Chapter 2: Being Ethical and Socially Responsible Flashcards
Business Integrity
ability to ac honestly, ethically, and socially responsible
How can companies demonstrate their business integrity
be honest and transpoarent in reporting earnings, honest promotions, true info about product ingredients, adapting business practices with society’s needs
shareholder
people who hold invest and own sharesin a businesse
stakeholder
SOMOENE impacted by some event directly
Corporate governance
how the organization is governed, directed, and administered
How is corporate governance achieved
balancing interest of all stakeholders
Who is reposnosbile for corporate governance
the board of directors/ directors manage the organization
How does canada look at board of directors
they closely analyze the actions of the board of directors
difference between what companies focus on tradition vs now
tradition/ returns of shareholders only
now/ high corporate governance and adress stakeholder concerns
how do business owners/managers inspire their employees
with their actions and what is acceptable or not
Ethics
the study of right and wrong and of the morality of the choices we make
Business ethics
application of moral standard to business situations
3 categories of business ethics
- competing fairly and honestly
- avoiding conflicts of interest
- being transparent
Category of business ethics, Competing fairly and honestly
FAIR: Don;t be unfair to customers employees or shareholders
HONEST: DONT FALSE ADBERTUSE, DONT DECIEVE OR INTIMIDATE
Category of business ethics, Avoiding conflicts of interest
what is it
when employee takes advantsge of a situation for personal interest!
or
complex relationship sbetween coworkers
are bribes illegal! UNETHICAL?
YES
What is the employees fundamental job
to act in the interest of the employer
Category of Buisness ethics, BEING TRANSPARENT
when companies proactively make info publily available to encourage ethical decision making within the org
MEANS YOU SHOULD DISCLOSE EVERYTHING THAT COULD EVEN BE CONFLICT OF INTEREST
TRANSPARENCY
FREE FLOW of indo inside and outside the company to
employees
investors
customers
stakeholders
Social responsibility audit
this is in the transparency category of business ethics
these are comprehensive reports about what organization is foing in regard to social issues that affect it
what issues do social responsibility audits refer to
labour nd treatment of foreign workers
working conditions
are social repsonsibility auditors first party or third party, why
third party so that concerns can be adressed objectively
What body in canada promotes confidence in products that are advertised
AD STANDARDS
How are levels of government held responsible
THEY ARE HELD RESPONSIBLE TO CITIZENS THROUGH THE AUDIT SYSTEM
-Through the Auditor General of Canada resources are ensured to be properly allocated!
Who is the auditor general, wat do they do
independent of the government and they:
1. ensure management information is reliable and complete
2. identifies opportunities for improving controla nd use of public resources
3. makes recommendation to improve systesa dn practices
not taking bribes is an example of which branch of business ethics
COMPETING FAIRLY AND HONESTLY
3 types of factors that affect ethics
individual factors
social factors
opportunity
Individual factors that iinfluence ehtics
-Key influencers
Knpwledge of an issue
personal values and goals
ethics-Social factors key influencers
the law
cultural norms
ethics- OPPORTUNITY factors key influencers
competitive environment
level of supervision
enforcement
What is the triangle of ethics
the triangle states that an individual is more motivatred to act unethically when there is
- pressure
-opporutityny
-a way to rationalize the enethical decision/act as consistent with values
Stages of ethical development
precconvential -> conventivnaol -> postconvential
Preconventional ethics
childlike ethics- calculated self-centred, selfish ethics
BASED ON POSSIBILITY OF IMMEDIATE REWARD OR PUNISHMENT
like a child your ethics comes from personal gain
ex of preconventional ethics
business who doesnt wanna violate carbon emission laws bc he fears the fine
ex of preconventional ethics
business who doesnt wanna violate carbon emission laws bc he fears the fine ONLY!!!!
Conventional ethics
Geared towards more expectations of soceity,
conformity, loyalty, and obedience to organization/society’s expectations become important
EMPLOYEE ONLY PERFORMING TO THE LEVEL EXPECTED ONLYYY
Postconventional ethics
ethical standards of a mature aduly!!!!!
people are more concerned about how they percieve and respond ot thesmselves and less about how they are seen
ex of post conventional
personally questioning behavoiour that though it is legal maybe it is wrong
fast food restaturant might refuse to offer styo stuff bc not environmentally friendly
4 steps to see if your decision is legal or/and ethical
1) understand and obey the law
2) Understand an dobey the policies of your org
3) recognize factors that lead to ethical compromises
4) ensure all actions satisfy three components of business ethics (transparency, competing fairly and honestly,
what is illegal and ethical
collarborating with others in apositive way (medical companies collaborate to have low price for low income countries) COLLUSION
providing rock-bottom prices to distributors in underserved areas
ethical grey areas
Laws and regualtions can be hard to interpret
what three main parties can promote acceptable levels of ethical behaviour
the government, trade associations, and organizations
What is the role of govt in encouraging ethics
the legislate more regulations!
