Business Ethics and Social Responsibility

1. Business Ethics and Social Responsibility Unit 1, Chapter 3

2. Business Ethics • Ethics – are the rules that help us tell the difference between right and wrong and encourage us to do the right thing. • Ethical Behaviour – is behaviour that conforms to ethics – individual beliefs and social standards about what is right and good. • Values – tell us what we think is important and this, in turn, helps us make decisions about right and wrong. • Morals – are the rules we use to decide what’s good and what’s bad.

3. What role should ethics play in Business? • A code of ethics – is a document that explains specifically how employees should respond in different situations. • Watch the DVD – Raging Bull • Class discussion to follow.

4. How can businesses resolve ethical dilemmas? • A dilemma is a situation where there is a difficult choice between two or more options. They have good points and bad points on both sides. But not all dilemmas are right-versus-wrong scenarios. • An ethical dilemma is a moral problem with potential right or wrong answers. It occurs in business when a business has a decision to make that weighs values and morals against profitability and competitiveness. • Whistle-blowing is the decision of an employee to inform officials or the public about a legal or ethical violation. The employee discovers unethical, immoral, or illegal actions at the workplace and has to make a decision about what to do.

5. What happens when people don’t behave ethically? • Fraud – is the crime of lying or pretending. Some businesses mislead consumers and try to trick them into buying something in order to maximize their profits. • Accounting scandals • An accounting scandal is a publicly exposed crime involving accountants or senior executives who alter accounting records for personal benefit. They typically take place in large corporations.

6. What happens when people don’t behave ethically? • A forensic accountant is an accountant who investigates legal and financial documents, looking for evidence of tampering. • Embezzlement is a type of accounting fraud in which an accountant or senior executive invents phony accounts and redirects company money into them for personal gain. • Assets are items that a business owns, such as buildings, land, equipment, cash, and receivables. • Liabilities are debts that a business owes. • Auditors are outside accountants who check the financial records of companies. • Insider trading – buying or selling shares in a company based on confidential information. This type of illegal trading is dealt with by the Provincial Securities Commission.

7. Ethics and Corporate Social Responsibility • Corporate Social Responsibility (CSR) – where a business exhibits their values, their ethics, and the contributions that they make to their communities. • CSR Principles • 1. Providing a safe and healthy work environment. • 2. Adopting fair labour policies. • 3. Protecting the environment. • 4. Being truthful in advertising. • 5. Avoiding price discrimination. • 6. Donating to charity,

8. CSR and Ethics • Should a business develop and follow their own business ethics, or should they simply follow the laws that apply to the business? • Duty to report – means that businesses must disclose all important information to shareholders, business partners, lenders, insurers, communities , regulators, consumers, employees, and investors. • Laws that Govern Corporate Ethics • 1. Workplace Safety – In Ontario, the Occupational Health and Safety Act (OHSA) was instituted to ensure workplace safety and health. This act defines the rights and responsibilities of workers. • 2. Antidiscrimination Issues – • Gender discrimination • Glass ceiling – describes the invisible barriers to senior leadership positions. Page 95 Ethical, Moral, and Legal Considerations.

9. CSR and Ethics • Harassment – refers to those behaviours that are found to be threatening or disturbing, and these behaviours are not acceptable in society. • Accessibility Issues – employers have a duty to accommodate an employee, regardless of ability or disability. (Canadian Human Rights Act) • Environmental Responsibility • -Environmental Protection Act • -Kyoto Protocol • -Business and the Environment

10. CSR and Ethics • Labour Practices • In Ontario, the Employment Standards Act sets out certain mandatory minimum conditions of employment. • -Pay Equity • -Privacy Laws

11. Fair Trade • Fair trade is the practice of helping producers in developing countries bypass expensive middlemen so they can sell their goods in other countries for a fair profit. • Grassroots movement is one that develops from the up, not the top down. • TransFair Canada is one non-profit organization that assures consumers that the goods are certified and that the purchases are benefiting the producers and workers.