CHAPTER Demonstrating Ethical

* * * ** * CHAPTER Demonstrating Ethical Behavior and Social Responsibility 4 Nickels * Mc. Graw-Hill/Irwin Understanding Business, 8 e Mc. Hugh * Mc. Hugh 1© 2008 The Mc. Graw-Hill Companies, Inc. , All Rights Reserved.

* * * Ethics • More Than Legality • Standards are Fundamental • Ethics begins with each of us

* * * Top U. S. Ethical Issues Source: CMO Magazine, October 2004 3

* * * Source: CMO Magazine, Oct. 2004 Ways to Prevent Unethical Behavior

* * * Privacy Protectors Based on a Privacy Trust Score (PTS): • Health care providers scored the highest • Grocery Stores and Department of Homeland Security (DHS) scored the lowest • Democrats have higher PTS than all other political affiliations • 81% of the respondents feel privacy is important or very important Source: www. darwinmag. com, November 2003

* * * Ethics of MBA Students Percent of MBA Students Who Would: • Buy Stock on Inside Information 52% • Reveal Corp. Secrets to Spouse/Family 50% • Let a Gift Sway Purchasing Decision 26% • Pay Someone Off to Close a 13% Business Deal Source: USA Today

* * * Most Popular Ways to Monitor Employees • Internet (74%) • Background Exams (62%) • Store and Review Email (43%) • Store and Review Computer Files (31%) • Videotape Employees (18%) Source: USA Today

* * * Ethics Check Questions: • Is It Legal? • Is It Balanced? • How Will It Make Me Feel About Myself?

* * * Why Don’t We Trust Corporations? Source: USA Today

* * * Factors Influencing Managerial Ethics Individual • Values • Work Background Organizational Environmental • Top Level Mgmt. Philosophy • Competition • Family Status • The Firm’s Reward System • Personality • Job Dimensions • Economic Conditions • Social/Cultural Institutions 10

* * * Codes of Ethics • Compliance-Based • Integrity-Based 11

* * * Steps to Improve U. S. Business Ethics 1. Top management support 2. Employees’ understanding 3. Managers’ training 4. Ethics Office 5. Outsiders must be informed 6. Enforcement of ethics code 12

* * * Levels of Corporate Social Responsibility Societal Responsibility Stakeholder Responsibility Ecological General Customers Profit Responsibility Environment Owners/Stockholders Employees Public Suppliers/Distributors Public Interest Groups Source: Marketing, 5/E by Berkowitz, Kerin, Hartley, and Rudelius. Marketing, Kerin, Rudelius. 13

* * * Corporate Responsibility (Percent of country’s top 100 companies that publish separate CR reports) Source: Financial Times, June 15, 2005 14

* * * Social Audit • Company • Outside Groups that serve as watchdogs: • Socially-Conscious Investors • Environmentalists • Union Officials • Customers

* * * International Ethics and Social Responsibility • Ethical problems are Not Unique to the U. S. managers • Demand for Socially Responsible Behavior from Global Suppliers • Joint Initiative on Corporate Accountability and Workers’ Rights • Inter-American Convention Against Corruption

* * * Best Company Reputation • Johnson & Johnson (80. 6) • Coca-Cola (79. 7) • Google (79. 5) • UPS (79. 4) • 3 M (78. 8) Source: USA Today

* * * Most Admired Global Companies 1. General Electric 6. Microsoft 2. Toyota 7. Dell 3. Procter & Gamble 8. Berkshire Hathaway 4. Fed. Ex 9. Apple Computer 5. Johnson & Johnson 10. Wal-Mart Source: Fortune, 2006 18