Chapter 2 - Ethics and social
responsibility
Ethics – study of the right and wrong moral choices that
individuals make.
Business ethics – application of moral standards in
business situations
Ethical issues that arise in the business world
Fairness and honesty
Are two very important ethical concerns in the
workplace. They must obey the law and business
people are expected to not deceive, misrepresent or
intimidate others knowingly.
Organizational relationships
Businesspersons might be tempted to put their own
welfare above the welfare of the business. Relationships
between customers and co-workers are unethical as
well as taking credit for the work of others.
Conflict of interest
When an employee takes advantage of a situation for
his her own personal interest rather than the
employer’s interest. All bribes are unethical
Communication
Advertising from business can present ethical
questions.
FACTORS AFFECTING ETHICAL BEHAVIOR
Individual factors
1. Individual knowledge of issue
2. Personal values
3. Personal goals
Social factors
1. Cultural norms
2. Co-workers
3. Significant others
4. Use of internet
“Opportunity” affecting ethical behavior
1
, 1. Presence of opportunity (freedom employee
given)
2. Ethical code
3. Enforcement
Encouraging ethics
Governments role
1. Enforcing strict regulations
2. Law should deal with
I. Corporate responsibilities
II. Interests of workers
III. Conflicts of interest
IV. Corporate accountability
4. Sarbanes-Oxley act – provides sweeping new
legal protection for employees who report
corporate misconduct.
Trade associations role
1. Provide ethical guidelines
2. Put pressure on businesses to keep standards
high.
Individual companies role
1. Code of ethics – guide to acceptable behavior
defined by organization.
2. Whistle blowing- Informing the press or
government about unethical practices in other
organizations. Sarbanes- Oxley act of 2002
protects whistle blowers.
Social responsibility
Recognizing that business activities have an impact on
society. Helping in times of need gives businesses good
advertising and helps society.
2 views of social responsibility
Economic Model
Traditional businesses sell goods or services to make
a profit. Economic model of social responsibility
states that society will benefit the most if businesses
2
responsibility
Ethics – study of the right and wrong moral choices that
individuals make.
Business ethics – application of moral standards in
business situations
Ethical issues that arise in the business world
Fairness and honesty
Are two very important ethical concerns in the
workplace. They must obey the law and business
people are expected to not deceive, misrepresent or
intimidate others knowingly.
Organizational relationships
Businesspersons might be tempted to put their own
welfare above the welfare of the business. Relationships
between customers and co-workers are unethical as
well as taking credit for the work of others.
Conflict of interest
When an employee takes advantage of a situation for
his her own personal interest rather than the
employer’s interest. All bribes are unethical
Communication
Advertising from business can present ethical
questions.
FACTORS AFFECTING ETHICAL BEHAVIOR
Individual factors
1. Individual knowledge of issue
2. Personal values
3. Personal goals
Social factors
1. Cultural norms
2. Co-workers
3. Significant others
4. Use of internet
“Opportunity” affecting ethical behavior
1
, 1. Presence of opportunity (freedom employee
given)
2. Ethical code
3. Enforcement
Encouraging ethics
Governments role
1. Enforcing strict regulations
2. Law should deal with
I. Corporate responsibilities
II. Interests of workers
III. Conflicts of interest
IV. Corporate accountability
4. Sarbanes-Oxley act – provides sweeping new
legal protection for employees who report
corporate misconduct.
Trade associations role
1. Provide ethical guidelines
2. Put pressure on businesses to keep standards
high.
Individual companies role
1. Code of ethics – guide to acceptable behavior
defined by organization.
2. Whistle blowing- Informing the press or
government about unethical practices in other
organizations. Sarbanes- Oxley act of 2002
protects whistle blowers.
Social responsibility
Recognizing that business activities have an impact on
society. Helping in times of need gives businesses good
advertising and helps society.
2 views of social responsibility
Economic Model
Traditional businesses sell goods or services to make
a profit. Economic model of social responsibility
states that society will benefit the most if businesses
2
