Pamela S. Evers, Reindance Productions, LLC 2009
Chapter 4
Business Ethics &
Social Reponsibility
Pamela S. Evers, Reindance Productions, LLC 2009
Lawyers’ houses are built
on the heads of fools.
Anonymous
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Business Ethics and Social Responsibility: Understanding Ethical Standards and Dilemmas, Slides of Law
The concept of business ethics and social responsibility through various perspectives, including the views of milton friedman and dayton hudson, the definition of ethics, ethical standards, and different ethical theories. It also discusses ethical reasoning, ethical dilemmas, and methods for resolving them.
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Pamela S. Evers, Reindance Productions, LLC 2009
Chapter 4
Business Ethics &
Social Reponsibility
Pamela S. Evers, Reindance Productions, LLC 2009
Lawyers’ houses are built on the heads of fools. Anonymous
Pamela S. Evers, Reindance Productions, LLC 2009
Compare Views
“The one and only social responsibility of
business is to increase its profits.” Milton Friedman (b. 1912), Nobel Laureate in Economics
“The business of business is serving
society, not just making money.” Dayton Hudson Corporate Constitution
Pamela S. Evers, Reindance Productions, LLC 2009
What are Ethical Standards?
- Positivist view asserts that moral standards are codified, or stated, in positive law - Thus, if an act is legal, the act must be ethical
- Natural law theory asserts that moral standards are universal and cannot be changed or modified by law - Thus, these standards should be followed even if the standards are greater than the law requires
Pamela S. Evers, Reindance Productions, LLC 2009
- Divine Command: Do what the Bible tell you
- Ethics of Conscience : Follow your conscience
- Ethical Egoism : First do what’s best for yourself
- Ayn Rand – “The Ethics of Selfishness”
- Duty Ethics : Do the right thing
- Immanuel Kant’s categorical imperative
- Ethics of Respect : Show respect (don’t dis’ me)
- Ethics of Rights : Everyone has inalienable rights
- Utilitarianism : Do what is best for the most
- Ethics of Justice : Do what is fair
- Virtue Ethics : Be a good person
Pamela S. Evers, Reindance Productions, LLC 2009
Ethical reasoning
- Utilitarianism (Bentham & Mill) holds that all decisions should be evaluated to the utility they create – the good of the many over the good of the one or the few; a cost/benefit analysis
- Duty-based Ethics (Kant’s categorical imperative) holds that one should not act unless you would be willing for all others to act similarly
Pamela S. Evers, Reindance Productions, LLC (^2004) docsity.com
Pamela S. Evers, Reindance Productions, LLC 2009
Ethical reasoning
- Situational ethics or moral relativism examines the circumstances of an act to determine whether the act was, or was not, ethical
- The business stakeholder standard of behavior determines whether an act is, or is not, ethical by examining the interests of various stakeholders with regard to a particular business action
Pamela S. Evers, Reindance Productions, LLC (^2004) docsity.com
Pamela S. Evers, Reindance Productions, LLC 2009
“Easier” Methods of Resolving
Ethical Dilemmas
- Laura Nash Model:
- Have you defined the problem accurately?
- How would you define the problem if you stood on the other side of the fence?
- How did this situation occur in the first place?
- What is your intention in making this decision?
- How does the intention compare with probable results?
Pamela S. Evers, Reindance Productions, LLC 2009
- Laura Nash Model (cont):
- Can you discuss your decision with the affected parties?
- Are you confident that your position will be as valid over a long period of time as it seems now?
- Could you discuss your decision with your supervisor, coworkers, officers, board, friends, and family?
- Whom could your decision or action injure?
Pamela S. Evers, Reindance Productions, LLC 2009
Think About These Situations
And The Related Ethical Issues
- Discrimination
- Stealing: food, a car
- Disposing of hazardous waste
- Writing a new employee policy
- Expanding or closing your business
- Dealing with an aggressive competitor
- Firing an employee
Pamela S. Evers, Reindance Productions, LLC 2009
Responsibility to
Employees & Shareholders
- Apply various models for ethical decision-making to a company’s employment decisions - Safety requirements (Johnson Controls excluded women from manufacturing line at battery plant) - Executive compensation compared to hourly compensation - Plant closings - Outsourcing - Whistleblowers Whistleblowers Cooper, Rowley, and Watkins
Pamela S. Evers, Reindance Productions, LLC 2009
Responsibility Overseas
- Apply various models for ethical decision-making to a company’s international operations - Union Carbide and the Bhopal disaster that Dow Chemical (successor corporation) continues - Texaco’s environmental disaster in Ecuador - Apparel manufacturers and child labor issues
Texaco’s oil impacts Ecuadoran child; Aguinda v Texaco
Pamela S. Evers, Reindance Productions, LLC 2009
Business Ethics is Important
- Trust -- business activity is based upon trust whether between employer and employee, company and consumer, supplier and manufacturer, government and business
- Reputation -- a good reputation is a valuable commodity (e.g., goodwill)
- Law – unethical business activity ultimately, at least in theory, is limited by government, consumers, and other stakeholders who use the courts and legislation to limit unethical behavior
Pamela S. Evers, Reindance Productions, LLC 2009
Ethical Corporations
Pamela S. Evers, Reindance Productions, LLC 2004
Green Mountain Coffee Roasters Advanced Micro Devices NIKE Motorola Intel International Business Machines Agilent Technologies Timberland Company Starbucks General Mills Pitney Bowes Applied Materials Texas Instruments Patagonia
IKEA Trader Joe’s AFLAC Eaton Corp. Stonyfield Farms Salesforce.com
Pamela S. Evers, Reindance Productions, LLC 2009
The bar chart shows the percentage of British citizens that engaged in the activity. About 15% of British citizens are “activists,” doing 5 or more activities within a year.