BADM1103F07Ch04

1/16Demonstrating Ethical Behavior and Social Responsibility 2/16Ethics Is More Than Legality•Enron•Tyco•Martha Stewart•Moral and ethical behavior are not the same as following the law3/16Ethics Is More Than Legality (cont.)•Ethics•The proper relations with and responsibilities toward other people •Legality•Narrower issues •Many immoral acts fall within laws 4/16Ethics Is More Than Legality (cont.)•Ethics•Standards of moral behavior•Behavior that is accepted by society as right versus wrong 5/16Managing Business Ethically and Responsibly •Setting Corporate Ethical Standards•Compliance-Based Ethics Codesethical standards that emphasize preventing unlawful behavior by increasing control and by penalizing wrongdoers 6/16Managing Business (cont.)•Integrity-Based Ethics 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 7/16Managing Business (cont.)•Whistleblowerspeople who report illegal or unethical behavior•Corporate and Criminal Fraud Accountability Act (Sarbanes-Oxley, 2002)contains protections for corporate whistleblowers8/16Corporate Social Responsibility •Corporate Social Responsibility (CSR)•A business’s concern for welfare of society •Milton Friedmanthe only social responsibility of business is to make money for stockholders 9/16Corporate Social Responsibility (cont.)•Corporate Social Performance •VS•Corporate Financial Performance10/16Corporate Social Responsibility (cont.)•Social Performance •Corporate Philanthropythe dimension of social responsibility that includes charitable donations to nonprofit organizations•Corporate Social Initiativesenhanced forms of corporate philanthropy more directly related to the company’s competency11/16Corporate Social Responsibility (cont.)•Corporate Responsibilitythe dimension of social responsibility that includes everything from hiring minority workers to making safe products •Corporate Policythe position a firm takes on social and political issues12/16Corporate Responsibility•Responsibility to Customers •Responsibility to Customers Investors •Insider Trading insiders use private company information to further their own fortunes or those of their family and friends Regulation FD 13/16Corporate Responsibility (cont.)•Responsibility to Employees•Responsibility to Society and the Environment 14/16Corporate Responsibility (cont.)•Social Auditing •A systematic evaluation of an organization’s progress toward implementing socially responsible and responsive programs15/16Corporate Responsibility (cont.)•Watchdogs•Socially Conscious Investors •Environmentalists •Union Officials •Customers 16/16International Ethics And Social Responsibility•Standards on Social Responsibility •Inter-American Convention Against Corruption •International Organization for Standardization (ISO)