Ethics & Social Responsibility:

A Close Relationship

SOCIAL
ETHICS
Beliefs about RESPONSIBILITY
right and wrong The obligation of a business
to contribute to society

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 Learning Objectives

• After completing this chapter, you’ll be able

to:
• Explain business ethics.
• Give reasons why ethical behavior is good
for business
• Define social responsibility.
• Describe the social responsibilities
businesses have to society.

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publicly accessible website, in whole or in part.
 Why It’s Important?

• Understanding business ethics and social

responsibility makes you informed of your
rights as a consumer, an employee, and a
citizen.

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 What Is Ethics?

• Ethics is the set of moral principles by which

people conduct themselves personally, socially,
or professionally

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publicly accessible website, in whole or in part.
 What Is Business Ethics?

• Business ethics is a set of laws about how a

business should conduct itself.
• In general, for any business to be successful, it
must operate legally and humanely.

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 ENVIRONMENTALLY FRIENDLY

• Ethics is the set of principles by which you

conduct yourself in society.
• How often do you help the environment?
• What do you do?

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 Legal Responsibility

• Sweatshops are factories that pay workers

poorly, are unhealthy, and treat workers badly.
• The Occupational Safety and Health
Administration (OSHA) is a division of the
Department of Labor that sets and enforces
work-related health and safety rules.

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publicly accessible website, in whole or in part.
 Legal Responsibility

• Other independent agencies protect

consumers, monitor broadcast
communications, and address discrimination in
the workplace
• Most businesses police themselves by
distributing codes of ethics.
• A code of ethics is a set of strict guidelines for
maintaining ethics in the workplace.

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 Legal Responsibility

• Businesses that regulate themselves are able

to operate more freely.

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 Ethics as Good Business

• Unethical business practices can affect your

business indirectly.
• The amount you make in profits from one
unhappy customer can translate into a lot more
lost because of missed repeat business.

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 Ethics as Good Business

• Treating employees unethically can also

backfire.
• Mistreating employees leads to a high turnover
rate. This increases the cost of hiring and
training new employees.

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 Important Ethical Questions

• When considering a questionable course of

action, you have to ask yourself these important
questions:
• Is it against the law? Does it violate company or
professional policies?

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publicly accessible website, in whole or in part.
 Important Ethical Questions

• What if everyone did this? How would I feel if

someone did this to me?
• Am I sacrificing long-term benefits for short-
term gains?

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publicly accessible website, in whole or in part.
 Making Decisions on
Ethical Issues

• Here are some steps if you find yourself in an

ethical dilemma:
1.Identify the ethical dilemma.
2.Discover alternative actions.
3.Decide who might be affected.
4.List the probable effects of the alternatives.
5.Select the best alternative.

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 Graphic Organizer

• Important Ethical Questions

• Does it violate the law or policies?
• What if everyone did this, but it’s bad?
• Would this sacrifice long-term benefits for
short-term gain?

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publicly accessible website, in whole or in part.
 Social Responsibility

• Social responsibility is the duty to do what is

best for the good of society.
• The ethical obligations of a business are to:
• Provide safe products
• Create jobs
• Protect the environment
• Contribute to the standard of living in society

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publicly accessible website, in whole or in part.
 Social Responsibility

• A conflict of interest is when a business is

tempted to put profits before social welfa

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 Responsibility to Customers

• The Food and Drug Administration (FDA), a

government agency, protects consumers from
dangerous or falsely advertised products.

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publicly accessible website, in whole or in part.
 OVER-THE-COUNTER MEDICINE LABEL

• The FDA governs advertising and labeling

of over-the-counter medicines.

• Analyze why the FDA officials might feel

that regulation of advertising and
packaging labels is necessary.

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 Responsibility to Customers

• Fair competition between businesses is healthy

for the marketplace, but some companies don’t
always play reasonably.
• Some companies use unethical means to
eliminate competition.
• One of the most common means is to conspire
with other companies to control the market for a
product.
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 Responsibility to Employees

• Businesses have a social responsibility to

create jobs.
• They are expected to provide employees with
safe working conditions, equal treatment, and
fair pay.

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 Responsibility to Employees

• The Equal Pay Act (passed in 1964) requires

that men and women be paid the same wages for
doing equal work.
• The Disabilities Act bans discrimination against
persons with physical or mental disability.
• It’s in a company’s best interest to treat its workers
fairly otherwise low morale, poor productivity, and
a high turnover rate are its troubles.

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publicly accessible website, in whole or in part.
 Responsibility to Society

• Businesses have responsibilities not only to

customers and to employees but also to society
as a whole
• The government created the Environmental
Protection Agency , an agency that enforces
rules that protect the environment and control
pollution.

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 Responsibility to Society

• Many businesses plan for their social

responsibilities just like planning for production
and sale of their products.

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publicly accessible website, in whole or in part.
 QUIZ

1.Define social responsibility.

2.What is a conflict of interest?
3.What do companies adopt in the workplace to
treat their workers fairly?
4.Why should a company makes a vested
interest in nature over its products?

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 Group Work

• How does the consumer pay for a company’s

environmentally responsible inventions?
• What are social issues you're interested in pursuing?
• How are businesses involved?
• How do government protect society from
genetically modified organisms?

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 The End

e consumer pay for a company’s

environmentally responsible inventions?

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publicly accessible website, in whole or in part.
 Ethics: Multiple Touchpoints

Individuals must make their own

ethical choices

BUT

The organization can have a

significant influence on
decisions
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©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a
publicly accessible website, in whole or in part.