economic Responsibility
Be Profitable
ETHICS and SOCIAL RESPONSIBILITY

BUSINESS ETHICS SOCIAL RESPONSIBILITY

 the principles and standards management’s obligation to make
that determine acceptable choices and take actions that will
conduct in business contribute to the welfare and interests
organizations of society as well as the organization
a business’s obligation to maximize
its positive impact and minimize its
negative impact on society
•Although many people use the terms social responsibility
and ethics interchangeably, they do not mean the same
thing
•Business ethics relates to an individual’s or a work
group’s decisions that society evaluates as right or wrong,
whereas social responsibility is a broader concept that
concerns the impact of the entire business’s activities on
society
ETHICAL RESPONSIBILITY
• are responsibilities that a company puts on itself because its owners believe
it's the right thing to do -- not because they have an obligation to do so

• responsibilities of the company to their employees, customers and society as

a whole

• could include being environmentally

friendly, paying fair wages or refusing
to do business with oppressive
countries
 The most basic ethical and social responsibility concerns have been
codified as laws and regulations that encourage businesses to conform to
society’s standards, values, and attitudes.
At a minimum, managers are expected to obey these laws and
regulations.
Most legal issues arise as choices that society deems unethical,
irresponsible, or otherwise unacceptable. However, all actions deemed
unethical by society are not necessarily illegal, and both legal and ethical
concerns change over time.
 Business law refers to the laws
and regulations that govern the
conduct of business. Many problems
and conflicts in business can be
avoided if owners, managers, and
employees know more about
business law and the legal system.

 Business ethics, social

responsibility, and laws together act
as a compliance system requiring
that businesses and employees act
responsibly in society.
 ETHICAL
RESPONSIBILITY
FACTORS
• When things are good, it’s easy to be ethical. If customers are
plentiful, employees are happy and income is soaring, there is
little temptation to cut ethical corners to secure a bit more
profit. But when times are hard, the temptation to neglect your
ethical responsibilities increases. For example, you might toy
with the idea of using company funds to cover personal debts.
EFFECTS
• Ethical missteps -- whether by a company or just a single person within
a company -- can destroy even the biggest organizations, according to
the book “Ethics and Corporate Social Responsibility: Why Giants Fall,”
by Ronald R. Sims. Common ethical problems include shady accounting
practices that hide fraud and theft from employees and investors. Such
violations can lead to criminal charges, loss of consumer confidence,
employee outrage and a host of other negative outcomes.
MORAL STANDARDS
• Maintain an ethically responsible company by setting clear moral
standards from the outset. For example, create and enforce a code
of conduct that ensures employees treat customers fairly. To avoid
even the appearance of unethical behavior, be as transparent as
possible in all your dealings with customers, suppliers, employees
and the surrounding community.
CONSIDERATIONS
• increasingly, consumers expect businesses to be good citizens.
For example, environmentally conscious consumers often avoid
supporting businesses that rely on unsustainable practices or
that pollute heavily. So, in addition to whatever internal ethical
responsibility you might feel you have, you also should consider
how your company’s morality could affect its profitability.
EXAM
PLES
 A small business owner has
a responsibility to be honest
with his employees so they
can make informed decisions
about their careers.
 A responsibility to respect his customers, who
expect to receive exactly what they are paying for.
 A responsibility to invest
in the community upon
which his company’s well-
being depends.
 “ THE TIME IS ALWAYS
RIGHT
TO DO WHAT IS RIGHT. ”
-Martin Luther King
 THE END Thank You for Listening
SOURCES
• http://smallbusiness.chron.com/meaning-ethical-responsibility-56224.html
• http://smallbusiness.chron.com/four-types-corporate-social-responsibility-54662.html
• http://www.cengage.com/resource_uploads/static_resources/0324405715/8910/0-324-40571-5_04_REV.pdf
• http://highered.mheducation.com/sites/dl/free/0070921989/226745/ferrell_sampleCH02.pdf