Chapter 2 - Being Ethical and Socially Responsible

Question 1

Business Intergrity

Answer 1

the ability to act honestly, ethically, and in a socially responsible manner

• Being honest and transparent in reporting earnings and profits to shareholders and other stakeholders
• Being truthful to customers about products
• Willingness to adapt to new business practices

Question 2

Corporate Governance

Answer 2

the way in which an organization is governed, directed, and administered; requires balancing the interests of all stakeholders

• Board of Directors are responsible for the organization being managed to ensure long-term success. (Responsibility and potential liabilities, accountability, regulation of complex systems).

Question 3

Ethics

Answer 3

the study of right and wrong, and of the morality of the choices individuals make

Question 4

Business ethics

Answer 4

the application of moral standards to business situations

Question 5

Three Components of Business Ethics (3 points)

Answer 5

-Competing fairly and honestly
-Avoiding conflicts of interest
-Being transparent

Question 6

Maintaining High Ethical Standards (Taking these things into account to be ethical)

Answer 6

Customers expect products to be: safe, reliable, reasonably priced.

Suppliers want: timely payments adequate lead time on orders.

Investors want to boost: sales, profit, return on investment.

Creditors want: accounts to be paid on time, accurate accounting.

Employees demand to be treated: fairly in hiring, promotion, compensation.

Question 7

Factors That Affect the Level of Ethical Behaviour in an Organization

Answer 7

• Individual: knowledge of an issue, personal values and goals.
• Social: the law, cultural norms.
• Opportunity: competitive environment, level of supervision, enforcement.

Question 8

Social responsibility audits

Answer 8

comprehensive reports of what an organization is doing in regard to social issues that affect it

Question 9

The Auditor General perform these duties:

Answer 9

• Ensures management’s information is reliable and complete
• Identifies opportunities for improving control and use of public resources
• Makes recommendations to improve systems and practices

Question 10

Triangle of Ethics (an individual is more motivated to act unethically when there is):

Answer 10

1. Some kind of perceived pressure
2. Perceived opportunity
3. A way to rationalize the unethical decision or act as consistent with one’s values

Question 11

Stages of Ethical Development

Answer 11

-Preconventional Ethics
-Conventional Ethics
-Postconventional Ethics

Question 12

Preconventional Ethics:

Answer 12

a stage in ethical development of individuals in which people behave in a childlike manner and make ethical decision in a calculating, self-centred, selfish way based on the possibility of immediate punishment or reward.

Question 13

Conventional Ethics:

Answer 13

second stage in the ethical development of individuals in which people move from an egocentric viewpoint to consider the expectations of an organization or society.
Canada Business Corporations Act

Question 14

Postconventional Ethics:

Answer 14

the third stage in the ethical development of individuals in which people adhere to the ethical standards of a mature adult and are less concerned about how others view their behaviour than about how they will judge themselves in the long run.

Question 15

Suggestions for Filtering Your Decisions

Answer 15

1. Understand and obey the law
2. Understand and obey the policies of your industry and organization
3. Recognize factors that lead to ethical compromises
4. Ensure your actions satisfy the three components of business ethics

Question 16

Three main parties can promote acceptable levels of ethical behaviour:

Answer 16

1. Government
2. Trade Associations (Canadian Association of Petroleum Producers)
3. Organizations

Question 17

Legislation That Guides Ethical Decision Making

Answer 17

• Canada Consumer Product Safety Act
• Competition Act
• Food and Drugs Act
• Consumer Packaging and Labelling Act
• Textile Labelling Act
• Motor Vehicle Safety Act

Question 18

The Role of Trade Associations in Encouraging Ethics

Answer 18

• Demonstrate commitment from leadership
• Adopt a code of ethics
• Designate an ethics officer
• Protect whistle-blowers

Question 19

Navigating Ethical Dilemmas as a Manager

Answer 19

1. Listen and Learn
2. Identify the Ethical Issues
3. Analyze the Options
4. Identify the Best Option
5. Explain Your Decision and Resolve Differences

Question 20

Increasing Social Responsibility

Answer 20

Recognizing the businesses have an impact to society

Question 21

The Economic Model of Social Responsibility

Answer 21

-The view that society will benefit most when the business is left alone to produce and market profitable products society needs.

Question 22

The Socioeconomic Model of Social Responsibility

Answer 22

• The concept that business should emphasize note only profits but also the impact of its decisions on society.
  ○ Business is part of our society, it cannot ignore social issues.
  ○ Business has the technical, financial, and managerial resources needed to tackle today’s complex social issues.
  ○ By helping resolve social issues, business can create a more stable environment for long-term profitability.
  ○ Socially responsible decision making by businesses can prevent increased government intervention, which would force business to do what they fail to do voluntarily.

Question 23

Stakeholder

Answer 23

anyone impacted by the activities of the business.

Question 24

Primary Stakeholder of a Business

Answer 24

Primary Stakeholder of a Business
- Investors
- Employees
- Customers
- Consumers
- Suppliers
- Local Community
- Government

Question 25

Social Investing:

Answer 25

investors looking for opportunities that align with their beliefs and values.

Question 26

Responsibility to Employees

Answer 26

- Removing Discrimination of minorities in the workplace - Perks to workers -> Google with parental leave, free gourmet food, etc. - Employment Equity: increased representation of minority groups in the workplace through provision of equal employment opportunities for all. -Canadian Human Rights Commissions (CHRC): ensures federally regulated employers are fulfilling their legal obligation to provide equal employment opportunities to women, people with disabilities, Indigenous peoples, visible minorities.

Question 27

Responsibility to Consumers

Answer 27

- Caveat Emptor: "let the buyer beware." --> What you see is what you get (not exactly what you expect) Hazardous Products Act (1970)

Question 28

Consumer Rights

Answer 28

- Right to Safety: products must be safe and have instructions for intended use. - Right to Be Informed: consumers must have complete information before buying a product and how to properly use it. - Right to Choose: choice of products offered by different manufacturers. - Right to Be Heard: companies must listen and respond to their complaints.

Question 29

Responsibility to Suppliers

Answer 29

Suppliers can decrease costs and create efficiencies, allowing businesses to focus on their activities.

Question 30

Concern for the Natural Environment Basic Environmental Protection

Answer 30

- Pollution/contamination in the water, land, and air - Depleting natural resources - Regulations - Recycling - Green Marketing: the process of developing and promoting environmentally friendly products and services. -Freshii "Mission Green" -> biodegradable corn and potato resin for most packaging.

Question 31

Sustainability Strategies

Answer 31

- Tim Hortons facing pressure to related to waste created by coffee cups and lids - Google and Facebook for high consumption of electricity - Sustainability - Product Design Improvements - Facility and Vehicle Improvements - Community Outreach

Question 32

Code of Ethics

Answer 32

a written guide to acceptable and ethical behaviour as defined by an organization

Question 33

Whistle-Blowers

Answer 33

an employee who exposes or reports unethical practices within the organization

Question 34

ethical dilemmas

Answer 34

decisions where every alternative impacts various stakeholders in unpleasant ways