Business Ethics and Social Responsibility. Ethics. Ethics Standards or rules of conduct that help us distinguish between right and wrong. Can help individuals decide on the best course of action in situations where they aren’t sure what to do.
Business Code of Ethics
Google’s Code of Conduct
Johnson and Johnson – Our Credo
Johnson and Johnson’s Ethical Code for the Conduct of Pharmaceutical Medicine
Ethical Standards for the Teaching Profession
Ward, Susan. “Mission Statement”. About.com: Small Business Canada, October 2009, [Online]. Available:http://sbinfocanada.about.com/od/businessplanning/g/missionstatemen.htm
“Canadian Tire is a growing network of interrelated businesses... Canadian Tire continuously strives to meet the needs of its customers for total value by offering a unique package of location, price, service and assortment.”
Within the next five years, ZZZ Tours will become the premier eco-tour company in the world, increasing revenues to 3 million dollars in 2013 by becoming internationally known for the comfort and excitement of the whale-watching tours it offers.
Code of Ethics won’t necessarily address every possible situation.
Morals and Values
Profitability and Competitiveness
When the Code of Ethics is not clear or does not exist, consider the following questions:
If I take this action:
The crime of lying or pretending
The Competition Act 2002 bans these type of deceptive business practices:
1. False or misleading advertising
2. Advertising merchandise for a bargain price, but not having a reasonable quantity available for sale (bait and switch selling)
3. Placing two different price tags on a product and selling it to the consumer at the higher price (double ticketing)
Pyramid Scheme Fraud
Stock Market Fraud
Some Accounting Background…
Three formal statements that report financial information of a company are a company’s:
1. Balance Sheet
2. Income Statement or Statement of Operations
3. Cash Flow Statement
These statements will be found in corporations’ annual reports also called, shareholder’s reports.
Assets – Items that a business owns
- (building, land, equipment, supplies, cash, money owed by customers called receivables.)
Liabilities – Debts/money owed by the business to other businesses including banks
Equity – For a company it is called Owner’s Equity
- For a corporation it is called Shareholder’s Equity and Retained Earnings
- For an individual it is called Net Worth
ASSETS – LIABILITIES = NET WORTH
Revenues - Expenses = Net Income/Proft
R>E = Net Profit
R<E = Net Loss
Users of Financial Information
“Cooking the Books”
Case: Canadian Sponsorship Scandal
You learn from a friend who works for a corporation in which you own shares, that an accounting scandal about the company is going to hit the papers tomorrow. When the news becomes public, frightened shareholders will want to sell of their shares and consequently the price of the shares will drop.
To avoid losing money on the shares you own, you sell off your shares the day before this public announcement is made.
Case: Consider Martha Stewart
Provincial Securities Commission is the organization that regulates the Stock Market to ensure fair and legal trading.
Computers programs are used to search for abnormal patterns of the sale or purchase of stocks.
Insider trading violations are prosecuted by the Provincial Securities Commission and those convicted may face fines up to $1 miliion, be forced to turn over their profits, face jail sentences and could be banned from furture stock market trading.
The decision of an employee to inform officials or the public about a legal or ethical violation.