BUS 201 Chapter Notes - Chapter 3: Corporate Social Responsibility, Business Ethics, Consumerism

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BUS 201 – Ch.3
LO 1 – Explain how indivs dvlp their personal codes of ethics and why ethics
are important in the workplace.
- ethics = indiv standards or moral values on what is right/wrong or good/bad
- business ethics = ethical/unethical behaviours by a manger or employee of an org
- unethical vs illegal
- practices that are legal in one country may not be legal in another  complications
- ethics both personally & culturally defined, indivs can rationalize almost any
behaviour as ethical
- managerial ethics = standards of behaviour that guide indiv managers at work
 behaviour toward employees: hiring/firing, wages/working conditions,
privacy
 behaviour toward org: conflict of interest (activity benefits employee at
expense of employer)
 behaviour toward other econ agents: bribes, ultimatums
- how to determine whether ethical: 1) gather relevant factual info
2) determine most appropriate moral values
3) make ethical judgment based on
right/wrong of proposed activity/policy
- 4 ethical norms:
 utility: Does a particular act optimize what is best for those affected by it?
 rights: Does it respect the rights of indivs involved?
 justice: Is it consistent with what we regard to be fair?
 caring: Is it consistent with people’s responsibilities to each other?
- why unethical behaviours occur:
 pressure: employee has problem cannot be solved thru legitimate means
 opportunity: employee uses position in org to secretly solve problem
 rationalization: employee is ethical person in unfortunate situation
- SOLUTIONS:
1. top management must demonstrate serious public commitment to high ethical
standards
 w/o this, lower level employees not likely to take ethics very seriously
2. adopt written code of ethics increases public confidence in company, improves
internal operations, helps managers respond on occasions when there are problems
with illegal or unethical employee behaviour
3. provide ethics training to educate employees about ethics
LO 2 – Distinguish ethics from social responsibility and identify organizational
stakeholders.
- corporate social responsibility (CSR) = idea that business should balance its
commitments to organizational stakeholders (indivs & groups that are directly
affected by org’s activities)
- managerial capitalism = company’s only resp is to make as much $ for
shareholders w/o breaking any laws
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