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INTRODUCTION TO BUSINESS
Citation preview
Conducting Business Ethically and Responsibly
http://www.slideshare.net/Subjectmaterial
Chapter 4
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
3
Marks Distribution
50 Terminal Examination20 Mid Term Examination15 Quizzes15 Final Assignment
ETHICS IN THE WORKPLACE Assessing ethical behavior Company practices and Business Ethics
SOCIAL RESPONSIBILITY The Stakeholder Model of Responsibility
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
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
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
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
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";
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
Classifying Business Decisions
Ethical
Unethical
Illegal
Legal
Unethical and Illegal
Ethical and Legal
Unethical but Legal
Ethical but
Illegal
11
ETHICS
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.
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
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
Fostering Ethical Behavior
Leadership Codes of Conduct
Compliance-based Integrity-Based
Social Audits Whistle Blowing
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
Business Mission Statement
Why? What? How?
18
Telenor Pakistan
19
Proctor & Gamble
20
Uni-lever Pakistan
SOCIAL RESPONSIBILITY
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.
23
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
24
RESPONSIBILITY TO EMPLOYEES: CREATING JOBS THAT WORK
A. Meet Legal StandardsB. Workplace SafetyC. Minimum Wage/Overtime
RequirementsD. Value EmployeesE. Provide Work/Life Balance
25
RESPONSIBILITY TO CUSTOMERS
CONSUMERISM:
• The Right to Be Safe
• The Right to Be Informed
• The Right to Choose
• The Right to be Heard
26
ROTTEN APPLE?
Planned Obsolescence – Deliberately designing products
to fail in order to shorten the time between consumer
repurchases
APPLE COMPUTERS:
• iPods had irreplaceable battery.
• Batteries died after 18 months.
• Customers were encouraged to purchase new iPods
• Two customers posted high profile protest movies online.
• APPLE announced replacement program.
RESPONSIBILITY TO INVESTORS
A. Legal RequirementsB. Responsible use of
Corporate DollarsA. Honesty
C. Is Optimism or Pessimism Socially Responsible?
FAIR STEWARDSHIP AND FULL DISCLOSURE
28
RESPONSIBILITY TO COMMUNITY
Corporate Philanthropy - business donations to
nonprofit groups, including both money and time.
Corporate Responsibility
The actions of the business rather than
donations of money and time.
Cause-related Marketing – partnerships between businesses
and nonprofit organizations, designed to spike sales for the
company and raise money for the nonprofit.
29
RESPONSIBILITY TO ENVIRONMENT
Green Marketing – marketing environmental products and practices
to gain a competitive edge.
30
RESPONSIBILITY TO ENVIRONMENT
A. Responsibility to environment is a part of responsibility to community
B. Reducing the amount of trash is more important than recycling
C. Although consumers support green marketing, they may not be willing to sacrifice quality
Implementing Social Responsibility (SR) Programs
• Arguments Against SR– The cost of SR threatens profits.– Business has too much control over which SR
issues would be addressed and how SR issues would be addressed.
– Business lacks expertise in SR matters.
• Arguments for SR– SR should take priority over profits.– Corporations as citizens should help others.– Corporations have the resources to help.– Corporations should solve problems they create.
Approaches to Social Responsibility
Obstructionist stance: A company does as little as possible for SR and may
involve attempts to deny or cover up violations Defensive Stance:
A company meets only minimum legal requirements in its commitments to groups and individuals for SR
Accommodative stance A company, if specially asked to do so, exceeds legal
minimums to groups and individuals in its social environment
Proactive stance A company actively seeks opportunities to contribute to
the well-being of groups and individuals in its social responsibility
FIGURE 2.4: Spectrum of Approaches to Corporate Social Responsibility
Managing Social Responsibility Programs
1. Social responsibility must start at the top and be considered as a factor in strategic planning.
2. A committee of top managers must develop a plan detailing the level of management support.
3. One executive must be put in charge of the firm’s agenda.
4. The organization must conduct occasional social audits—systematic analyses of its success in using funds earmarked for its social responsibility goals.
Social Responsibility and the Small Business
• Large Business versus Small Business Responses to Ethical Issues
– Differences are primarily differences of scale
– More issues are questions of individual ethics
• Ethics and social responsibility are decisions faced by all managers in all organizations, regardless of rank or size
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