Demanding Ethical and Socially Responsible Behavior McGraw-Hill/Irwin Copyright

Demanding Ethical and Socially Responsible Behavior McGraw-Hill/Irwin Copyright

Demanding Ethical and Socially Responsible Behavior McGraw-Hill/Irwin Copyright 2010 by the McGraw-Hill Companies, Inc. All rights reserved. Ethics & Social Responsibility 4-2

Ethics 4-3 WHAT are ETHICS? Ethics -- The standards of moral behavior. Behaviors that are accepted by society as right versus wrong. 4-4

Ethics Doing What Is Right 4-5 Ethics As You Know It To Be Right. BASIC MORAL VALUES Right: Integrity Respect for human life

Self control Wrong: Cheating Cowardice Cruelty Honesty Courage Self-sacrifice 4-7 Ethics

Ethics Begins With Each of Us Stem From Individual More Than Legality 4-8 Ethical Dilemma a situation requiring a choice between equally undesirable alternatives. 4-11

Ethics Begins with Each of Us FACING ETHICAL DILEMMAS LG2 Ask yourself these questions: - Is it legal? - Is it balanced? - How will it make me feel about

myself? 4-12 Texas Instruments The TI Ethics Quick Test - Is the action legal? - Does it comply with our values? - If you do it, will you feel bad? - How will it look in the newspaper? - If you know it's wrong, don't do it! - If you're not sure, ask. - Keep asking until you get an

answer. For copies of the card or further information, contact the TI Ethics Office at 1-800-33-ETHIC. (This information is provided to TI employees on a business-card size mini-pamphlet to carry with them.) ETHICS CODES An increasing number of companies have adopted written codes of ethics.

4-14 ETHICS CODES Compliance-Based Ethics Code -- Emphasize preventing unlawful behavior by increasing control and by penalizing wrongdoers. Integrity-Based Ethics Code -- Define the organizations guiding values, create an environment that supports ethically sound behavior and stress a shared accountability among employees. 4-15

Trust between workers and managers must be based on fairness, honesty, openness and moral integrity. Leadership can help instill corporate values in employees. 4-16 HOW to IMPROVE AMERICAS BUSINESS ETHICS

1. Top management must adopt and unconditionally support an explicit corporate code of conduct. 2. Employees must understand that senior management expects all employees to act ethically. 3. Managers and others must be trained to consider the ethical implications of all business decisions. (continued) 4-17 HOW to IMPROVE AMERICAS BUSINESS ETHICS, cont. 4. An ethics office must be set up with which

employees can communicate anonymously. Whistleblowers -- People who report illegal or unethical behavior. 5. Involve outsiders such as suppliers, subcontractors, distributors and customers. 6. The ethics code must be enforced. 4-18 Social Responsibility

4-21 Social Responsibility Social responsibility is managements obligation to make choices and take actions that contribute to the welfare and interests of society as well as to those of the organization. CORPORATE SOCIAL RESPONSIBILITY

4-25 CORPORATE RESPONSIBILITY and POLICY Corporate Responsibility -- Includes everything from hiring minority workers to making safe products, minimizing pollution, using energy wisely, and providing a safe work environment. Corporate Policy -- The position a firm takes on social and political issues.

Corporate Philanthropy -- Includes charitable donations. 4-26 HELPING HANDS Most Generous Celebrities Who? For? George Clooney United Way;

UN Messenger of Peace Angelina Jolie & Brad Pitt Make it Right Foundation; UN Ben Affleck UN Madonna Raising Malawi

Michael J. Fox Michael J. Fox Foundation for Parkinsons Research Alicia Keys Keep a Child Alive; Frum Tha Ground Up Sir Elton John

Elton John AIDS Foundation Matt Damon GreenDimes; H2O Africa; Running the Sahara Oprah Winfrey Angel Network Source: Parade Magazine,, July 8, 2010. 4-28

GENEROUS GUYS Worlds Biggest Givers Who? How Much? What For? Bill Gates $28B

Malaria, public health, education Warren Buffett $8.3B Gates Foundation George Soros $8B Human rights, democracy

Gordon Moore $6.8B Environment Carlos Slim $4B Education, healthcare

Eli Broad $2.6B Education, arts Azim Premji $2.1B Education James Stowers

$2B Genetic research Michael Bloomberg $1.8B Antismoking, transportation Li Ka-Shing

$1.6B Education, healthcare Source: Forbes, June 6, 2011. 4-29 RESPONSIBILITY to CONSUMERS 4-31 PRESIDENT KENNEDYS BASIC RIGHTS of CONSUMERS

The Right to Safety The Right to be Informed The Right to Choose The Right to be Heard 4-32 Responsibilities to Customers The Right to Be Safe. Safe operation of products, avoiding product liability. The Right to Be Informed. Avoiding false or misleading advertising and providing

effective customer service. The Right to Choose. Ability of consumers to choose the products and services they want. The Right to Be Heard. Ability of consumers to express legitimate complaints to the appropriate parties.


Insider Trading -- Insiders using 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. 4-37 RESPONSIBILITY to EMPLOYEES

4-38 RESPONSIBILITY to EMPLOYEES Create jobs and provide a chance for upward mobility. Treat employees with respect. Offer salaries and benefits that help employees reach their personal goals. 4-39

AMERICAS MOST ADMIRED COMPANIES 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

Apple Google Berkshire Hathaway Southwest Airlines Procter & Gamble Coca-Cola Amazon FedEx Microsoft McDonalds Source: Fortune,, March 21, 2011. 4-40

RESPONSIBILITY to the ENVIRONMENT 4-42 RESPONSIBILITY to the ENVIRONMENT Environmental efforts may increase costs but can offer good opportunities. The emerging renewable-energy and energyefficiency industries account for 8.5 million U.S. jobs. By 2030, as many as 40

million Green jobs will be created. 4-44 SOCIAL AUDITING Social Audit -- A systematic evaluation of an organizations progress toward implementing socially responsible and responsive programs. Five Types of Social Audit Watchdogs 1) 2) 3)

4) 5) Socially conscious investors Socially conscious research organizations Environmentalists Union officials Customers 4-47 INTERNATIONAL ETHICS Many businesses want socially responsible behavior from their international suppliers.

In the 1970s, the Foreign Corrupt Practices Act criminalized the act of paying foreign businesses or government leaders in order to get business. Partners in the Organization of American States signed the Inter-American Convention Against Corruption. 4-48 Social Responsibility Bottom Line: Should Companies Have?

4-49 The Majority View Companies are citizens in the communities in which they reside, therefore, They do have a Social Responsibility 4-50 An Economists View Milton Friedman Argues that firms need to focus on making a

profit, not on social responsibility Claims that firms that focus on social responsibility get distracted from their real purpose 4-51 Social Responsibility To Sum It Up: Doing Good vs. Doing Well 4-52

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