Intro to Business, Chapter 4
Corporate social responsibility
A business's concern for the welfare of society
How are a company's social responsibility efforts measured?
A corporate social audit measures n organization's progress toward social responsibility. Some people believe the audit should add together the organization's positive actions and hen subtract the negative effects to get a net social benefit.
Social audit
A systematic evaluation of an organization's progress toward implementing socially responsible and responsive programs
Insider trading
An unethical activity in which insiders use rivals company information to further their own fortune or those of their family and friends
How doe businesses demonstrate corporate responsibility toward stakeholders?
Businesses demonstrate responsibility to stakeholders by 1. Satisfying customers with goods and services of real value; 2. Making money for investors; 3. Creating jobs for employees, maintaining job security, and seeing that hard work and talent are fairly rewarded; and 4. Creating new wealth for society, promoting social justice, and contributing to making the businesses own environment a better place
What is corporate social responsibility?
Corporate social responsibility is the concern businesses have for society
Corporate social initiatives
Enhanced forms of corporate philanthropy directly related to the company's competencies
Integrity-based ethics codes
Ethical standard that define the organizations guiding values, create an environment that supports ethically sound behavior, and stress a shared accountability among employees.
Compliance-based ethics codes
Ethical standards that emphasize in preventing unlawful behavior by increasing control and by penalizing wrongdoers.
How is legality different from ethics?
Ethics goes beyond obeying laws to include abiding by the moral standards accepted by society. Ethics reflects people's proper relationships with one another. legality is more limiting; it refers only to laws written to protect people from fraud, theft, and violence
Whistleblowers
Insiders who report illegal or unethical behavior.
How can U.S. companies influence ethical behavior a social responsibility in global markets?
Many U.S. businesses are demanding socially responsible behavior from their international suppliers by making sure their suppliers do not violate U.S. human rights and environmental standards. Companies such as Sears, PVH, and Dow Chemical will not import products from companies that do not meet their ethical and social responsibility standards.
Ethics
Standards of moral behavior, that is, behavior accepted by society as right versus wrong
Corporate philanthropy
The dimension of social responsibility that includes charitable donations
Corporate responsibility
The dimension of social responsibility that includes everything from hiring minority's workers to making safe products
Corporate policy
The dimension of social responsibility that refers to the position a firm take on social and political issues
How can we tell if our business decisions are ethical?
We can put our business decisions through an ethics check by asking three questions: 1. Is it legal? 2. Is it balanced? 3. How will it make me feel
What's the difference between compliance-based and integrity-based ethics codes?
Whereas compliance-based ethics codes are concerned with avoiding legal punishment, integrity-based codes define he organization's guiding values, create an environment that supports ethically sound behavior, and stress a shared accountability among employees.
What is management's role in setting ethical standards?
managers often set formal ethical standards, but more important are the messages they send through their actions. Management's tolerance or intolerance of ethical misconduct influences employees more than any written ethic codes.