...chapter 9 Ethics and Corporate Social Responsibility ETHICS * Ethics concerns principles of right or wrong conduct * The moral principles and values that govern the behaviour of people, firms or Govt. regarding what is right and what is wrong * Being truthful * Demonstrating integrity of character * Not cheating customers * Not harming people and trading with decency BUSINESS ETHICS * Involves the application of general ethical principles to the actions and decisions of businesses and the conduct of their personnel * Are not materially different from ethical principles in general because business actions have to be judged in the context of society’s standards of right and wrong * Ethic behaviour in business requires adhering to generally accepted norms Why study ethics in business? * Ethical behaviour is simply the right thing to do. It is often prescribed within law and regulations * Ethical behaviour is demanded by customers, govt. and the news media. Unethical firms risk attracting unwanted attention * Ethical behaviour is good business, leading to enhanced corporate image and selling prospect. Firms with strong reputations have an advantage when hiring and motivating employees, partnering and dealing with foreign governments. * Related issues * Bribery (over US$1 trillion in bribes is paid around the world) * Kickbacks; illicit payment made to someone in return for facilitating a transaction or appointment...
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...Why Managers should behave ethically Upon studying the subject at hand, the first question should be what are ethics? Ethics are the inner guiding moral principles, values, and beliefs that people use to analyze or interpret a situation and then decide what the appropriate way to behave. There is a close relationship between social issues and ethically responsible management practices. Since management is always involved in dealing with people, it is a part of social and work life of the manager. Ethically responsible management takes into consideration all social issues in human relations. Workers want to see any action taken by managers is an ethically correct action to consider the management ethically right. Doing things right is when the deed is in line with the interest of the company. The first step in positively influencing employee’s behavior must first come from management. Therefore an ethical program should be implemented and consist of a well-designed code of ethics. This should inspire and promote ethical values, and not just consist of a set of constraints, rules and violations. Instead focus on all stakeholders who are affected by the company’s objective (employees’, customers, supplies, shareholders and the community it shares). A provision of guidance for employees and a system for obtaining advice and speaking up on ethical issues. Allows the employee’s to feel involved in process of creating an environment of accountability. Ethical behavior increases...
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...Introduction For this paper I will be discussing Business Ethics and Corporate Social Responsibility (CSR) using Anglo-American and Primark case studies as examples. First, I will discuss what is meant by ethical business behavior. Second, I will discuss how Anglo-American and Primark apply ethics into their business practices. Third, I will discuss what the costs and benefits are to an organization when they behave ethically. Finally, I will choose one component from Svennson & Woods’ model from “A Model of Business Ethics”, and discuss how it is relevant for Anglo-American. Ethical Business Behavior Ethical business behavior refers to an organizations actions and policies that are synergetic with "doing the right thing" (Sethi, 2003). Similar to the inherent laws of society that man has established that promote specific behaviors and actions that are deemed appropriate to build trust and relationships that last, it is similar in corporations. In order to operate ethically, organizations must also establish a clearly defined set of principles and a culture of ethical compliance that builds trust and confidence with their employees and their customers (Paine, 1994). Ethical business behavior is a combination of values and normative ethics, which drive an organization. Additionally, ethical business behavior is expected by society as a whole. Svennson & Woods write, “Society does have expectations of business and of its business leaders” (Svennson & Woods, 2008)...
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...What is business ethics? There are many different definitions of business ethics. In general, the term is used to mean a form of applied ethics in which a system of ethics and morality is applied in the business world. The exact application of business ethics will differ from organization to organization, and place to place. Different organizations deal with different stakeholders, different clients and customers, and different dimensions of the work world, industry, and market. The way business ethics must be applied is determined by the nature, mission, purpose and goals of a given company. The universal purpose of business ethics is to ensure that companies treat their workers, partners, clients, and any other involved shareholders or stakeholders with ethical and moral integrity. Business ethics used to be taken for granted and assumed, almost as an extension of the personal ethics of those involved in the business. In more recent years, however, following different issues including the 2001 Enron scandal, individuals and businesses have focused more on analyzing and formalizing business ethics (cf WiseGeek, retrieved 2010). A Model Organization: Integral business ethics in terms of social issues, legal issues, and profit. Taking a fictitious restaurant food supply organization called The Ultimate Deal, as an organization that serves as a model of business ethics, the practical implications of business ethics can be explained. The Ultimate Deal, as a restaurant...
