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CHAPTER

Demonstrating
Ethical
Behavior
and Social
Responsibility

Nickels

McHugh

McGraw-Hill/Irwin
Understanding Business, 8e

McHugh
1-1

4-1

2008 The McGraw-Hill Companies, Inc., All Rights

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Ethics
More Than Legality
Standards are

Ethics begins with each

of us
Fundamental

4-2

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Top U.S. Ethical Issues

Source: CMO Magazine, October 2004

4-3

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Ways to Prevent
Unethical Behavior

Source: CMO Magazine, Oct. 2004

4-4

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Privacy Protectors
Based on a Privacy Trust Score (PTS):
Health care providers scored the highest
Grocery Stores and Department of
Homeland Security (DHS) scored the
lowest
Democrats have higher PTS than all
other political affiliations
81% of the respondents feel privacy is
important or very important
Source: www.darwinmag.com, November 2003

4-5

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Ethics of MBA Students

Percent of MBA Students Who Would:

Buy Stock on Inside Information

52%

Reveal Corp. Secrets to Spouse/Family

50%

Let a Gift Sway Purchasing Decision

26%

Pay Someone Off to Close a

13%

Business Deal
Source: USA Today

4-6

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Most Popular Ways to

Monitor Employees

Internet (74%)
Background Exams (62%)
Store and Review Email (43%)
Store and Review Computer Files (31%)
Videotape Employees (18%)
Source: USA Today

4-7

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Ethics Check Questions:

Is It Legal?
Is It Balanced?
How Will It Make Me Feel About
Myself?
4-8

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Why Dont We
Trust Corporations?

Source: USA Today

4-9

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Factors Influencing
Managerial Ethics
Organizational

Environmental

Values
Work

Top Level Mgmt.

Philosophy

Competition

Background
Family Status

The Firms
Reward System

Personality

Job Dimensions

Individual

Economic
Conditions
Social/Cultural
Institutions

4-10

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Codes of Ethics

Compliance-Based
Integrity-Based

4-11

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Steps to Improve
U.S. Business Ethics

1.Top management support

2.Employees understanding
3.Managers training
4.Ethics Office
5.Outsiders must be informed
6.Enforcement of ethics code
4-12

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Levels of Corporate
Social Responsibility
Societal Responsibility
Stakeholder Responsibility
Ecological
General

Customers Profit

Profit Responsibility

Environment

Owners/Stockholders Employees

Public

Suppliers/Distributors
Public Interest Groups

Source: Marketing,
Marketing, 5/E by Berkowitz, Kerin, Hartley, and Rudelius.

4-13

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Corporate Responsibility

(Percent of countrys top 100 companies that publish

separate CR reports)

Source: Financial Times, June 15, 2005

4-14

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Social Audit

Company
Outside Groups that serve
as watchdogs:

Socially-Conscious
Investors
Environmentalists
Union Officials
Customers

4-15

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International Ethics
and Social Responsibility

Ethical problems are Not Unique to

the U.S. managers

Demand for Socially Responsible

Behavior from Global Suppliers

Joint Initiative on Corporate

Accountability and Workers Rights

Inter-American Convention Against

Corruption
4-16

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Best Company Reputation

Johnson & Johnson (80.6)

Coca-Cola (79.7)
Google (79.5)
UPS (79.4)
3M (78.8)
Source: USA Today

4-17

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Most Admired
Global Companies
1.

General Electric

6. Microsoft

2.

Toyota

7. Dell

3.

Procter & Gamble

8. Berkshire Hathaway

4.

FedEx

9. Apple Computer

5.

Johnson & Johnson

10.Wal-Mart

Source: Fortune, 2006

4-18