SOM 122 Chapter Notes - Chapter 2: Business Ethics, Consumerism, Price Gouging
1 Oct 2016
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SOM 122 CH. 2 Book Notes
Ethics in the workplace
●Ethics: beliefs about what’s right and wrong or good and bad
○Individual’s values and morals + social context in which is or her behavior
occurs determines ethics
○Vary from person to person
○Determined by culture as well
●Ethical Behavior: behavior that conforms to individual beliefs and social norms
about what’s right and good
●Unethical Behavior: Behavior that conforms to individual beliefs and social norms
about what is defined as wrong and bad
○Laws created to reflect ethical standards
●Business ethics: ethical or unethical behaviors by employees and managers in the
context of their jobs
●Managerial Ethics: standards of behavior that guide individual managers in their
work
○Behavior towards employees
■Hiring and firing
■Wages
■Working conditions
■Privacy and respect
○Behavior toward the organization
■Conflict of interest
●When an activity may benefit the individual to the detriment of
his or her employer
■Confidentiality
■Honesty
●Stealing supplies, calling in sick for no reason
○Behavior toward other economic agents
■Primary agents of interest: mainly customers, competitors,
stockholders, suppliers, dealers and unions
■Pharmaceutical companies- criticized
■Global variations in business practices
Assessing ethical behavior
1. Gather the relevant factual information
2. Analyze the facts to determine the most appropriate moral values
3. Make an ethical judgement based on the rightness or wrongness of the proposed
activity or policy
find more resources at oneclass.com
find more resources at oneclass.com
●Ethical norms and the issues they entail
○Utility: does a particular act optimize the benefits to those who are affected
by it? (That is, do all relevant parties receive “fair” benefits)
○Rights: does it respect the rights of all individuals involved?
○Justice: is it consistent with what’s fair?
○Caring: Is it consistent with people’s responsibilities to each other?
●Approaches to formalizing top management commitment:
○Adopting written code
■Announce commitment to do business in an ethical manner
■Ex: we have trust and respect for individuals, focus on high level of
achievement and contribution
○Instituting Ethics Programs
Social responsibility
●Social responsibility: the attempt of a business to balance its commitments to
groups and individuals in its environment, including customers, other businesses,
employees, investors, and local communities
●Organizational Stakeholders: those groups, individuals, and organizations that are
directly affected by the practices of an organization and who therefore have a stake
in its performance
●Companies who strive to be responsible to stakeholders focus on 5 main groups:
○Customers
○Employees
○Investors
○Suppliers
○Local communities
Areas of Social Responsibility
●Environment
○Climate change
○Pollution
■Water
■Land
■Air
○Toxic waste disposal
○Recycling
●Customers
○Consumerism: form of social activism dedicated to protecting the rights of
consumers in their dealings with businesses
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
Ethics: beliefs about what"s right and wrong or good and bad. Individual"s values and morals + social context in which is or her behavior occurs determines ethics. Ethical behavior: behavior that conforms to individual beliefs and social norms about what"s right and good. Unethical behavior: behavior that conforms to individual beliefs and social norms about what is defined as wrong and bad. Business ethics: ethical or unethical behaviors by employees and managers in the context of their jobs. Managerial ethics: standards of behavior that guide individual managers in their work. When an activity may benefit the individual to the detriment of his or her employer. Stealing supplies, calling in sick for no reason. Primary agents of interest: mainly customers, competitors, stockholders, suppliers, dealers and unions. Assessing ethical behavior: gather the relevant factual information, analyze the facts to determine the most appropriate moral values, make an ethical judgement based on the rightness or wrongness of the proposed activity or policy.