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...Ethical Issues in Management Jaceson Bradford MGT 216 May 3, 2010 Bill Link Introduction In today’s workplace it is important to understand how making an accurate hiring decision can affect the organization. With jobs becoming increasingly difficult to arrive at because of the economy, applicants for employment are willing to misrepresent their credentials in the application process. Managers are faced with ethical and legal aspects of hiring along with social issues that make ethically responsible management practices increasingly important. This paper will provide information about ethical and legal aspects associated with hiring and provide moral and ethical issues faced by managers. This paper will also describe the relationship between social issues and ethically responsible practices that relate to hiring. Moral and Ethical Issues Many people don’t understand the cost related to making a poor hiring decision. From productivity, customer service, and liability prospective have been widely studied and has been estimated to be three times the annual salary of the individual involved (Calvasina, Calvasina, & Calvasina 2008). Therefore, it is important for managers to make their decisions of an applicant based on skills as well as moral and ethical values. It is very difficult at times for managers because their responsibilities include not only hiring, but also promotion, conduct of employees, and motivation. But it is even more important...
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...1980’s, where by the end of the decade the traditional markets for credit cards had become saturated. The middle and working classes already had their plastic of choice and it was time for credit card companies to start looking for alternative ways to bring in revenue. Their solution was simple; in 1990 there were nearly 14 million undergraduate students enrolled in colleges across America. That number was projected to grow as we neared the turn of the century, and it would naturally replenish itself with new students every year. This “new to credit” market was virtually untapped and would provide card issuers with a huge opportunity for growth in both short and long-term areas. If the company could hook college students on their specific brand of credit card, i.e. Visa, MasterCard, American Express, etc., they hoped to secure them as life long, brand-loyal customers. The big companies used very aggressive tactics to secure college students as card users. These companies would go to the universities and strike a licensing agreement, so the card companies could use the college logos on their cards. They never ran a credit check, or even asked how the student would be able to pay off their expenses. They manipulated the students into signing up for credit cards by offering free t-shirts and mugs with the college logo on them. However, not all banks were operating this way. The Louisiana Purchase Bank, LPB, had its card services division stay away from the party atmosphere on campuses...
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...d.). Advantages & Disadvantages of Business Ethics. The Houston Chronicle . The Economist. (2011). Milton Friedman goes on tour. The Economist . Zeiger, S. Effects of Lack of Ethics on a Business Environment. Houston: The Houston Chronicle. Introduction Business ethics is the general application of ethical behavior and conduct towards the way a business conducts itself. Business ethics do not involve a specific set of standards but rather are general ethics applied to business conduct. Often, they can determine what strategy and decisions a company will make and what the conduct of the company’s employees will be. There is a concept called ethical universalism, which states that what is right and wrong is universal regardless of society, culture, and religion (Hill). If this is true it would mean that all businesses can be held to the same standard of ethics regardless of what country that operate in and what business they are conducting. What is the value of...
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...go at lengths to gain a leg on competition. I noticed three ways in particular we may see this: patent infringement, bribes, and kickbacks. By these three we can see that there is an ethical issue in business, because businesses are willing to do what is not ethically right to gain an advantage. To begin with let us dive into patents. As explained in the text of book for class, patents can provide powerful protection on new products, processes and inventions (Bagley and Dauchy, 542). It is not so much the benefits that can come from having a patent but the weaknesses that can occur. Some weaknesses listed in the book include: “High standards of patentability; often expensive and time-consuming to pursue; must disclose invention to public” (Bagley and Dauchy, 572). It is that last weakness that can be an issue with dealing with patents. In the articles that I have had the opportunity to study; some of the articles included patent disputes. Often it is telling of one company having to pay another for patent infringements. For example, Google could have to pay up to $1 Billion to Vringo Inc. a small patent and technology company (Rubin). Another article explains how Apple and Samsung are attempting to settle outside of court dealing with patent infringements by Samsung (Wakabayashi and...
