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Conducting Business Ethically and Responsibly
Chapter 4
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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
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3
Marks Distribution
50 Terminal Examination20 Mid Term Examination15 Quizzes15 Final Assignment
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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
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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
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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
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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
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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";
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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
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Classifying Business Decisions
Ethical
Unethical
Illegal
Legal
Unethical and Illegal
Ethical and Legal
Unethical but Legal
Ethical but
Illegal
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11
ETHICS
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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.
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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
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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
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Fostering Ethical Behavior
Leadership Codes of Conduct
Compliance-based Integrity-Based
Social Audits Whistle Blowing
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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
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Business Mission Statement
Why? What? How?
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18
Telenor Pakistan
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Proctor & Gamble
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20
Uni-lever Pakistan
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SOCIAL RESPONSIBILITY
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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.
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© 2009 South-Western, a division of Cengage Learning
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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
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Responsibility to Employees
Working Conditions
Equal Employment Opportunity
Affirmative Action
Diversity Training
Economic Security
Child Care/Parental Leave
Employee Dignity
Conflict of Interest
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What Concerns WorkersMost on the Job?
Hazardous Materials 23%
Injury 20% Repetitive job motions
10% Poor ventilation
7% HIV/Aids 6%
Percent
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Responsibility to Customers/Environment
Right To Safety
Right To Be Informed
Right To Choose
Right To Be Heard
Quality Of Life
Ecology/Pollution
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Responsibility to Society, Investors, & Suppliers
Fairness Honesty Timely Action Appropriate Compensation
Philanthropy
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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.
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Contributions to Charity(In Billions of Dollars)
$9$10
$120
$12 IndividualsFoundationsBequestsCorporations
Source: Forbes Dec. 15, 1997
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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
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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
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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
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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