In this chapter, we take a look at the role of ethics and social responsibility in business decision making. After reading this chapter, you will be able to: Define business ethics and examine its importance; detect some of the ethical issues that may arise in business, specify how businesses can promote ethical behaviour; define social responsibility and explain its relevance to business; debate an organization's social responsibilities to owners, employees, consumers, the environment, and the community. | Chapter Three Business Ethics and Social Responsibility Comparison of Business Ethics and Social Responsibility Business Ethics Refers to the principles and standards that define acceptable conduct in the world of business. Social Refers to a business’s obligation Responsibility to maximize its positive impact and minimize its negative impact on society. 3-1 Ethical Issue An identifiable problem, situation, or opportunity that requires a person to choose from among several actions that may be evaluated as right or wrong, ethical or unethical. 3-2 Reactions to Unethical Employers What happened when surveyed employees found out their employers were doing something that was against the employee’s ethical standards tried to resolve the situation without losing job 40% talked to boss 38% did nothing 9% quit 5% other 1% not sure 7% 3-3 Source: Yankelovich Partners Survey, PRNewswire, October 6, 1998. Reasons for Not Reporting Observed Misconduct 1. Fear of not being considered a team . | Chapter Three Business Ethics and Social Responsibility Comparison of Business Ethics and Social Responsibility Business Ethics Refers to the principles and standards that define acceptable conduct in the world of business. Social Refers to a business’s obligation Responsibility to maximize its positive impact and minimize its negative impact on society. 3-1 Ethical Issue An identifiable problem, situation, or opportunity that requires a person to choose from among several actions that may be evaluated as right or wrong, ethical or unethical. 3-2 Reactions to Unethical Employers What happened when surveyed employees found out their employers were doing something that was against the employee’s ethical standards tried to resolve the situation without losing job 40% talked to boss 38% did nothing 9% quit 5% other 1% not sure 7% 3-3 Source: Yankelovich Partners Survey, PRNewswire, October 6, 1998. Reasons for Not Reporting Observed Misconduct 1. Fear of not being considered a team player 2. Didn’t believe corrective action would be taken 3. Feared retribution or retaliation form supervisor or management 4. No one else cares about business ethics so why should I? 5. Didn’t trust organization to keep report confidential 3-4 Source: 1997 Society for Human Resource Management/Ethics Resource Center Business Ethics Survey Report, p. 21. Ethical Issue Categories Conflict of interest Fairness and honesty Communications Business associations 3-5 Questions to Consider in Determining Whether an Action is Ethical Are there any potential legal restrictions or violations that could result from the action? Does you company have a specific code of ethics or a policy on the action? Is this activity customary in your industry? Are there any industry trade groups that provide guidelines or codes of conduct that address this issue? 3-6a Questions to Consider in Determining Whether an Action is Ethical Would this activity be accepted by your coworkers? Will your decision or action .
