Ferrel
chapter
2
Business Ethics and Social Responsibility
OBJECTIVES
After reading this chapter, you will be able to: • Define business ethics and social responsibility and examine their importance. • Detect some of the ethical issues that may arise in business. • Specify how businesses can promote ethical behavior. • Explain the four dimensions of social responsibility. • Debate an organization’s social responsibilities to owners, employees, consumers, the environment, and the community. • Evaluate the ethics of a business’s decision.
CHAPTER OUTLINE
Introduction Business Ethics and Social Responsibility The Role of Ethics in Business
Recognizing Ethical Issues in Business Making Decisions about Ethical Issues Improving Ethical Behavior in Business
The Nature of Social Responsibility
Social Responsibility Issues
Ethisphere Links Ethics to Profits
Ethisphere magazine (www.ethisphere.com) is published by the Ethisphere Institute to illuminate the correlation between ethics and profits. Their mission is to “help corporate executives guide their enterprises toward gaining market share and creating sustainable competitive advantage through better business practices and corporate citizenship.” Business has found that good ethics doesn’t happen automatically. Employees need a shared vision that results in all employees abiding by the company’s code of ethics and policies on business conduct. The editors and writers for the magazine attempt to determine absolute behaviors that can be utilized to differentiate one organization from another. For example, Ethisphere has developed a methodology to examine companies’ codes of ethics and provide a grade for how the business compares with others. Issues relate to how the code itself is written, what it contains, what it omits, and how it is communicated. All play instrumental underlying roles in whether the code has the power to influence not only perceptions, but actions as well. For example, Centex Corp. received
2
Business Ethics and Social Responsibility
OBJECTIVES
After reading this chapter, you will be able to: • Define business ethics and social responsibility and examine their importance. • Detect some of the ethical issues that may arise in business. • Specify how businesses can promote ethical behavior. • Explain the four dimensions of social responsibility. • Debate an organization’s social responsibilities to owners, employees, consumers, the environment, and the community. • Evaluate the ethics of a business’s decision.
CHAPTER OUTLINE
Introduction Business Ethics and Social Responsibility The Role of Ethics in Business
Recognizing Ethical Issues in Business Making Decisions about Ethical Issues Improving Ethical Behavior in Business
The Nature of Social Responsibility
Social Responsibility Issues
Ethisphere Links Ethics to Profits
Ethisphere magazine (www.ethisphere.com) is published by the Ethisphere Institute to illuminate the correlation between ethics and profits. Their mission is to “help corporate executives guide their enterprises toward gaining market share and creating sustainable competitive advantage through better business practices and corporate citizenship.” Business has found that good ethics doesn’t happen automatically. Employees need a shared vision that results in all employees abiding by the company’s code of ethics and policies on business conduct. The editors and writers for the magazine attempt to determine absolute behaviors that can be utilized to differentiate one organization from another. For example, Ethisphere has developed a methodology to examine companies’ codes of ethics and provide a grade for how the business compares with others. Issues relate to how the code itself is written, what it contains, what it omits, and how it is communicated. All play instrumental underlying roles in whether the code has the power to influence not only perceptions, but actions as well. For example, Centex Corp. received