business copyright 2005 prentice- hall, inc. 3-1
TRANSCRIPT
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Copyright 2005 Prentice- Hall, Inc. 3-1
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ChapteChapte
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Conducting Business Conducting Business Ethically and ResponsiblyEthically and Responsibly
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Copyright 2005 Prentice- Hall, Inc. 3-3
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ess Chapter OutlineChapter Outline
Ethics In The WorkplaceEthics In The WorkplaceSocial ResponsibilitySocial ResponsibilityAreas of Social Areas of Social
ResponsibilityResponsibilityImplementing Social Implementing Social
Responsibility ProgramsResponsibility Programs
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Copyright 2005 Prentice- Hall, Inc. 3-4
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Ethics In Ethics In The WorkplaceThe Workplace
• Beliefs in Right/Wrong & Beliefs in Right/Wrong & Good/Bad ActionsGood/Bad Actions
• Ethical- Conforms Ethical- Conforms To Social NormsTo Social Norms
• Unethical BehaviorUnethical Behavior
• Business EthicsBusiness Ethics
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Copyright 2005 Prentice- Hall, Inc. 3-5
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ess Individual EthicsIndividual Ethics
• Ambiguity/Law/Real WorldAmbiguity/Law/Real World• Sources of Individual Values & Sources of Individual Values &
CodesCodes–ParentsParents–PeersPeers–ExperienceExperience
• Personal PrioritiesPersonal Priorities– Financial GainFinancial Gain– Family/FriendsFamily/Friends
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Copyright 2005 Prentice- Hall, Inc. 3-6
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ess Business EthicsBusiness Ethics
• ManagerialManagerial
• Behavior TowardBehavior Toward–EmployeesEmployees
–OrganizationOrganization
–OthersOthers
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Copyright 2005 Prentice- Hall, Inc. 3-7
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Assessing Assessing Ethical BehaviorEthical Behavior
Smooth?Smooth?
1)1)Clear-Cut Clear-Cut
Facts? Facts?
2)2)Agreed-Agreed-Upon Upon Moral Moral Values?Values?
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Copyright 2005 Prentice- Hall, Inc. 3-8
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ess Ethical NormsEthical Norms
UtilityUtility
RightsRights
JusticeJustice
CaringCaring
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Copyright 2005 Prentice- Hall, Inc. 3-9
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Company Practices Company Practices & Business Ethics& Business Ethics
Written Codes- Written Codes- United TechnologiesUnited Technologies >About >About UTC >UTC Commitments UTC >UTC Commitments >Social Responsibility>Social Responsibility
Implement CodesImplement Codes
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Copyright 2005 Prentice- Hall, Inc. 3-10
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Model Of Ethical Model Of Ethical Judgment MakingJudgment Making
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Copyright 2005 Prentice- Hall, Inc. 3-11
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ess Core Principles/ValuesCore Principles/Values
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Copyright 2005 Prentice- Hall, Inc. 3-12
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ess Social ResponsibilitySocial Responsibility
• Business Commitments To Business Commitments To StakeholdersStakeholders
• Stakeholders Affected:Stakeholders Affected:–GroupsGroups– IndividualsIndividuals–OrganizationsOrganizations
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Copyright 2005 Prentice- Hall, Inc. 3-13
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ess StakeholdersStakeholders
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Copyright 2005 Prentice- Hall, Inc. 3-14
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Evolving Social Evolving Social ConsciousnessConsciousness
1930s – 1930s – 1940s1940s
1960s – 1960s – 1970s1970s
1980s – 1980s – 1990s1990s
2000+2000+
John D. RockefellerJohn D. Rockefeller
J. P. MorganJ. P. Morgan
Cornelius VanderbiltCornelius Vanderbilt
Vietnam WarVietnam War
Social ActivismSocial Activism
Laissez-FaireLaissez-Faire
Corporate ScandalsCorporate Scandals
Increased Gov’t Increased Gov’t ControlControl
Tighter StandardsTighter Standards
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Copyright 2005 Prentice- Hall, Inc. 3-15
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ContributionsContributionsBy Source (2003)By Source (2003)
Bequests $22Corporations
$13
Individuals $179
Foundations $26
Source: Giving USA Foundation™- AAFRC Trust for Philanthropy/Giving USA 2004
In $ BillionsIn $ Billions
Total = $241 Total = $241
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Copyright 2005 Prentice- Hall, Inc. 3-16
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Contributions By Contributions By Type Of Recipient (2003)Type Of Recipient (2003)
$7
$5
$12
$13
$21
$24
$19$21
$32
$86
Religion
Education
Health
Human Services
Unallocated
Arts/Humanities
Public Benefit
Environment/Animals
International Affairs
Foundations
