chapter 23 Social Responsibility Flashcards
business ethics definition
the moral principles that guide how a business makes decisions considers right and wrong fairness, honesty, and respect in dealings with stakeholders regardless of impact on profits
unethical business practice
bribery and corruption child labour unsafe products product testing on animals pollution/illegal dumping overcharging
why act inethically
1) greed- own interest ahead of common good
2) profit- is a profitable decision the correct one
3) fear- employees afraid of poor performance
4) lack of regulation
5) lack of leadership- culture of honesty and transparency is preferable to secrecy and corruption
whistleblower
someone who publicly discloses unethical business practices
code of ethics
formal written statement
setting out the modes of behaviour expected from a business in its dealings with stakeholders
encourage a culture of openness
fairness, honesty, and respect
Outline how ethical behaviour in business can be encouraged
- Establishing a Code of Ethics
- Encouraging ‘whistle blowing’ – rewards
- Training – induction and annual training
- Discipline poor behaviour – fines, demotion, dismissal
- Ethical Audit – external auditor to identify areas for improvement
- Highlight Role Models – lead by examples, regards for ethical behaviour
benefits of introducing a code of ethics
- involves staff in decision making
- sets high standards for staff to follow
- improves reputation and brand image
- creates clear rules and procedures
- encourages whistleblowing
challenges of introducing a code of ethics
- difficult to change culture
- needs to remain up-to-date
- difficult to enforce
- training costs(time and money)
CSR
Corporate Social Responsibility
It is the duty of a business to treat everyone they come into contact with honestly and fairly, making a positive contribution to the environment that they operate in
company’s responsibility to investors
honest and transparent reporting of the company’s financial position, pay out reasonable dividends based on profits
eg Volkswagen’s share price dropped when they lied about emissions
company’s responsibility to employees
pay a fair wage
provide proper working conditions and hours
eg Aldi paying above minimum wage
company’s responsibility to customers
honest advertising
informing about ingredients, processes, and sustainability of material, ensure customers are not misled or hurt in any way
eg horse meat found in beef burgers in Tescos and Dunnes
company’s responsibility to suppliers
follow a fair tendering process; pay promptly; avoid taking too much credit
eg unfair tender for national broadband by gvt
company’s responsibility to the government
pay tax owed to revenue in full and on time; obey the law
Acronym for environmental social responsibilities
CHIPS
Environmental Social Responsibilities
C
Committed
to rectifying mistakes in the most environmentally friendly way
eg UCC implemented changes to minimise waste and became the 1st university to get a green flag
Environmental social responsibilities
H
Honest
report all accident/breaches and take responsibility for them
eg alert the EPA to any accidents as soon as they occur
Environmental Social Responsibilities
I
mgt trying to bring in pro-environmental policies,
update and improve processes, packaging, recycling
eg PUMA eliminating hazardous materials in its production process
Environment social responsibilities
P
promotion
promote environmental issues among staff and customers, make staff aware of environmental responsibilities, provide resources
eg Dublin City Council holds an employee forum to discuss environmental issues
Environmental social responsibilities
S
Sensitive
to environmental issues and try to incorporate them into their own company policy
eg Amazon trying to reduce packaging or spending money to protect employees from covid 19
Increased cost of being a socially responsible business
Increased wage bill
More expensive raw materials
Invest in machinery with lower emissions
Initial investment in renewable is expensive
Decreased cost of being socially responsible
Lower chance of being fined by the EPA for breaking environmental laws
Lower chance of being sued for discrimination by employees
Usage costs will be lower for renewable energy
Increase in revenue due to being socially responsible
Increase sales
Easier to attract capital
New markets
Increased productivity
Great customer loyalty
Less likely to face “green taxes”
Advantages of being socially responsible
Increase sales
Reduced costs
Easier to attract and retain employees
