chapter 1 ethics in business
Ethical culture
Organizational principles, values, and norms that are adhered to by the company and its personnel.
Business ethics
Organizational principles, values, and norms that may originate from individuals, organizational statements, or from the legal system that primarily guide individual and group behavior in business
Morals
Personal philosophies that define right and wrong.
Ethics Contributes to Investor Loyalty
Provides a foundation for efficiency, productivity, and profits.•Negative publicity, lawsuits, and fines can lower stock prices, diminish customer loyalty, and threaten a company's long-term viability.•Demand for socially responsible investing is increasing.
Sustainability
Relates specifically to the environment (air, land, and water)
Reagan-Bush Era
Self-regulation rather than regulation by government was in the public's interest.
federal Sentencing Guidelines for Organizations (FSGO)
Set the tone for organizational ethical compliance programs.
Principles
Specific boundaries for behavior that often become the basis for rules
Value dilemma
Two or more beliefs/ideals in conflict with one another.
Moral dilemma
Two or more morals in conflict with one another.
Ethics Contributes to Profits
etter business performance.•Part of strategic planning toward obtaining the outcome of higher profitability.•Business ethics is becoming more than just a function of compliance; It's becoming an integral part of management's efforts to achieve competitive advantage.
Corporate social responsibility
Actions associated by firms with various stakeholder (other than investors) interests as a priority.
Values
Enduring beliefs and ideals that are socially enforced
Bottom Line for Business Ethics
Firm survival Profitability revenues sales Stakeholders Contribute to societal goals
Defense Industry Initiative on Business Ethics and Conduct (DII
was developed to guide corporate support for ethical conduct.
Ethics Contributes to Customer Satisfaction
High levels of perceived corporate misconduct decreases customer trust. Companies viewed as socially responsible increase customer trust and satisfaction. Consumer respondents stated they would pay more for products from companies that give back to society in a socially responsible and sustainable manner.
