CHAP 3 Flashcards
The concept of ethical behavior
Ethics are the standards of behavior by which conduct is judged. Standards that are legal may not always be ethical, and vice versa. No laws are broken, but the notions of fairness and justice are offended by one individual putting himself or herself above others and taking advantage of others’ time and position. Ethics basically constitute the unwritten rules developed to guide interactions. Many ethical questions arise from balancing a business’s need to produce profit for shareholders against its desire to operate honestly and with concern for environmental and social issues.
Ethical behavior in business
Many companies develop a code of ethics to help their employees make ethical decisions. A code of ethics can help employees identify acceptable business practices, help employees avoid confusion when determining whether decisions are ethical, and facilitate discussion about what is right and wrong and ultimately leads to better
decisions.
Corporate social responsibility
Corporate social responsibility (CSR) is a business’s concern for society’s welfare. Stakeholder theory says that social responsibility means paying attention to the interest of every affected stakeholder in every aspect of a firm’s operation, including employees, management, customers, the local community, suppliers, and owners. According to the pyramid of corporate social responsibility, CSR has four components: economic, legal, ethical, and philanthropic.
arguments for and against social responsibility
Most businesspeople believe they should do more than pursue profits. Sustainability is the concept that socially responsible companies will outperform their peers by focusing on the world’s social problems and viewing them as an opportunity to earn profits and help the world at the same time. Social responsibility is growing. One branch of social responsibility is green marketing, which aids the environment and often the bottom line of a business.
Cause-related marketing
Cause-related marketing is the cooperative effort between a for-profit firm and a nonprofit organization for mutual benefit. It is different from philanthropy, which is a specific, tax-deductible donation.
