CHAPTER 2. Business Ethics and Social Responsibility. Click your mouse anywhere on the screen when you are ready to advance the text within each slide. .
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CHAPTER 2 Business Ethics and Social Responsibility
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Quotes of the Day “The one and only social responsibility of business is to increase its profits.” Milton Friedman (b. 1912), Nobel laureate in economics “Thebusinessofbusinessisservingsociety, notjustmakingmoney.” DaytonHudsoncorporateconstitution
Ethics • Law and ethics may not always agree... • Sometimes it is ethical to commit an illegal act... • And some legal acts are unethical! Ethics is the study of how people ought to act.
Why Bother With Ethics? There is little evidence that ethical behavior increases profits or that unethical behavior decreases profits… so why bother? • Society as a whole benefits by encouraging economic competition; no one wants to compete with unfair competitors. • People feel better when they behave ethically. • Unethical behavior can be costly, if there is public outrage leading to a boycott.
Ethics Checklist • What are the facts? • What are the critical issues? • Who are the stakeholders? • What are the alternatives? • What are the implications of each choice? • Are the alternatives legal? • Do they “look bad?” • What are the consequences of this choice? • Does this action violate important values? • Is more than one alternative right?
Responsibility to Society • Alternatives in advertisement ethics • Ignore ethics and try to create ads that sell the most product, no matter the underlying message. • Try generally to minimize exploitation. • Include a systematic, focused review of underlying messages as part of the development process. • Refuse to create any ads that are even potentially offensive.
Organizations’ Responsibilities • To customers • Privacy issues are controversial -- can a business sell lists that include your address? Your phone number? Your sexual preference? • To employees • Employers must take reasonable measures to ensure the safety of workers. • Decisions about firing workers or cutting jobs raise ethical questions. • To shareholders • Questions are often raised about uses of a company’s profits -- distributed to shareholders, raising executives’ salaries, improving business?
Other Responsibilities (cont’d) • To -- and in -- foreign countries • Companies with operations in foreign countries are often criticized for deplorable working conditions and low wages. • Response to these criticisms is often that even low-wage jobs are better than destitution and that these jobs are the beginnings of economic growth. • Employees’ responsibility to organization • Should employees report unethical behavior among co-workers? Should promotion decisions be made based on friendships? • These questions show the difficult choices that have to be made every day in the work place.
“Ethical behavior offers significant advantages: society as a whole benefits; executives who behave ethically have happier, more fulfilled lives; and unethical behavior can destroy a company.”