Chapter 9 - Business ethics, social responsibility and good corporate citizenship Flashcards
The meaning of ethics
What are ethics in a business context?
Ethics are rules and principles of behavior that help in deciding between right and wrong, guiding organisational actions from the mission level.
The meaning of ethics
What areas do business ethics cover?
Business ethics cover macro issues (e.g., pollution reduction, responsible raw material use, corporate reporting) and micro issues (e.g., fair pay, management practices, individual behavior).
The meaning of ethics
When are ethical decisions made in business?
Ethical decisions are made whenever a decision impacts someone else; business ethics often involve multiple perspectives without a single correct answer.
The meaning of ethics
Define ‘integrity’ in a business ethics context.
Integrity is the quality of being honest with strong moral principles, central to ethical behavior and expected in professional conduct.
The meaning of ethics
What is ‘reputation’ and how is it affected by ethics?
Reputation is the beliefs or opinions generally held about an organisation or person, significantly impacted by ethical or unethical actions and decisions.
The meaning of ethics
Give an example of how ethical decisions can affect reputation.
A multinational company may outsource production to reduce costs but face reputational damage if the media expose child labor in its supply chain.
The meaning of ethics
What challenges do organisations face with ethical codes?
Ethical codes are continually evolving and vary across cultures, making it challenging for organisations to consistently align their practices with shifting ethical standards.
Business ethics in the development of
strategy
What are the two key core dimensions of business ethics identified by Chryssides and Kaler?
The two core dimensions are principles and situation.
Business ethics in the development of
strategy
List the five views of business ethics identified by Chryssides and Kaler.
Business is business: Profit maximisation outweighs ethical considerations.
Act consistently with the law: Ethical decisions should be based on legal requirements.
Good ethics mean good business: Ethical behaviour generates positive stakeholder perceptions.
Conventional morality: Business must operate within society’s prevailing moral codes.
Universal morality: Business should adhere to the same standards as in private life.
Business ethics in the development of
strategy
Why is it important to remember that businesses are composed of individuals when considering business ethics?
Individuals implement strategy and help achieve business objectives, so ethical decision-making starts with personal responsibility and behavior.
Business ethics in the development of
strategy
What is the purpose of a code of ethics in a business?
A code of ethics provides guidelines for handling ethical dilemmas in relationships with co-workers, management, clients, and partners, protecting the company’s reputation.
Business ethics in the development of
strategy
What can happen if a code of ethics is not widely known and followed within an organisation?
If not integrated into company culture, a code of ethics can become ineffective and fail to guide employees in decision-making.
Corporate social responsibility as part of strategy
What is the focus of corporate social responsibility (CSR)?
CSR focuses on the approach organisations take to benefit society in general, rather than specific stakeholders.
Corporate social responsibility as part of strategy
What are the five principles that companies should apply according to Coyle (2010)?
Treat employees fairly and with respect.
Operate in an ethical way and with integrity.
Respect basic human rights.
Sustain the environment for future generations.
Be a responsible neighbour in the community.
Corporate social responsibility as part of strategy
What is the key point to remember about CSR in relation to business viability?
While CSR covers ethical, social, and environmental issues, businesses must remain viable and profitable.
Corporate social responsibility as part of strategy
What are the four levels in Carroll’s pyramid of CSR?
Philanthropic responsibilities: Going beyond society’s expectations and contributing resources.
Ethical responsibilities: Abiding by societal ethical norms.
Legal responsibilities: Complying with legislation.
Economic responsibilities: Ensuring profitability.
Corporate social responsibility as part of strategy
What are the four basic types of corporate social responsibility stances?
Laissez-faire view: Companies comply with the law but have no obligation beyond that.
Enlightened self-interest: Corporate image is enhanced by taking wider responsibilities.
Forum for stakeholder interaction: Recognising stakeholders’ legitimacy and going beyond profit generation.
Shaper of society: Pursuing social and market change with visionary leadership and collaboration.
Corporate social responsibility as part of strategy
What is the purpose of social auditing in CSR?
Social auditing ensures that CSR issues are regularly reviewed within organisations.
Corporate social responsibility as part of strategy
What are some internal issues covered in CSR auditing?
Employee welfare, such as medical care and extended sickness leave.
Working conditions, including safety standards and social clubs.
Job design to increase worker satisfaction.
Corporate social responsibility as part of strategy
What are some external issues covered in CSR auditing?
Environmental issues, such as reducing pollution beyond legal limits.
Marketing decisions, including ethical advertising standards.
Fair terms of trade with suppliers and community activity like sponsoring local events.
Sustainability as part of strategy
What are the two main categories addressed by sustainability in business?
The effect business has on the environment.
The effect business has on society.
Sustainability as part of strategy
Why is sustainability important in long-term business strategy?
Sustainability helps businesses consider their future impact on the environment and society, ensuring long-term viability and growth.
Sustainability as part of strategy
What are the benefits of incorporating sustainability into strategic thinking?
Business protection: Identifying key risks to the business and stakeholders.
Business operation: Recognising costs (both indirect and direct).
Business growth: Enabling greater consideration of new opportunities.
Business reputation: Enhancing reputation as a business with a sustainable CSR approach.
The role of individuals and managers
At what levels should ethical issues be considered?
Ethical issues must be considered at both the individual level and the corporate level.