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...Ethical Objectives The way the business responds to such issues is depend on their ethics Definition of ethics – individual’s moral beliefs and values about what is right and what is wrong, good or bad that guide his behavior. It is code of behavior that is acceptable to a person/organization to follow in a given society. It is a value judgment that may differ in importance and meaning between different individual. Ethics are based on individual beliefs and social standards; vary from person to person, from situation to situation and from culture to culture. Social standards of individual influence by; - The behavior af parents and other adults - Influenced by peers - Experience shapes our lives and contributed to aur ethical beliefs and our behavior How employees (managers) make a decisions is depends on their moral and belief. Business ethics is a term used to refer to ethical and unethical behaviors by employee of commercial organizations. Ethical behavior – behavior which is conforming to generally accepted social norms concerning beneficial and harmful actions. Ethical objectives – are targets based on a moral code(ethical code) for the business, for example ‘doing the right thing’. The growing acceptance of corporate social responsibility has led to businesses adopting an ‘ethical code’ to influence the way in which decisions are taken. Ethical code – a document detailing a company’s rules and guidelines on staff behavior that must be followed by all employees...
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...people in working organizations (encyclopedia Britannica Para 1).” Human resources job is to gather people whom posses a certain skill set in order to perform certain job functions required for the company. This process is done by recruiting and selecting desired candidates after the selection process has been conducted human resources is also required to train, evaluate, reward and promote qualified candidates. Securing, maintaining, and utilizing an effective work force, which organizations cannot survive without is what human resource management focuses on. By keeping in connection with the organization’s objectives and business strategies makes human resource a key to the success of a company. Maintaining a healthy work environment between company policies and individuals is another role of human resource. There are basic functions all managers perform which are planning, organizing, staffing, leading, and controlling. These represent what is often called the management process. Staffing, personnel management, or human resource management is the function for the organization to focus on today's workforce environment. It includes activities like recruiting, selecting, training, compensating, appraising, and developing. The role of Human Resources is continuing to change. Through out the years human resources have had to adapt to the changes throughout the world. From diversity changes to social and religious changes, even adapting to the changing technology...
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...ad ‘Advertising can be defined as any paid form of non personal presentation and promotion of ideas, goods or services through mass media such as newspapers, magazines, television or radio by an identified sponsor’. (Philip Kotler, et al., Principles of Marketing, 2002). So basically advertising is a mass communications device through which companies promote or market their product to the consumer, and this enables them to make informed consumption decisions. Advertising plays an important part in our everyday lives as it enables us to choose between different ranges of products. These products are promoted through different types of advertisements and cater to all types of markets. Dedicated advertising companies exist with enormous budgets running into millions of pounds which make advertisements for their clients. Advertising also plays an important role for the capitalist economies. ‘Advertising enables producers to expand their markets and therefore take advantage of economies of scale to reduce unit production costs’. (Chris Hackley, 2005, Advertising and Promotion). Through the use of advertising producers are able to sell large stocks of goods that they produce and create demand for new products and offers. Advertising benefits consumers since they enjoy lower prices and a better product quality, since the competition that advertising creates acts in the interests of the consumers. • Advertising has played a major role in consumer marketing, and has enabled companies...