canada consumer product safety act
more safety in consumer products
competition act
prevents anti-competiitve practicies
food and drugs act
protects canadians against health harazards and frauds in these two industries
Consumer packaging and labelling act
requires uniform packaging and labelling of goods to prevent misconception
texttile labelling act
requires cloth labels to contain meaningful ifo
motor vehicle safety act
regulates manuafactore and imporations of motor vehicles to prevent damage and injuries
How do trade associaitions encoruage ethics
for their members, they exert pressure on members to stop enganging in questionable business practiices
such as you cant dine your clients
how do orgnaizaitons encourage ethics
companies promote ethics in 4 ways:
1. commitement to it by leadershipa
2. adopt a code of thics
3. designate ethics officer
4. protect whistle blowers
How to solve ethical dilemma
- listen and learn
- idenitfy the ethical issue
- analyze options
- identify best option
- explain your decision resolve differences
what is ethical dilemma
decisions where every alternative impacts stakeholders badly
social resposibility
is the recognition that business actiivites have an impact on osciety and that impacts must BE CONSIDERED
How manymenamagemetn attitudes doe social responsibility have?
2
ECONOMIC MODEL
SOCIOEOCNOMIC MODEL
Economic model of social responisbility
society will benefit most when business is only produceing and marking profitable products that society needs
BELIEF THAT SOCIAL OBLIGATIONS ARE MET THROGUH THE BASIC FUNCITONING OF A BUSINESS, NO NEED TO DO EXTRA STUFF- THAT GOVT HOB
Justificaitons for eocnominc model of sr
- business manageers resposnibilte to mostly shareholders
- corporate taletn should be used to productive efficeny
- social problems cant be solved by individual businesses
GOAL OF A BUSINESS IN ECONOMIC MODEL
what is ethics level
to make a profut
preconventional/conventional
The socioeconmic model fo social repsonsibipuly
Managers accountable to society as a whole and the gen pop
FOCUSES ON PROFITS AND ALSO ON THE IMPACT OF BUSINESS DECISIONS TO SOCEITY!
What level of ethics is socioeconomic model of social responsility
Conventional.post conventional
goal of socio eocnomic model of sr
TO SERVE COMMUNITY AND ALSO SEEK PROFITS
Strategic giving
giving something with an expectation to gain something
companies use this in the socioeconomic model!!!!!!! of social responsibility
vestedd interest
a stake
primary stakeholders examples
investors
employees
customers
suppliers
gen public
what do investors want in their companies
ethical and posibitive reputation
social investing/ethical investing/green investing
investors loojing sfor opportunityies that align with their beliefs and balues
canadian human rights act
employment equity act
ensures all employeees in federal orgs treated equally
employment equal opps for women people with disabilities aboriginal and visible minorities
which commision is responsible for determinignw ehtehter empolyers fulifll legal obligations to rep mionrity groups
the canadian human rights commission
customers vs consumers
customers purchase shit
consumers consume it
in the past consumers were subject to what
caveat emptor- BUYER BEWARE!!!! WHAT YOU SEE WHAT YOU GET
once canadian associaation of ocnsumers formed, then it chanded
each province has what
own cosnueer protection legislation
4 basic consumer rights
- right to sagety (instructions)
- right to be informed (product details)
- right to choose (choice of products)
- right to be heard (companies must respond)
how do businesses support their suppliers
give contracts
pay invocies
give appropaorite lead times
WHAT IS THE KEY TO SUPPLY CHAIN RESPONISBILITY
EVERY OCMPANY INT EH CHAIN SHOULD BE ETHICAL AND SOCIALLY REPSONSIBLE!!!! OR NONE CAN SAY THEY ARE
WHAT CAN SUPPLIERS DO
Suppliers can decrease costs and create efficiencies, allowing businesses to focus on their core activities.
HOW CAN COMpanier reduce environmental impact
redue waste from operations! identify eliminate ineffieicneince
sustainiablity
actiivites that meet the needs of present without compromising futures
substainability strategies
- product design improvments (Reduce bad mateirals)
- faclitiy and vehicle improvements (eneregy efficiency campaigns)
- community outreach (Recycling campaigns)
