Chapter 5: Ethics and Social Responsibility 2012-09-28 5:59 AM
• What is ethics?
• How does ethics differ from legality?
• When faced with ethical dilemmas, what questions can you ask yourself that might help
you make ethical decisions?
• How are compliance-based ethics codes different from integrity -based ethics codes?
• What are the 6 steps to follow in establishing an effective ethics program in a b usiness?
• What protection is being offered to whistleblowers in the public sector?
• What is corporate social responsibility, and how does it relate to each of a business’ major
• How does the strategic approach differ from the pluralist approach ?
• What is a social audit, and what kinds of activities does it monitor?
Learning Objective #1: Explain why legality is only one step in behaving ethically
• Ethics goes beyond obeying laws. It also involves abiding by the moral standards accepted
• How is legality different from ethics?
o Ethics reflects peoples proper relation with one another. Legality is more limiting;
it refers only to laws written to protect people from fraud, theft and violence
• What influences our ethical decision making?
o Ethical behavior begins with you and me. We are influenced by our society and
what it considers to be ethical, the behavior of others (both socially and in
workplace) and by our own personal values and benefits
• How can we tell if our business decisions are ethical?
o There is no universally accepted approach when answering this question. One
suggestion is to ask yourself 3 questions: 1) is it legal 2) is it balanced and 3) how
will it make me feel? Companies and individuals that develop strong ethics codes
and use those 3 questions have a better chance than most of behaving ethically
Learning Objective #2: Describe management’s role in setting ethical standards and distinguish
between compliance-based and integrity-based ethics codes
• Some managers think that ethics is an individual issue that has nothing to do with
management, while others believe that ethics has everything to do with management
• What is management’s role in setting ethical standards?
o Managers often set form al ethical standards, but more important are the
messages they send through their actions. Management’s tolerance or intolerance
of ethical misconduct influences employees more than written ethics codes do
• What’s the difference between compliance based and integrity based ethics codes?
o Whereas compliance based ethics codes are concerned with a voiding legal
punishment, integrity based ethics codes define the organization’s guiding values,
create an environment that supports ethically sound behavior, and stress a shared
accountability among employees
Learning Objective #3: list the 6 steps that can be considered when setting up a corporate ethics
• Business ethics can be improved if companies follow a 6 step process
• What are the 6 steps that can improve b usiness ethics?
o 1) top management must adopt and support an explicit corporate code of conduct
o 2) employees must understand that expectation for ethical behavior begin at the
top and that senior management expects all employees to act accordingly
o 3) managers and others must be trained to consider the ethical implications of all