chapter one The Importance of Business E thics The Importance of Business Ethics M ain E lements Business ethics defined Why study business ethics The development of business ethics ID: 468024
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Slide1
Business ethicschapter one
The Importance of Business
E
thics Slide2
The Importance of Business Ethics Main E
lements
Business ethics defined
Why study business ethics?
The development of business ethics
Developing an organizational and global ethical culture
The benefits of business ethics
SummarySlide3
The Importance of Business Ethics
Introduction
Next class you need to read and discuss “an ethical dilemma in chapter one. And
Monsanto attempts to balance stakeholder’s interests
case study.
We did this introduction last timeSlide4
Business ethics defined
An inquiry into the nature and grounds of morality where the term morality means moral judgment, standards, and rules of conduct.
Also, the study of human conduct
In summary
business ethics
comprises the principles, values, and standards that guide behavior in the world of business.
Principles:
values are specific boundaries for behavior that are universal and absolute.
Values:
are used to develop norms that are socially enforced like integrity, trust and credibility.
Slide5
Why Study Business Ethics?
Customers’ declining trust is a big issue.
See Check figure 1-1
Examples and specific issues:
Abusive behavior
Harassment
Bully
Accounting fraud
Conflict of interest
Defective products
Bribery
And theft
Are all examples of declining ethical standards.
Check the story of
Johnson&Johnson
Slide6
Why Study Business Ethics?
Insider trading is a serious issue in business and ethics. Getting inside information and using it to ones’ own interest.
We call it corruption
Code of ethics
Gifts , discrimination acts, injustice.
Falsification, deception and forgery, in sports (drug)
Universities, schools, research, publications
And many, many other aspects. Slide7
The reason for studying business ethics
Studying business ethics is an awareness program. It gives you the awareness to recognize right from wrong. You may identify ethical issues when they arise and use the approaches available for resolving them. You will also learn more about the ethical decision making process and about ways to promote ethical behavior within your org. you will be able to cope with conflicts between your own personal values and those of the org in which you work. Slide8
The development of business ethics
Check table 1-2 and see for yourself
Slide9
Developing an organizational and global ethical culture
Its hard to develop a global ethical culture. why?
But its very important to create certain regulations, I mean governmental rules and regulations beside organizational ones in order to have an ethical culture. Slide10
The Benefits of Business E
thics
1- employee commitment
2- investor loyalty
3-customer satisfaction
These three within an ethical culture will lead to:
4- ethics contribute to profit. Slide11
Stakeholder relationships, social responsibility, and corporate governance chapter two
Chapter’s main elements:
Stakeholders define ethical issues in business
Social responsibility and the importance of a stakeholder orientation
Social responsibility and ethics (
Corporate Social
Responsibility).
Corporate governance provides formalized responsibility to stakeholders
Implementing a stakeholder perspectiveSlide12
Stakeholders define ethical issues in business
The relationship between companies and their stakeholders is two-way communication. What this statement means?
The conclusion of this point is that companies need to reconsider its relationship with all the surrounding parties and constituencies in the societySlide13
Identifying your stakeholders
1- primary stakeholders
2- secondary stakeholders
Explain figure 2-2- what do the arrows represent in the figure.Slide14
Social responsibility and the importance of stakeholder orientation
What is meant by stakeholder’s orientation?
What about classical theory
vs
modern theory?
Conclusion: ethics and social responsibility cannot be just a reactive approach to issues as they arise.
Firms and corporations need to view ethical concerns as a part of their foundation and incorporate ethics in their business strategySlide15
Social responsibility and ethics
SR and Ethics are interchangeable.
Socially responsible orgs are more ethical entities than others.
ISO 26000 for CSR
ISO 1400 for the environment
ISO 1800 for health and safety!
Going green- many companies are going green
Renewable energy investments. Example the wind and the solar energy. Slide16
Social responsibility and ethics
What is corporate Citizenship?
The extent to which businesses strategically meet the economic, legal, ethical, and philanthropic responsibilities placed on them by their various stakeholders.
What is reputation and why is it important in this context?Slide17
Corporate governance
How Corporate Governance provides formalized responsibility to stakeholders?
Two views of corporate governance:
A- shareholder model of Corporate Governance
B- stakeholder model of Corporate Governance
The role of boards of directors
Greater demand for accountability and transparency
Executive compensation Slide18
Implementing a stakeholder perspective
1- assessing the corporate culture
To implement the stakeholder’s perspective, you need to have it in your mission, norms, values and system. You need to have a visionary leadership. Your culture must support it.
2- identifying stakeholder groups
Some stakeholders exert more influence and power than others. The company must identify these groups, prioritize, and evaluate. Slide19
Implementing a stakeholder perspective
3- identifying stakeholder issues
Obesity, overweight in the US is an issue. Climate change for some companies is an issue, GM food and biotechnology for Monsanto is an issue. Carbon dioxide emission for Toyota is an issue
4- assessing org commitment to social responsibility
The previous steps lead to step four where companies could act socially responsible with accordance to their stakeholders’ issueSlide20
Implementing a stakeholder perspective
5- identifying resources and determining urgency
Resources must be specified and urgency must be considered. Resources must be quickly allocated based on that urgency. Use porter strategy.
6- gaining stakeholder feedback.
This is an information and data collection exercise here. Via public and private data mining to find out what our stakeholders think of us.
Next with chapter 3 Emerging Business Ethics Issues. Read the chapter dilemma.
Chapter 3 is a presentation chapter- an
individual task.