Chapter 5 Business Ethics and Social Responsibility. (Business Ethics) pdf

Business Ethics

1. Business Ethics and Social
Responsibility
Business Ethics
Abdulahi Abukar “ ABAJEY”

2. INTRODUCTION
Abdulahi Abukar “ ABAJEY”

3. Business Ethics and Social Responsibility
Manyexpertsagreethatethicalleadership,ethicalvalues,and
complianceareimportantincreatinggoodbusinessethics.
Manyconsumersandsocialadvocatesbelievethatbusinesses
shouldnotonlymakeaprofitbutalsoconsiderthesocial
implicationsoftheiractivities.
WedefineSocialresponsibility
Businessethicsrelatestoanindividual’sora
workgroup’sdecisionsthatsocietyevaluatesasrightorwrong,
whereassocialresponsibilityisabroaderconceptthatconcerns
theimpactoftheentirebusiness’sactivitiesonsociety.
Abdulahi Abukar “ ABAJEY”

4. Firmsthatembracecorporatesocial
responsibilityare typically
organizedinamannerthat
empowersthemtobeandactina
sociallyresponsiblewaytohavea
positiveimpactontheworld.
WHAT IS Business/CORPORATE SOCIAL
RESPONSIBILITY (CSR)?
Businesssocialresponsibilityistheidea
thatabusinesshasaresponsibilitytothe
societythatexistsaroundit.
Abdulahi Abukar “ ABAJEY”

5. RecognizingEthicalIssuesin
Business
Recognizingethicalissuesisthemost
importantstepinunderstanding
businessethics.Anethicalissue
isanidentifiableproblem,situation,
oropportunitythatrequiresaperson
tochoosefromamongseveralactions
thatmaybeevaluatedasrightor
wrong,ethicalorunethical.
Inbusiness,suchachoiceoften
involvesweighingmonetaryprofit
againstwhatapersonconsiders
appropriateconduct.
Abdulahi Abukar “ ABAJEY”

6. TYPES OF BUSINESS SOCIAL RESPONSIBILITY
TheInternationalOrganizationforStandardization(ISO)
emphasizesthatabusiness’sabilitytomaintainabalancebetween
pursuingeconomicperformanceandadheringtosocietaland
environmentalissuesisacriticalfactorinoperatingefficientlyand
effectively.
Corporatesocialresponsibilityistraditionallybrokenintofour
categories:environmental,philanthropic,ethical,andeconomic
responsibility.
1.Environmentalresponsibility
Environmentalresponsibilityreferstotheanorganization’s
commitmenttosustainabilityandenvironmentallyfriendly
operations.Everyyear,morecompaniesareprioritizingsustainable
practices,pledgingtoconsidertheirenvironmentalimpactatevery
stageofbusiness.
Abdulahi Abukar “ ABAJEY”

7. 2.Ethical/Human Rights social responsibility
Ethicalresponsibilityreferstoacompany’s
commitmenttooperatetheirbusinessinan
ethicalmannerthatupholdshumanrights
principles,suchasfairtreatmentofall
stakeholders,fairtradepracticesandequal
pay.
3.Philanthropiccorporateresponsibility
Philanthropicresponsibilityreferstoa
corporation’saims,goals,andobjectives
foractivelybetteringsocietyasawhole.
Onehugeaspectofcorporatephilanthropy
isdonatingmoneyfromcompanyearnings
toworthycauseswithinthelocal
community,oftenintheformofatrustor
foundation.
Abdulahi Abukar “ ABAJEY”

8. Concern for Ethical and Societal Issues
BusinessEthics
Thestandardsofconductandmoralvaluesgoverning
actionsanddecisionsintheworkenvironment.
–Socialresponsibility.
–Balancebetweenwhat’srightandwhat’s
profitable.
–Oftennoclear-cutchoices.
–Often shaped by the
organization’s ethical climate.
Abdulahi Abukar “ ABAJEY”

9. THE ROLE OF ETHICS IN BUSINESS
Itisnotjustaltruismthatmotivatescorporationstooperatein
asociallyresponsiblemanner,butalsoconsiderationofthe
“bottom line.”
Therearegoodbusinessreasonsforastrongcommitmentto
ethicalvalues:
1.Ethicalcompanieshavebeenshowntobemoreprofitable.
2.Makingethicalchoicesresultsinlowerstressforcorporate
managersandotheremployees.
3.Ourreputation,goodorbad,endures.
4.Ethicalbehaviorenhancesleadership.
5.Thealternative
Abdulahi Abukar “ ABAJEY”