Source: Giving USA Foundation™- AAFRC Trust for Philanthropy/Giving USA 2004
In $ BillionsIn $ Billions
Total = $241 Total = $241
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Copyright 2005 Prentice- Hall, Inc. 3-17
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Most Admired Most Admired Companies (2003)Companies (2003)
RankRank CompanyCompany RankRank CompanyCompany
11 Wal-MartWal-Mart 66 BerkshireBerkshireHathawayHathaway
22 General General ElectricElectric 77 Proctor & Proctor &
GambleGamble
33 MicrosoftMicrosoft 88 IBMIBM
44 Dell ComputerDell Computer 99 Coca-ColaCoca-Cola
55 Johnson & Johnson & JohnsonJohnson 1010 FedExFedEx
Source: Fortune
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Copyright 2005 Prentice- Hall, Inc. 3-18
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ess Top Donations (2003)Top Donations (2003)
DonorDonor SourceSource AmountAmount(In $ Millions)(In $ Millions)
RecipientRecipient
Joan B. Joan B. KrocKroc McDonald’sMcDonald’s $1,910.0$1,910.0
10 10 OrganizationsOrganizations
Michael & Michael & Susan DellSusan Dell Dell ComputerDell Computer $673.7$673.7
Michael & Susan Michael & Susan Dell FoundationDell Foundation
Eli & Eli & Edythe Edythe BroadBroad
AIG Retirement AIG Retirement
ServicesServices$409$409
Broad Broad Foundation & Foundation &
Broad Art Broad Art FoundationFoundation
John A. John A. JacksonJackson
Retired Oil & Retired Oil & Gas Exec.Gas Exec. $247$247
Univ. of Texas Univ. of Texas at Austinat Austin
Frank & Frank & Jane Jane
BattenBatten
Retired CEORetired CEOLandmark Landmark
CommunicationsCommunications$141.2$141.2
8 8 OrganizationsOrganizations
Source: “The 2003 Slate 60: Top Donations”, complied by the Chronicle of Philanthropy, Feb. 16, 2004.
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Copyright 2005 Prentice- Hall, Inc. 3-19
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SocialSocialResponsibility - EnvironmentResponsibility - Environment
• PollutionPollution–AirAir
–WaterWater
• Toxic WasteToxic Waste
• RecyclingRecycling
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Copyright 2005 Prentice- Hall, Inc. 3-20
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Air Pollution-Air Pollution-Then, Now, & FutureThen, Now, & Future
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Copyright 2005 Prentice- Hall, Inc. 3-21
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ess Consumer RightsConsumer Rights
• Safe ProductsSafe Products• Informed About Informed About
ProductProduct• To Be HeardTo Be Heard• Choose What To BuyChoose What To Buy• To Be EducatedTo Be Educated• Courteous ServiceCourteous Service
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Copyright 2005 Prentice- Hall, Inc. 3-22
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ess Unfair PricingUnfair Pricing
• CollusionCollusion
• GougingGouging
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Copyright 2005 Prentice- Hall, Inc. 3-23
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ess Advertising EthicsAdvertising Ethics
• Food Product LabelingFood Product Labeling
• Misleading Product Misleading Product ClaimsClaims
• DeceptiveDeceptive
• Morally ObjectionableMorally Objectionable
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Copyright 2005 Prentice- Hall, Inc. 3-24
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Employer Commitments Employer Commitments To EmployeeTo Employee
• Job SkillsJob Skills
• Respect & CompassionRespect & Compassion–NondiscriminationNondiscrimination–Equal OpportunitiesEqual Opportunities–Physically & Socially Safe Physically & Socially Safe
WorkplaceWorkplace
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Copyright 2005 Prentice- Hall, Inc. 3-25
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ess WhistleblowersWhistleblowers
• False Claims False Claims Act (1863)Act (1863)
• Qui Tam Qui Tam Provisions = Provisions = 15-30% Reward For 15-30% Reward For Government RecoveryGovernment Recovery
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Copyright 2005 Prentice- Hall, Inc. 3-26
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ResponsibilityResponsibilityTo InvestorsTo Investors
• Improper Financial Improper Financial ManagementManagement
• Check Kiting- Check 21Check Kiting- Check 21
• Insider TradingInsider Trading
• Financial Misrepresentation- Financial Misrepresentation- GAAPGAAP
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Copyright 2005 Prentice- Hall, Inc. 3-27
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Social Responsibility Social Responsibility Approaches/StancesApproaches/Stances
• ObstructionistObstructionist
• DefensiveDefensive
• AccommodativeAccommodative
• ProactiveProactive
Low LevelLow Level High High LevelLevel
ObstructioniObstructionistst
DefensiveDefensive AccommodatiAccommodativeve
ProactiveProactive
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Copyright 2005 Prentice- Hall, Inc. 3-28
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Social Responsibility Auditing Social Responsibility Auditing Success of ProgramSuccess of Program
• Starts At TopStarts At Top
• Requires Requires Management SupportManagement Support
• Single Manager In ChargeSingle Manager In Charge
• Conduct Social AuditsConduct Social Audits