Ethics and Social Responsibility Flashcards
What is organisational social responsibility?
obligation of an organisation to
take actions that protect and improve
the welfare of society as a whole
along with its own interests
What are the 4 major areas that call for corporate social responsibility?
Environmental concerns
Consumerism
Equal opportunity in employment
Community support/Philanthrophy
Why does a business have a social obligation
Business is a vital part of society
Stable environment for long-term profits
Have managerial, financial, technical know-how to help solve society’s problems
What are the reasons for a business not having a social obligation?
Business primary responsibility is to make profits
Social problems are public responsibility
It is unethical for managers to use other people’s money for social responsibility activities
To whom and for what is a business responsible for? What is this concept?
The stakeholder concept
What is a stakeholder?
all groups within or outside the org interest in the co. operations
affect or are affected by
business actions or inactions
What are the major stakeholders?
Shareholders and owners Employees Customers Suppliers Creditors Competitors Community Public interest groups and media Government
Who are shareholders and owners?
individuals or institutions
legally hold shares in
private or public organisation
What responsibility does the management have to shareholders?
Provide a healthy return on investment
Who are employees?
Individuals hired by organisation
perform specific duties
packaged into the job
What do employers have to meet for employees
health, safety requirements
Health and safety requirements include workplaces being
hazard-free
general health and safety of employees protected
Who are customers?
individuals or businesses that buy goods and services
What do customers expect?
Goods and services to be available at a fair price to meet their needs
Products, reliable, durable, high quality
Who are suppliers?
Individuals or businesses that provide goods and services for the agreed compensation
What are the things that are important to suppliers
regularity with which orders are placed
Promptness of payment
Stability and soundness of organisation
Organisation have the responsibility to suppliers to
be prompt in payment
maintain stability of business
Who are creditors
individuals or institutions to which money is owed
What are creditors and lenders interested in?
business liquidity
financial health
What do creditors rely on?
regular payments
all debt to be paid
Who are competitors?
companies in the same industry/ similar industry
offer similar product or service
Competitors have a stake in an organisation’s
performance
Who is the community
group of people living in one place, district or country
Community benefits from the organisation through
jobs that it provides
What is the adverse effect from the organisation to a host community?
Contamination with production waste
Who are public interest groups?
non-profit, voluntary organisations
members have a common cause
seek to influence public policy
Public interest groups use what to disseminate news and information?
media
communication channels
What do public interest groups represent?
interests of other stakeholders
e.g. general public/workers
Who is the government?
A body of people
sets and administers public policy
exercises political power through laws within a country
Why is the government a stakeholder?
Depend on organisations for tax revenues and economic development
Responsibility to regulate business and ensure equipment is not spoiled
Environmental issues stem from
interrelationship of living things and their environment
Businesses can affect the environment in which 2 ways?
Energy conservation
Pollution control
Why is conservation measures required?
Largest consumers of energy
Generate tremendous savings of society’s natural resources
What are the benefits for organisations and consumers in conservation?
reduce costs
keep prices down
What are the conservation actions taken by companies
develop long, short-term conservation plans
studying ways of operating machinery more efficiently
Replacing it with up-to-date energy-efficient equipment
What individuals can do to conserve the environment?
Reduce
Reuse
Recycle
What is pollution?
any contamination of
air, water, land
in which life exists
Why is air pollution a major problem?
it can cause extremely harmful physical effects on people
higher medical expenses
lost wages
reduced productivity
Where does air pollution come from?
industrial processes
burned fuel from power-generating plants
moto vehicles
cigarette smoke
Where does water pollution come from
industrial toxic wastes fertilisers sewage leakage of underground dumps acid rain
What are the actions taken by businesses to reduce pollution?
designated no-smoking areas
car manufacturers redesign their engines
treating waste materials before disposal into lakes and streams
recycling treated water to reuse in production process
What is consumerism
movement designed to provide buyers with
info, bargaining power necessary for obtaining
high quality, safe products and services
What are the issues in consumerism?
incomplete information in advertising
product safety
overcharging/profiteering
coercive selling
Many advertisement give incomplete information that is
ambiguous
What is the tactic used in information-related problems?
bait and switch
What is bait and switch?
The store advertises a product at a low price
tell customer it is out of stock, low quality
recommends a higher priced alternative
How do you solve or control information-related problems?
educate employees communicate with consumers provide brochures and other written materials establish a customer service be honest with advertisement
Why is product safety important?
injuries can come from using mechanical equipment products that fail to work as intended
How is there a lack of product safety?
inadequate engineering or testing
stem from failure to anticipate the way the product will be used
How do businesses assume responsibility for product safety?
product recalls
warranties or guarantees
in-house checks before shipment from factory
evaluation of feedback from users
disclosing information on product quality, pollution from use, product related social information
What is overcharging?
taking advantage of policies to raise prices
What is coercive selling?
use of pressure sales techniques
other coercive methods
force consumers to purchase their products
How should the business ensure equal opportunity in employment?
establishing HR policies affirming equal employment for all
providing equal training and promotion opportunities for all employees
What are business ethics?
standards of conduct or moral judgement
differentiating right from wrong
used by mangers in carrying out their business
form the core of social responsibility causing managers to take socially responsible actions
What are some ethical issues?
conflict between personal values and organisational goals
conflict between organisational goals and social values
hazardous but popular products
exploitation of certain groups
What can happen in a conflict between organisational goals and social values?
company too preoccupied with its goals
loses touch with societal norms
Group that can be exploited include
customers, employees, suppliers
What are the factors affecting business ethics?
individual characteristics
organisation’s structural design
organisation’s culture
What are the individual characteristics affecting business ethics?
Personal values
Ego strength
Why is there personal values?
Every person enters and organisation with a relatively entrenched set of values
What is ego strength?
the measure of strength of one’s conviction
What are the two things in structural design that affects business ethics
guidance
Formalisation
what is formalisation?
rules
job descriptions
written code of ethics
What is a good organisation culture for good business ethics?
high in direction
conflict tolerance
What are the ethical guidelines
Obey the law tell the truth show respect for others stick to the golden rule above all, do no harm The TV test
What is the golden rule?
do unto others as you would have them do unto you
What is the TV test?
have the honesty and integrity to appear in front of the media to tell the truth
What is the most effectives way to encourage ethical business behaviour?
Code of ethics
What does the code of ethnics describe?
general value system
ethical principles
specific rules
guide employees in their daily behaviour
