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Understanding business 8th by mcchugh nickels chapter 04

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CHAPTER

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Demonstrating
Ethical
Behavior
and Social
Responsibility

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Nickels

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McHugh

McGraw-Hill/Irwin
Understanding Business, 8e

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McHugh
1-1

4-1

© 2008 The McGraw-Hill Companies, Inc., All Rights


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Ethics
• More Than Legality
• Standards are

with
each
• Ethics begins
Fundamental
of us

4-2


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Top U.S. Ethical Issues

Source: CMO Magazine, October 2004



4-3


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Ways to Prevent
Unethical Behavior

Source: CMO Magazine, Oct. 2004

4-4


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Privacy Protectors
Based on a Privacy Trust Score (PTS):
• Health care providers scored the highest
• Grocery Stores and Department of Homeland
Security (DHS) scored the lowest
• Democrats have higher PTS than all other political
affiliations
• 81% of the respondents feel privacy is important
or very important

Source: www.darwinmag.com, November 2003

4-5


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Ethics of MBA Students
Percent of MBA Students Who Would:






Buy Stock on Inside Information

52%

Reveal Corp. Secrets to Spouse/Family

50%

Let a Gift Sway Purchasing Decision

26%

Pay Someone Off to Close a

13%

Business Deal
Source: USA Today

4-6


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Most Popular Ways to
Monitor Employees


Internet (74%)



Background Exams (62%)



Store and Review Email (43%)



Store and Review Computer Files (31%)



Videotape Employees (18%)

Source: USA Today

4-7


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Ethics Check Questions:

• Is It Legal?
• Is It Balanced?
• How Will It Make Me Feel About
Myself?
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Why Don’t We
Trust Corporations?

Source: USA Today

4-9


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Factors Influencing
Managerial Ethics
Organizational

Environmental

• Values
• Work

• Top Level Mgmt.
Philosophy

• Competition

Background
• Family Status

• The Firm’s
Reward System

• Personality

• Job Dimensions

Individual

• Economic
Conditions
• Social/Cultural
Institutions

4-10


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Codes of Ethics

• Compliance-Based
• Integrity-Based

4-11


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Steps to Improve
U.S. Business Ethics

1.Top management support
2.Employees’ understanding
3.Managers’ training
4.Ethics Office
5.Outsiders must be informed
6.Enforcement of ethics code
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Levels of Corporate
Social Responsibility
Societal Responsibility
Stakeholder Responsibility
Ecological
General

Customers Profit

Profit Responsibility

Environment

Owners/Stockholders Employees

Public

Suppliers/Distributors
Public Interest Groups

Source: Marketing,
Marketing, 5/E by Berkowitz, Kerin, Hartley, and Rudelius.

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Corporate Responsibility
(Percent of country’s top 100 companies that publish
separate CR reports)

Source: Financial Times, June 15, 2005

4-14


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Social Audit

• Company
• Outside Groups that serve
as watchdogs:

• Socially-Conscious
Investors
• Environmentalists
• Union Officials
• Customers

4-15


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International Ethics
and Social Responsibility


Ethical problems are Not Unique to
the U.S. managers



Demand for Socially Responsible
Behavior from Global Suppliers



Joint Initiative on Corporate
Accountability and Workers’ Rights



Inter-American Convention Against
Corruption
4-16


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Best Company Reputation


Johnson & Johnson (80.6)



Coca-Cola (79.7)



Google (79.5)



UPS (79.4)



3M (78.8)

Source: USA Today

4-17


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Most Admired
Global Companies
1.

General Electric

6. Microsoft

2.

Toyota

7. Dell

3.

Procter & Gamble

8. Berkshire Hathaway

4.

FedEx

9. Apple Computer

5.

Johnson & Johnson

10.Wal-Mart

Source: Fortune, 2006

4-18



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