Business Ethics and Social Responsibility

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Business Ethics and Social Responsibility
Introduction | Ethics | Code of Ethics | Social Responsibility | Social Audit | |
Introduction| |
The world of business is a melting pot of diverse cultures. With the present technology, the distance between business locations has become virtually borderless. Different backgrounds produce different understandings of very basic concepts, like what is right and what is wrong. Simply stated, right versus wrong is the definition of ethics. The challenge for businesses, however, is finding an agreement among a diverse group of employees regarding what really defines right versus wrong. Once a good definition is achieved, an even greater task is to enforce ethical behavior in the workplace. After building a culture grounded in strong ethical behavior, good businesses give back to the societies within which they operate. Businesses first fulfill their responsibility to make a profit and then their responsibility to serve their stakeholders. Finally, businesses answer the needs of society by acting with a commitment to fairness, integrity, and respect. This goes beyond being ethical. Following this week’s discussion of ethics and social responsibility, next week we will examine entrepreneurship and business ownership. | |

Ethics| |
The early 2000s produced a number of corporate scandals among corporations considered to be the most innovative and admired companies. Companies like Enron, WorldCom, Arthur Andersen, and Tyco were dissolved or forced into bankruptcy as a result of illegal and unethical actions taken by corporate chief executive officers or chief operating officers. These illegal and unethical actions included improperly allocating accounting transactions, destroying official documents, or stealing money from the company. While it was argued that these acts attempted to improve the performance of the companies, by billions of dollars in some cases, in most cases they afforded chief executives millions of dollars of profit. To maintain the public’s trust and faith in the free-market system, it is critical to identify common standards of ethical behavior.

Ethics is “society’s accepted standard of moral behavior” (Nickels, McHugh & McHugh, 2010, p. 92). It is society’s definition of behavior that is right over behavior that is wrong. Ethics includes standards of moral behavior, and businesses work hard to define these standards. In so doing, they attempt to answer three questions when deciding whether an action is ethical: * Is it legal?

* Does it violate any law or company policy?
* Is it balanced?
* Am I being fair?
* Will my decision be win-win or win-lose?
* Would I want to be treated this way?
* Does my decision try to benefit all parties?
* How will it make me feel about myself?
* Will I be embarrassed if my family, friends, or colleagues find out? * Can I discuss this with my supervisor?
* Will I have to keep my decision a secret?
* Will I feel good about the decision? (Nickels, McHugh & McHugh, 2010, p 94) Test your ability to resolve ethical dilemmas through the Ethics Interactive Exercise below. Ethics Interactive QuizClick on the link above to review the interactive Quiz. The Quiz will open in a new window. Few of the slides in this video have audio, so make sure you are on a computer with audio capabilities. The Quiz part of the video has no audio. You can review the quiz as many times as you like.Click here for the Transcript| |

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Code of Ethics| |
Creating standards for ethical behavior often begins with a code of ethics. Companies develop a code of ethics to guide their actions and to establish a common definition of right versus wrong. A code of ethics is a guide for acceptable behavior. There are two categories of codes of ethics: compliance-based and integrity-based. Compliance-based ethics codes focus on preventing unlawful...
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