Demanding Ethical and Socially Responsible Behavior PDF

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Defining ethics as well as relevance to business environment....

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Luxiang Duan BMGT110F Professor Gardner 10 September 2018 Demanding Ethical and Socially Responsible Behavior Ethics is More Than Legality ● how do we restore trust in the free market system? ○ punish those who have broken the law ○ make accounting records more transparent ○ consider what is ethical, not just legal ● ethical standards are fundamental ○ ethics: standards of moral behavior ■ behavior accepted by society as right versus wrong Ethics Start at the Top ● managers can help instill corporate values in employees ● trust between workers and managers must be based on fairness, honesty, openness and moral integrity ● over ambitious goals and incentives can create an environment in which unethical actions can occur Setting Corporate Ethical Standards ● increasing number of companies adopting written codes of ethics ○ compliance-based ethics code ■ emphasize preventing unlawful behavior by increasing control and by penalizing wrongdoers ○ integrity-based ethics code ■ define organization guiding values, create an environment that supports ethically sound behavior and stress a shared accountability among employees How to Improve US Business Ethics

● top management must adopt and unconditionally support an explicit corporate code of conduct ● expect all employees to act ethically ● involve outsiders such as suppliers, subcontractors, distributors and customers ● ethics code must be enforced ● ethics office must be set up with which employees can communicate anonymously ○ whistleblowers: insiders who report illegal or unethical behavior Corporate Social Responsibility ● business’ concern for the welfare of society ● based on commitment to integrity, fairness, and respect ● argues that businesses owe their existence to the societies they serve and cannot exist in societies that fail ● corporate philanthropy: includes charitable donations ● corporate social initiatives: enhanced forms of corp philanthropy directly related to the company’s competencies ● corporate responsibility: hiring minority workers to making safe products ● corporate policy: position a firm takes on social and political issues Positive Impacts of Companies ● more companies encouraging employees to volunteer while on company time ● majority of MBA students report they would take lower salary to work for socially responsible company Responsibility to Customers ● President Kennedy: ○ right to safety ○ right to be informed ○ right to choose ○ right to be heard ● how do customers know about companies’ social efforts? ○ primary use of social media

Responsibility to Investors ● insider trading: when insiders use private company information to further their own fortunes or those of their family and friends ● unethical behavior does financial damage to a company and investors are cheated Responsibility to Employees ● create jobs and provide chance for upward mobility ● treat employees w respect ● offer salaries and benefits that help employees reach their personal goals Responsibility to Society and Environment ● companies minimizing carbon  footprint ○ amount of carbon released during item’s production, distribution, consumption, and disposal ○ increasing costs but can offer good opportunities Social Auditing ● social audit: systematic evaluation of organization’s progress toward implementing socially responsible and responsive programs ● five types of watchdogs ○ socially conscious investors ○ socially conscious research organizations ○ environmentalists ○ union officials ○ customers International Ethics and Social Responsibility ● wanting socially responsible behavior from their international suppliers ● foreign corrupt practices act: criminalized act of paying foreign businesses or government leaders in order to get business...