Chapter 2 (Ethics and SR) Flashcards
(21 cards)
Ethics
The study of right and wrong and of the morality of the choices individuals make
Business Ethics
The application of moral standards to business situations
Four Ethical Issues
- Fairness and honesty
- Organisational relationships
- Conflict of interest
- Communication
Fairness and Honesty
Businesspeople are expected to refrain from knowingly deceiving, misrepresenting, or intimidating others
Organisational relationships
A business person should put the welfare of others and that of the organisation above his or her own personal welfare
Conflict of interest
Issues arise when a businessperson takes advantage of a situation for personal gain rather than for the employer’s interest
Communications
false, misleading, or deceptive
Factors affecting ethical behaviour
- Individual Factors
- Social Factors
- Opportunity
Individual Factors
Individual knowledge of an issue
Personal values
Personal goals
Social Factors
Cultural norms
Coworkers
Significant others
Use of the Internet
Opportunity
Presence of opportunity
Ethical codes
Enforcement
Encouraging ethical behaviour
- Government’s role in encouraging ethics
- Trade association guidelines
- Individual companies
Individual Companies
- Code of Ethics
- Organisational Environment
- Whistle Blowing
Ethics in South Africa
No legislation.
The King report (currently King IV TM).
The Ethics Institute.
The South African Business Ethics Survey 2019.
Social responsibility (SR)
The recognition that business activities have an impact on society and the consideration of that impact in business decision-making.
Two View of SR
Economic Model
Socio-Economic Model
Economic Model
Society will benefit most when business is left alone to produce and market profitable products that society needs.
Managerial attitude: SR is someone else’s job; the firm’s primary responsibility is to make a profit for its shareholders.
SR is the problem of the government, environmental groups, and charitable foundations.
Socio-Economic Model
Businesses should emphasize not only profits but also the impact of their decisions on society.
The corporation is a creation of society and it must act as any responsible citizen would.
Firms take pride in their social responsibility obligations.
It is in the best interest of firms to take the initiative in social responsibility matters.
Implementing a program of social responsibility
Funding
Program
Program
Secure the commitment of top executives.
Plan the program.
Appoint top-level executive as director to implement the plan.
Prepare a social audit.
A comprehensive report – how the organisation has done and is doing with regard to social issues that affect it
Funding
Pass program costs on to consumers as higher prices.
Absorb the program costs as a business expense.
Seek tax reductions or other incentives.