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...The Ultimate Deal: A Code of Ethics The Ultimate Deal has a formal code of ethics that expresses the expectations and application of business ethics toward all stakeholders. The topics include legal ethics – the need to act honestly and ethically faced to legal matters including regulations, inspections, taxes, etc.; ethics in dealings toward investors, keeping them informed and involved; ethics toward customers, ensuring responsibility, reliability and coherence, providing what has been committed to; ethics toward the press in terms of advertising and press releases; ethics toward employees including rights and duties and ethics toward the executive officers, both in terms of how they should be treated and what their duties are. The code of ethics is distributed to all shareholders. Each category of shareholder (executive, employee, investor, customer…) receives a verbal explanation of the ethics that apply to them, and have the opportunity to voice any concerns or questions. Ethics applied to customers are also posted in the appropriate customer service and sales areas for public viewing. Decisions, in terms of whether or not to proceed with an initiative or project are made based on the code of ethics. Rewards are also determined based on ethics: financial raises, and awards such as employee of the month/year take the code of ethics into consideration as a major determining factor. The code is reviewed in employee evaluations and in the weekly managerial meetings...
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...Running head: HOW PERSONAL CAN ETHICS BE 1 BUS520 Organizational Leadership October 20, 2011 HOW PERSONAL CAN ETHICS BE 2 Abstract Business ethics in an organization have become extremely relevant in today’s business society. Graduate schools teach business ethics to prepare leaders and managers to be more responsible. Although ethical issues often arise out of business relationships many companies strive to implement a code of ethics that eliminates room for doubt and place emphasis on the expectations for the company’s culture. HOW PERSONAL CAN ETHICS BE 3 Discuss how personal differences and preferences can impact organizational ethics. A profound quote that is used by so many is “to thine own self be true,” though this is easily spoken it is not easily able to be done. Being true as defined by moral principles involve character, integrity and self-awareness, this is one reason why many organizations develop core values and policies as their foundation. Hellriegel and Slocum (p. 10, 2011) define ethics as the values and principles that distinguish right from wrong. Personal differences and preferences are based from one’s experience and frame of reference that is developed from birth and linger long into our lives as adults. It is who we are and it’s symbolic of a woven masterpiece handed down from many generations. This impact on organizational ethics can be positive and allow the company’s culture to embrace diversity...
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...have this in place and caused a big issue at one of their plant. This company did not listen to their employees and was only worried about the profits that then what was happening around them. They could have just fixed the problems and still could have been profitable, but would just not have made as much money. Because they did not listen to their employee’s part, one of the plants exploded and caused major property damage and employees to get hurt. This is why the code of ethics had to be put in place to prevent this from happening again. This company is not going to let what happened 20 years ago happen again. The Ethics Code of Global Oil Company is built around 10 key concepts that demonstrate the companies’ dedication to doing business ethically. 1. Building Reliability and Trust with Employees, Customers, and Shareholders – Building Reliability and Trust is integral to ensuring that our employees know they can rely on each and trust in their fellow employees, ensure that customers view our products as a flagship of reliability, and trust that we will treat them fairly in all business dealings, and ensure that the shareholders know how we treat our employees and customers. 2. Developing and maintaining a Culture of Honesty and Integrity – This helps to ensure that in all of our dealings, we will operate honestly, and if there is impropriety at any level and of any kind, it will be reported. 3. Ensuring Open Communication at all Levels of the...
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...A business that behaves ethically induces other business associates to behave ethically as well. If a company (or a manager) exercises particular care in meeting all responsibilities to employees, customers and suppliers it usually is awarded with a high degree of loyalty, honesty, quality and productivity. For examples, employees who are treated ethically will more likely behave ethically themselves in dealing with customers and business associates. A supplier who refuses to exploit its advantage during a seller's market retains the loyalty and continued business of its customers when conditions change to those of a buyer's market. The Massey Energy Upper Branch Mine Disaster in West Virginia operated by the Performance Coal Company had repeated problems with methane buildups. Since April 2009, federal regulators have cited the mine eight times for “substantial” violations relating to the mine’s methane control plans. In two instances, the regulators found the mine operator was calibrating methane monitors every three months even though it is supposed to be done every 31 days. The delays in attending to the monitors meant they could not properly detect the gas; a risk inspectors said could lead to severe injuries or prove fatal. On April 30, 2009, federal regulators found that the mine had failed to follow methane-related safety precautions. Regulators stopped work in a section of the mine until the ventilation was corrected. It appears that many people (including the...
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