chapter 3

stakeholders include

- employees - customers - suppliers - the community in which the corporation operates

Some types of CSR activities that businesses are engaging in today include:

- environmental efforts - ethical labor practices - charitable donations - volunteer work

the IDDR approach

1. Inquiry 2. Discussion 3. Decision 4. Review

Four Part Analysis:

1. The legal implications of each decision 2. The public relations impact 3. The safety risks for consumers and employees 4. The financial implications

two categories of ethics

1. duty-based 2. outcome-based ethics

ethical reasoning

A reasoning process in which an individual links his or her moral convictions or ethical standards to the particular situation at hand.

utilitarianism

An approach to ethical reasoning in which an action is evaluated in terms of its consequences for those whom it will affect. A "good" action is one that results in the greatest good for the greatest number of people.

categorical imperative

An ethical guideline developed by Immanuel Kant under which an action is evaluated in terms of what would happen if everybody else in the same situation, or category, acted the same way.

duty-based ethics

An ethical philosophy rooted in the idea that every person has certain duties to others, including both humans and the planet. Those duties may be derived from religious principles or from other philosophical reasoning.

outcome-based ethics

An ethical philosophy that focuses on the impacts of a decision on society or on key stakeholders.

Corporate Aspects of CSR

Arguably, any socially responsible activity will benefit a corporation. Benefits can include: •An increase in goodwill from the local community •An increase in sales •Higher employee At times, the benefit may not be immediate

fostering of unethical conduct

Business owners and managers sometimes take more active roles in fostering unethical and illegal conduct, with negative consequences for their businesses.

The Social Aspects of CSR

Businesses have a responsibility to use that wealth and power in socially beneficial ways: -Promotion of goals that society deems worthwhile. -Movement toward solutions to social problems.

business ethics

Ethics in a business context; a consensus of what constitutes right or wrong behavior in the world of business and the application of moral principles to situations that arise in a business setting.

ethics has to do with an action's

Fairness, Justness, Rightness, Wrongness

categorical imperative

In deciding whether an action is right or wrong, or desirable or undesirable, a person should evaluate the action in terms of what would happen if everybody else in the same situation, or category, acted the same way.

problems with the utilitarian approach

In some situations, an action that produces the greatest good for the most people may not be the most ethical.

Business as a Pure Profit Maximizer

In theory, if all firms strictly adhere to the goal of profit maximization, resources flow to where they are most highly valued by society. In an ideal world, profit maximization leads to the most efficient allocation of scarce resources.

gray areas in the law

Laws cannot codify all ethical requirements. For a number of reasons, laws may some-times be difficult to interpret and apply.

unrealistic goals for employees

Managers who set unrealistic production or sales goals increase the probability that employees will act unethically.

attitude of top management

One of the most important ways to create and maintain an ethical workplace is for top management to demonstrate its commitment to ethical decision making. Top management's behavior sets the ethical tone of a firm.

moral minimum

The minimum degree of ethical behavior expected of a business firm, which is usually defined as compliance with the law.

principle of rights

The principle that human beings have certain fundamental rights (to life, freedom, and the pursuit of happiness, for example).

wages and working conditions

U.S. businesses may hire contractors in developing nations that engage in unethical behavior at their worksites.

corporate watch groups

a company's actions in other nations can be discovered and publicized by "corporate watch" groups

the foreign corrupt practices act

a law that prohibits U.S. corporations from making illegal payments to public officials of foreign governments to obtain business rights or to enhance their business dealings in those countries

cost-benefit analysis

a study that compares the costs and benefits to society of providing a public good

private company codes of ethics

company codes are not laws

duty-based ethics

focuses on performing one's duty to various people and institutions

outcome-based ethics

focuses on the impacts of a decision on society or on key stakeholders

stakeholders

groups that have a stake in the success and outcomes of a business

ethics

moral principles and values applied to social behavior

industry ethical codes

numerous industries have developed codes of ethics

triple bottom line

people, planet, profit

corporate social responsibility (CSR)

the concept that corporations can and should act ethically and be accountable to society for their actions

corporate social responsibility

the notion that corporations are expected to go above and beyond following the law and making a profit

outsourcing

the practice by which a company hires an outside firm or individual to perform work rather than hiring employees