Conducting Business Ethically and Responsibly

Chapter 4

Sr.Chapter Chapter HeadingNo.No.

1. 3 Understanding the Global context of business (031012)2. 4 Conducting Business Ethically and Responsibly (250212)3. 6 Organizing the Business Enterprise4. 7 Understanding Entrepreneurship and Small Business5. 8 Managing Human Resources6. 9 Understanding Employee Motivating, Satisfying and

Leadership7. 11 Understanding Marketing Processes and Consumer

Behavior8. 16 Managing Quality and Productivity9. 17 Managing Information Systems and Communication

Technology10. 19 Understanding Money and Banking11. 20 Intermediate Term and Lease Financing

Course Outline

3

Marks Distribution

50 Terminal Examination20 Mid Term Examination15 Quizzes15 Final Assignment

ETHICS IN THE WORKPLACE Assessing ethical behavior Company practices and Business Ethics

SOCIAL RESPONSIBILITY The Stakeholder Model of Responsibility The evolution of Social Responsibility Contemporary Social Consciousness

AREAS OF SOCIAL RESPONSIBILITY Responsibility Towards the Environment Responsibility Towards Customers Responsibility Towards Employees Responsibility Towards Investors

IMPLEMENTING SOCIAL RESPONSIBILITY PROGRAMS

approaches to social responsibility Managing Social Responsibility programs Social responsibility and the Small business

TOC

Ethics in the Workplace

© 2009 Pearson Education, Inc.

EthicsBeliefs about

right and wrong and actions that

reflect beliefs

Social Responsibilit

yObligation of a

business to contribute to

society

Definitions• Business

• A business (also known as enterprise or firm) is an organization engaged in the trade of goods, services, or both to consumers. Businesses may be privately owned, not-for-profit or state-owned.

• Ethics:• Beliefs about what is right and wrong or good and bad in

actions that affect others• Or• Ethics are moral principles by which people conduct

themselves personally, socially, and professionally

Definitions• Personal ethics:

• moral principles that guide an individual• Business ethics:

• rules, based on moral principles, used by a business/ manager/ employer.

• Ethical Behavior• Behavior conforming to generally accepted social norms

concerning beneficial and harmful actions

• Unethical Behavior• Behavior that does not conform to generally accepted

social norms concerning beneficial and harmful actions

Definitions• whistleblower

• (an informant who exposes wrongdoing within an organization in the hope of stopping it) "the law gives little protection to whistleblowers who feel the public has a right to know what is going on";

Assessing Ethical Behavior

• Ethical Norms and the Issues They Entail

– Utility: Does a particular act optimize the benefits to those who are affected by it? Do all relevant parties receive “fair” benefits?

– Rights: Does the act respect the rights of all individuals involved?

– Justice: Is the act consistent with what’s fair?

– Caring: Is the act consistent with people’s responsibilities to each other?

Assessing Ethical Behavior

Classifying Business Decisions

Ethical

Unethical

Illegal

Legal

Unethical and Illegal

Ethical and Legal

Unethical but Legal

Ethical but

Illegal

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ETHICS

Company Practices and Business Ethics

• Encouraging Ethical Behavior Involves:– Adopting written codes of conduct and

establishing clear ethical positions for the conduct of business

– Having top management demonstrate its support of ethical standards

– Instituting programs to provide periodic ethics training

– Establishing ethical hotlines for reporting and discussing unethical behavior and activities

© 2009 Pearson Education, Inc.

Factors That Cause WorkersTo Act Unethically

Pressure to meet sales, budget or profit goals

Lack of recognition Personal financial

worries Balancing work & family Poor communication

Top Five Unethical/IllegalBehaviors of Workers

Cut corners in quality control

Covered up incidents Abused or lied about sick

days Lied to or deceived

customers Put inappropriate pressure

on others

Fostering Ethical Behavior

Leadership Codes of Conduct

Compliance-based Integrity-Based

Social Audits Whistle Blowing

Factors Influencing Managerial Ethics

Individual Organizational Environmental

ValuesWork

Background

Family Status

Personality

Top Level Mgmt. Philosophy

The Firm’s Reward System

Job Dimensions

Competition

Economic Conditions

Social/Cultural Institutions

Business Mission Statement

Why? What? How?

18

Telenor Pakistan

19

Proctor & Gamble

20

Uni-lever Pakistan

SOCIAL RESPONSIBILITY

Three Levels of Social Responsibility

Societal Responsibility

Stakeholder Responsibility

Profit Responsibility

Owners/Stockholders

General

PublicCustomers Employees

Suppliers/Distributors

Ecological

Environment

Public Interest Groups

Source: Marketing, 5/E by Berkowitz, Kerin, Hartley, and Rudelius.

© 2009 South-Western, a division of Cengage Learning

24

RESPONSIBILITY TO……EMPLOYEES

INVESTORS

COMMUNITY

ENVIRONMENT

CUSTOMERS

Creating Jobs that Work

Sustainable Development

Value, Honesty and Communication

Fair Stewardship and Full Disclosure

Business and the Greater Good

Responsibility to Employees

Working Conditions

Equal Employment Opportunity

Affirmative Action

Diversity Training

Economic Security

Child Care/Parental Leave

Employee Dignity

Conflict of Interest

What Concerns WorkersMost on the Job?

Hazardous Materials 23%

Injury 20% Repetitive job motions

10% Poor ventilation

7% HIV/Aids 6%

Percent

Responsibility to Customers/Environment

Right To Safety

Right To Be Informed

Right To Choose

Right To Be Heard

Quality Of Life

Ecology/Pollution

Responsibility to Society, Investors, & Suppliers

Fairness Honesty Timely Action Appropriate Compensation

Philanthropy

Why People Volunteer

0 20 40 60 80 100

Help People

Be With People They Enjoy

Learn Issues/Problems

Percent of Respondents

Total is more than 100% because respondents could give more than one reason.

Contributions to Charity(In Billions of Dollars)

$9$10

$120

$12 IndividualsFoundationsBequestsCorporations

Source: Forbes Dec. 15, 1997

New Economy & New Philanthropy

Foundation Donation

Bill & Melinda Gates Foundation $21.8*

Ford Foundation 13.1

Packard Foundation 13.0

Lilly Foundation 11.2

Robert Wood Johnson Foundation 8.3*In Billions

Source: Business Week, Mar. 13, 2000

Corporate Annual GivingMerckJohnson & JohnsonPfizerEli LillyIBMMicrosoftIntelBank of America

$221.0*

176.2

123.9

121.4

116.1

104.7

101.0

91.5

Source: The Taft Group * In Millions

Most Admired Companies by Industry

Apparel Levi-Strauss Airlines Southwest Food Services McDonald’s Food Products Campbell’s Beverages Coca-Cola Electronics Intel

Industry Company

Source: Fortune Magazine

International Ethics &Social Responsibilities

U.S. not unique Japan/S. Korea/China = influence

peddling Mexico = child labor

Leaders being held to new/higher standards Chinese prison labor McDonald’s using rain forest land for

cattle grazing