AFM 132 - Chp. 4 - ethics _ social responsibility

Question 1

Why is it important for businesses to have ethics + social responsibility

Answer 1

consumers expect more of the businesses for social responsibility

we expect more of how businesses behave

Question 2

Why is trust important to a business

Answer 2

to support a loyal, growing customer base - legal considerations

Question 3

Define ethics

Answer 3

guiding principle that can help us navigate decision making

Question 4

what are some examples of businesses do that are somewhat legal but unethical?

Answer 4

1. raising price of a product
2. tax loopholes
3. use of child labour

Question 5

what are the benefits of having ethical practices

Answer 5

1. to keep/attract customers - ensure business practice don’t deter existing customers or create barriers in attracting new ones
2. maintaining a strong reputation in a competitive marketplace - avoid risk of tarnishing brand image + losing customers if they’re displease with the actions of the company
3. retain + attract employees - if employees are the ambassadors for the company, they must be aligned with the company’s values to stay
4. avoid government intervention - enactment of new laws and regulations to control business activities
5. avoid legal action - if concerns escalate into litigation, resources, time and effort could be taken away from operating and growing the business.

Question 6

How can good behaviour impact the profitability of a company

Answer 6

the more positive the image for a company, companies can be rewarded over time through increased profitability as consumers are more concerned with ethics and social responsibility

Question 7

what strategies can companies use to support business ethics

Answer 7

1. tone at the top - management must set the tone by modelling the action and behaviour they wish to see
2. support for a code of conduct - employees will have guidance to make the best decision day-to-day
3. training + retraining - regular and ongoing training on ethical decision making
4. adequate ethics resources - opportunities for employees to ask questions or communicate concerns
5. inform stakeholders - informing external stakeholders about your code of conduct and values can reduce pressures to act unethically

Question 8

Define whistleblower

Answer 8

those who step up to report illegal or unethical behaviour

Question 9

Define ethical dilemma

Answer 9

problem where a difficult choice has to be made with potentially no desirable alternatives

Question 10

What are some ethicial dillemmas business could face

Answer 10

1. pressures to release the product early - could the company be under pressure to minimize certain adverse effects to release the product early and make more profit
2. testing practices - when can we determine if the product is safe enough for testing?
3. pricing - profit vs accessibility for consumers

Question 11

What are some questions to ask to navigate ethical dilemmas

Answer 11

1. does it violate any laws or policies?
2. are the alternatives fair for all parties involved?
3. how will you feel about the decision?

Question 12

Define corporate social responsibility (CSR)

Answer 12

how a company steps up to take care of those around them in society

Question 13

what are the critics vs supporters of CSR?

Answer 13

critics - main responsibility of a company is to maximize profits and shareholder value

supporters - acting responsibly can generate more money for investors in the long run - can strengthen their brand by attracting more customers, retain loyal + dedicated employees.

Question 14

Why does being socially responsible have a competitive advantage?

Answer 14

builds positive image + internal organizational culture - attracts employees + customers, increases brand power in the marketplace

Question 15

What are the benefits for investing in socially responsible behaviours for companies?

Answer 15

increases market value, avoid market losses from crises, increased revenue, reduced turnover rate, increased employee productivity + engagement

Question 16

Define corporate philanthropy

Answer 16

donating money or time and skills to various causes from the corporation

Question 17

Define fair trade

Answer 17

ensures produces in developing countries are paid a fair price for the goods that we purchase from them

Question 18

Define sustainable development in terms of a business

Answer 18

looks at business operations and whether they can support the needs or current + future generation without negative consequences

Question 19

What are some strategies to keep sustainability on top of mind

Answer 19

1. planned spending in annual budgets - dedicated fund to support sustainability efforts
2. recognition and reward systems - recognizing employees that contribute to sustainable efforts
3. monthly accountability meetings - employees regularly connecting abut sustainability
4. regular reporting of progress + next steps - voluntary reporting on a company’s social, environmental + economic impact

Question 19

Define the circular economy

Answer 19

the idea of repurposing our waste to build capital - letting our goods of today become the the resources for tomorrow through repurposing + redesigning

Question 20

What stakeholders do businesses have? and the company’s responsibility to them

Answer 20

1. employees - companies are responsible for creating meaningful jobs with growth potential + fairly compensate employees for their efforts
2. customers - company is responsible for understanding + satisfying the needs + wants of customers
3. investors - company is to have ethical + responsible behaviour to add the their profitability
4. lending institutions - companies must manage their financial obligations
5. communities - companies must evaluate the negative/positive impact they have on their communities
6. governments - companies should be mindful of the laws + how to operate cooperatively with the government

Question 21

define a social audit

Answer 21

evaluating + reporting on how a company makes progress towards their social responsibility priorities

Question 22

What’s the triple bottom line reporting

Answer 22

a framework used by organization to voluntarily report their progress on social, economic, and environmental results for a reporting period.

this reporting goes beyond discussing financial performance and aims to address People, Planet, and Profit

Question 23

What’s the benefit of TBL?

Answer 23

improving transparency of business operations + their impact on society

Question 24

challenges of TBL?

Answer 24

no standard of measurement + too subjective

Question 25

Which stakeholders would strongly advocate for TBL?

Answer 25

socially conscious investors, environmentalists, customers

Question 26

What can companies do to show their commitment to being socially responsible?

Answer 26

get a certificate form a third party organization - e.g. b-lab that specializes in auditing for social responsibility

and do TBL