Ethics and Social Responsibility

ETHICS AND SOCIAL RESPONSIBILITY

Ethics - the moral principles and values that govern the actions and decisions of an individual or group.

Ethics are different from laws.

Laws - society’s standards and values that are enforceable in court.

Three factors typically influence a business person’s ethical decisions:

1. Societal Culture

2. Business Culture

3. Corporate Culture

SOCIETAL CULTURE - values, ideas and attitudes that are learned and shared among members of a group.

BUSINESS CULTURE - codes of conduct expected in business dealings in a particular industry.

Prior to 1960 business people believed in the concept of caveat emptor - let the buyer beware.

In 1962 the consumer bill of rights was passed which codified the “ethics of exchange” between buyers and sellers, including the consumer’s right to safety, to be informed, to choose and to be heard.

CORPORATE CULTURE - shared values, beliefs and purpose of employees that affect individual and group behavior in a single organization. Often these standards are formalized in a Mission Statement or in a Code of Ethics.

Code of Ethics - a formal statement of ethical principles and rules of conduct.

Employees who report the unethical or illegal actions of their employers are called Whistle-blowers.

MORAL PHILOSOPHIES

1. Moral Idealism

2. Utilitarianism

Moral Idealism - considers certain individual rights or duties as universal, regardless of the outcome.

Utilitarianism - focuses on the greatest good for the greatest number of people, assesses the costs and benefits of behavior.

Concepts:

Social Responsibility - the idea that organizations are part of a larger society and are accountable to that society for their actions.

Green Marketing - marketing efforts to produce, promote and reclaim environmentally sensitive products.

Cause Marketing - tying the charitable contributions of a firm directly to the sales produced through the promotion of one of its products.