ADMS 1000 Chapter Notes - Chapter 10: Corporate Social Responsibility, Business Ethics, Liquor Control Board Of Ontario

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Chapter 10:
Societal Forces
Can Corporations Be Socially Responsible to All Stakeholders?
Learning Objectives
1. Understand the challenges of defining business ethics.
2. Explain the models for judging the ethics of a decision.
3. Discuss how organizations may contribute to unethical behaviour at work.
4. Define stakeholders and explain why they are important for business to manage.
5. Analyze the debate for and against the relevance of corporate social responsibility.
Defining Business Ethics
How do we define business ethics? What is business ethics?
While there is no universal definition of business ethics, the textbook generally defines it in a
couple of ways:
Ethics is the study of morality or moral judgments, standards, and rules of conduct.
The notion of business ethics has been considered as comprising the rules, standards, principles,
or codes giving guidelines for morally right behaviour in certain contexts.
Models for Making Ethical Decisions
1. Utilitarian or End-point Ethics
To determine if an action is right or wrong, one must examine the “end result” or “likely
consequences” of an action:
Tangible economic outcomes (shareholder profit)
Intangible outcomes (happiness or friendship)
2. Utilitarian or End-point Ethics
Must achieve the “greatest amount of good for the greatest number of people.”
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If achieved, then the action is “ethical.”
Auto maker Example: Cost-benefit analysis
legal costs and damages due to lost lives in car accidents versus costs of car
recalls with faulty parts.
Limitations:
The difficulty in estimating or measuring relative benefits and costs to all stakeholders
affected.
The “process” or means to achieve the results is ignored.
3. Rule Ethics
An action is “ethical” based on:
Rules and principles that guide behaviour;
Religious beliefs on what is morally right versus wrong; and
What is morally acceptable to the larger community?
Limitations
Cannot be applied universally.
Obligations may override ethics.
Rules may not be applied consistently to our professional versus personal lives.
Think Pair Share:
Is privatizing the LCBO an ethical decision? Use “end-point ethics” and “rule ethics” to
consider answering this question.
Ethics at Work
Do organizations make us unethical?
Ethics at Work
Factors affecting Decisions to Engage in Ethical or Unethical Behaviour:
1. Corporate Culture
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