Ethics Is More Than Legality

Ethics is more than legality

Ethics

* Standards of moral behavior; behavior that is accepted by society as right versus wrong.

Ethics begins wit each of us

* It is helpful to ask yourself the following questions when facing an ethical dilemma.

o It is legal?

o It is balanced? Am I acting fairly? Would I want to be treated this way?

o How will it make me feel about myself? Would I feel proud if my family learned of my decision? My friends?

Managing Businesses Ethically and Responsibly

* People learn their standards and values from observing what others do, not from hearing what they say.

* A business should be managed ethically for many reasons:

o to maintain a good reputation

o to keep existing customers

o to attract new customers

o to avoid lawsuits

o to reduce employee turnover

o to avoid government intervention

o to please customers, employees, and society

o simply to do the right thing

* Ethic of justice is based on principles like justice, fairness, equality, or authority.

* Ethic of care is based on a sense of responsibility to reduce actual harm or suffering.

Setting Corporate Ethical Standards

Compliance-based ethic codes

* Ethical standards that emphasize preventing unlawful behavior by increasing control and by penalizing wrongdoers.

Integrity-based ethic codes

* Ethical standards that define the organization's guiding values, create an environment that supports ethically sound behavior, and stress a shared accountability among employees.

Whistleblowers

* People who report illegal or unethical behavior.

* The following six-step process can help to improve business ethics:

o Top management must adopt and support an explicit corporate code of conduct

o Employees must understand that ethical behavior begins at the top, and that they are expected to act accordingly

o Managers and others must be trained to consider ethical implications of all business decisions

o Ethics office must be set up (also telephone lines), so that whistleblower can stay anonymous.

o Outsiders of the company must be told about the ethic programs and values of the company. Clear statement of ethical standards.

o The ethic code must be enforced  best way to communicate with employees who take the code serious.

Strategies for Ethics Management

* Integrity-based ethics codes move beyond legal compliance to create a "do-it-right" climate that emphasizes core values such as honesty, fair play, good service to customers, a commitment to diversity, and involvement in the community. These values are ethically desirable, but not necessarily legally mandatory.

Corporate Social Responsibility

Corporate Social Responsibility

* A business's concern for the welfare of society

* The social performance of a company has several dimensions

Corporate Philanthropy

* Dimension of social responsibility that includes charitable donations.

* Strategic philanthropy involves companies making long-term commitments to the society.

Corporate Responsibility

* Dimension of social responsibility that includes everything from hiring minority workers to making safe products.

Corporate Policy

* Dimension of social responsibility that refers to the position a firm takes on social and political issues.

Responsibility to Customers

* three out of five businesses fail - perhaps because their owners failed to please their customers

Responsibility to Investors

* Some people believe that before you can do good you must do well; others believe that by doing good, you can also do well

* Some people have chosen the unethical way to improve their financial health: Insider Trading

Insider Trading

* An unethical activity in which insiders use private company information to further their own fortunes or those of their family and friends.

Responsibility to employees

Responsibility to Society and Environment

Social Auditing

Social Audit

* A systematic evaluation of an organization's progress toward implementing programs that are socially responsible and responsive.

* Socially Responsible Business Activities:

o Community-related activities

o Employee related activities

o Political Activities

o Support for higher education, the arts, and other NPOs

o Consumer activities

* In addition to