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6th Lecture - Ethics and Corporate Social Responsibility

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Dave Swanston

Chapter 6Ethics and Corporate Social Responsibility page 122147 Lecture 6 In the past managers have followed one rule in making business decisions make the most money possible Companies that did things the fastest and the cheapest were the industry leaders Everyone wanted to be on top taking nothing into account except for profitWhat happens when profit comes at the expense of the environment social wellbeing or even somebodys life Transparency in the media has shown us the consequence of business without ethics global warming impoverished communities and just two years ago the biggest financial crisis in history Companies have the responsibility to the well being and sustainability of all their stakeholdersnot just their shareholders They have the responsibility to instigate change for the betterTheres a virtuous cycle in which all of us operate in order to survive what we take we must give backFurther instead of being a hindrance to profitability ethical business has actually become good business Consumers today demand socially responsible initiatives from most if not all companieswhether it be through fair trade practices or the preservation of human rights Companies centered on corporate social responsibility are actually thriving in todays business environment And what has happened to companies like Nortel Enron and Lehman Brothers Society has doled out its justiceEthics in ManagementEthics is a reflection of the moral principles or beliefs about what an individual views as being right or wrongPonzi Scheme a type of investment fraud that involves the payment of purported returns to existing investorsfunds contributed by new investors from Examples of federal felonies include securities fraud investment adviser fraud money laundering theft from an employee benefit plan falsifying SEC filings perjury associated with the Ponzi scheme and records falsification and the misrepresentation of results Also charities like the Orion Foundation that misused donations for personal gainsThese types of situations are not limited to the private sector both government and the notforprofit sector have had their challenges Why are we seeing and hearing about such brash dismissals of what we in general define as unethical behaviorTo answer this question we need to assess ethics within an organization at two levels 1The individuals themselves2The culture of the organization within which individuals work1Ethics and the individualEthical beliefs are built in part around the norms or standards of conduct society views as acceptable behavioral practices In many ways ethics can be thought of as an invisible hand that guides each of us as we make decisions The problem lies in the differences of peopleIndividual motivations cultural and environmental upbringing personal pressures and lack of information or ignorance will all influence positively or negativelyan individuals ethical behavior
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