10. Ethicaldevelopment,alsoknownas
moraldevelopment,focusesonthe
emergence, change, and
understandingofmoralityfrom
earlychildhoodthroughadulthood.
Moralityiscultivatedovera
lifetime.
Development of Individual Ethics
Anindividual’sexperiencesimpacttheir
ethicaldevelopmentandhowtheyactwhen
facingmoralproblems.
Abdulahi Abukar “ ABAJEY”

11. Stage1:Preconventional
Individualismainlylookingoutforthisor
herowninterest.Rulesarefollowedonly
outoffearofpunishmentorhopeof
reward.
Stage2:Conventional
Individualconsiderstheinterestsand
expectationsofothersinmakingdecisions.
Rulesarefollowedbecauseitisapartof
belongingtothegroup.
Stage3:Postconventional
Individualfollowspersonalprinciplefor
resolvingethicaldilemmas.
HeorSheconsiderspersonal,group,and
societalinterests.
Abdulahi Abukar “ ABAJEY”

12. Individuals Make
A Difference
•Individuals can make the difference
in ethical expectations and behavior
─Putting own interest ahead of
the organization
─Lying to employee
─Misrepresenting hours
─Safety violations
─Internet Abuse
•Technology is expanding unethical
behavior
Abdulahi Abukar “ ABAJEY”

13. How Can a Company Be More Socially
Responsible?
Companiescanstartbyorganizingsmall
fundraising events, encouraging
volunteering,establishingasocialmission
andcleargoals,implementingeducation
programsforemployees,orjoiningefforts
withbusinesseswithasimilarmentality.
Eventhesmallestinitiativecanhave
animpactonacommunity.Donating
moneyorresourcestocharitiescan
makeahugedifference,although
smallcompaniesandstartupsmaynot
havetheabilitytodoso.
Abdulahi Abukar “ ABAJEY”

14. Community Support and Customer
Loyalty
Businessesthatimplementasocialresponsibility
initiativethat’sinlinewiththeirvalueshavethe
opportunitytoincreasecustomerretentionandloyalty.
Researchshowsthat87%ofAmericanconsumersare
morelikelytobuyaproductfromacompanythat
advocatesforanissuetheycareabout,and76%would
refusetopurchaseaproductiftheyfoundouta
companysupportedanissuecontrarytotheirbeliefs.
Socialresponsibilityworksasaplatform
forcompaniesandconsumersaliketo
makeapositiveimpactonlocaland
globalcommunities.
Abdulahi Abukar “ ABAJEY”

15. What Are the Benefits of
Corporate Social Responsibility?
EmbracingCorporateSocial
Responsibility (CSR)
increasescustomerretention
and loyalty,increases
employee engagement,
improvesbrandimaging,
attracts investment
opportunitiesandtoptalent,
andmakesadifferencefor
bottom-linefinancials.
Abdulahi Abukar “ ABAJEY”

16. Abdulahi Abukar “ ABAJEY”

17. Ethical Awareness
CodeofConduct
Formalstatementthatdefines
howtheorganizationexpects
andrequiresemployeesto
resolveethicalquestions.
Abdulahi Abukar “ ABAJEY”

18. Ethical Education
Codesofconductcannot
detailasolutionforevery
ethicalsituation,so
corporations provide
traininginethicalreasoning.
Abdulahi Abukar “ ABAJEY”

19. Ethical Action
Helping employees
recognizeandreason
throughethicalproblems
andturningtheminto
ethicalactions.
Ethical
Leadership
Executivesmust
demonstrateethical
behaviorintheir
actions.
Abdulahi Abukar “ ABAJEY”

20. KEY TAKEAWAYS
•Socialresponsibilitymeansthatbesides
maximizingshareholdervalue,businesses
shouldoperateinawaythatbenefitssociety.
•Sociallyresponsiblecompaniesshouldadopt
policiesthatpromotethewell-beingofsociety
andtheenvironmentwhilelesseningnegative
impactsonthem.
•Companiescanactresponsiblyinmanyways,
suchasbypromotingvolunteering,making
changesthatbenefittheenvironment,
engaginginethicallaborpractices,and
engagingincharitablegiving.
•Consumersaremoreactivelylookingtobuy
goodsandservicesfromsociallyresponsible
companies,henceimpactingtheirprofitability.
•Criticsassertthatpracticingsocial
responsibilityistheoppositeofwhy
businessesexist
Abdulahi Abukar “ ABAJEY”

21. THANK YOU!
[email protected]
ABAJEY
Abdulahi Abukar “ ABAJEY”