How To Learn About The Importance Of Business Ethics In Only 10 Days. Marcellous Curtis
WHY STUDY BUSINESS ETHICS? Business decisions under great scrutiny Global nancial crisis created diminished stakeholder trust
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No universally-accepted approach for resolving issues
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Deals with questions about whether practices are acceptable
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BUSINESS ETHICS Comprises principles, values, and standards that guide behavior in the world of business
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A CRISIS IN BUSINESS ETHICS No sector is exempt from ethical misconduct
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Stakeholders determine what is ethical/unethical
Interest groups
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Legal system
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Community
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Customers
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Employees
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Investors
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Consumer trust of businesses is declining
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BEFORE 1960: ETHICS IN BUSINESS Theological discussions of ethics emerged ➤
Catholic social ethics included a concern for morality in business, workers’ rights and living wages
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Protestants developed ethics courses in their seminaries and schools of theology
Protestant work ethic encouraged hard work
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THE 1960S: THE RISE OF SOCIAL ISSUES IN BUSINESS Societal social consciousness emerged ➤
A new era of consumerism ➤
Consumer protection groups fought for consumer protection legislation
Source: Hisham Ibrahim
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Right to safety, to be informed, to choose, and to be heard
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Anti-business sentiment rose
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THE 1970S: BUSINESS ETHICS AS AN EMERGING FIELD Business professors began to write about social responsibility An organization’s obligation to maximize positive impact and minimize negative impact on stakeholders
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Businesses became concerned with public image
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Issues: – Product safety
– Environment
Price collusion
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Deceptive advertising
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Bribery
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THE 1980S: CONSOLIDATION •
Membership in business ethics organizations increased
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Ethics centers provided:
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Corporate support for ethics
Firms established ethics committees
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courses, conferences and seminars
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THE 1990S: INSTITUTIONALIZATION OF BUSINESS ETHICS Preventative actions against misconduct ➤
A company could avoid/minimize potential penalties
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ETHICS CONTRIBUTES TO EMPLOYEE COMMITMENT
Are willing to make personal sacri ces for the organization
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Concerns include a safe work environment, competitive salaries and bene t packages, and ful llment of contractual obligations
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The more dedication on the part of the company, the greater the employee dedication
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Comes from employees who believe their future is tied to the organization’s
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ETHICS CONTRIBUTES TO INVESTOR LOYALTY
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Productivity
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Pro tability
E ciency
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Ethical climates in organizations provide platform for:
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Companies perceived by their employees as having a high level of honesty and integrity are more pro table than companies with a low level of honesty and integrity
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ETHICS CONTRIBUTES TO CUSTOMER SATISFACTION Consumers respond positively to socially concerned businesses ➤
Research shows a strong relationship between ethical behavior and customer satisfaction
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A strong organizational ethical climate places customers’ interests rst
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Customer satisfaction dictates business success
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Being good can be extremely pro table
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ETHICS CONTRIBUTES TO PROFITS Corporate concern for ethical conduct is being integrated with strategic planning ➤
Corporate citizenship is positively associated with: ➤ ➤
Source: PhotoLink
Sales growth
Studies have found a positive relationship between citizenship and performance fi
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Return on investment and assets
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Maximize pro tability
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Thank You