Social Responsibility and NGOs€¦ · Ethical Dilemma – Twist! ! You do a bit more research and find out the following:

Chapter 6: SOCIAL RESPONSIBILITY AND NGOs

Fundamentals of International Business Copyright © 2010 Thompson Educational Publishing, Inc.

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CHAPTER 6: Social Responsibility and NGOs

Take a minute

§  Write down 3 companies that have good reputations (from society’s point of view).

§  Write down 3 companies that have bad reputations (from society’s point of view).

§  Let’s discuss why.





What is Corporate Social Responsibility?

Corporate social responsibility The duty of a company’s management to work in the best interests of the society it relies on for its resources (human, material, and environmental), to advance the welfare of society, and to act as a good global citizen through its policies.

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Corporate social responsibility can take many forms, including:

§  Making charitable donations §  Treating employees ethically §  Being environmentally conscious §  Ensuring safe working environments §  Sponsoring local sports teams §  Creating and promoting diverse workplaces




Benefits of CSR §  Can be used as a

marketing tool §  Dissuades governments

from implementing regulations that could interfere with business

§  Helps companies attract and retain excellent employees

Criticisms of CSR §  Costs money, detracts

from profits §  Uses employees’ time

and energy §  Can distract customers

from problems a company creates

§  A company may act ethically in one country, but not in another




Stakeholder Analysis §  Used to determine which group’s interests are

most important when a company is faced with an ethical dilemma

§  Primary stakeholders directly affect the company and its profitability

§  Secondary stakeholders have an impact on the company, but do not directly influence its success or contribute to profitability






Business Ethics

Business ethics A set of rules or guidelines that management or individuals follow when making decisions facing their company.

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Business Ethics

The guidelines used when making decisions include:

§ Domestic and international laws § The company’s code of ethics and corporate

governance § The personal values of the individual making the

decision



Business Ethics

Decision makers can use the test of disclosure method to solve ethical dilemmas:

“How would we feel if everyone knew about the decision we made?”

If they are not concerned, they have likely made an ethical choice. If they are, they have probably not made the right decision.



Business Ethics

There are two methods of thinking about ethical issues in a global context: Ethical imperialism

A view of culture based on the idea that there are certain universal truths or values that are standard across all cultures; if something is wrong in one country, it is wrong in all countries.

Cultural relativism A view of culture based on the idea that a culture’s different values should be respected, as the ethics of one culture are not better than those of another.



Business Ethics

Ethical Imperialism Cultural Relativism

One set of values for all cultures

Values are dependent on the culture

Right and wrong are the same in all cultures

Right and wrong depend on local values

A person’s ethics are not situational

When in Rome, do as the Romans do



Ethical Dilemma Time

You have $100,000 to invest. There are three companies you can invest in:

Company A has a return of 5% Company B has a return of 10% Company C has a return of 12% Which is the obvious choice?

Ethical Dilemma – Twist!

§  You do a bit more research and find out the following: §  Company A employs workers in a 3rd world

country, providing them with decent wages and educational opportunities.

§  Company B’s manufacturing processes are polluting a river in Sri Lanka that provides the only source of drinking water for a town of 15,000.

§  Company C is a cigarette manufacturer that has recently expanded into China with a successful marketing plan targeted primarily at children.

§  Which company do you now invest in? Chapter 6: SOCIAL RESPONSIBILITY AND NGOs


Homework

§  Read p154-162 and p174 §  For p158 answer the following:

§  State how Roots is socially responsible. §  Why is it in Roots’ best interest to be socially

responsible? §  For p174 answer the following:

§  Where is coffee grown? §  What ethical issues surround coffee?



Documents

Social Responsibility and NGOs€¦ · Ethical Dilemma – Twist! ! You do a bit more research and find out the following: