1. Chapter 4
Conducting Business Ethically and
Responsibly

2. Sr. Chapter Chapter Heading
No.No.
1. 3 Understanding the Global context of business (031012)
2. 4 Conducting Business Ethically and Responsibly (250212)
3. 6 Organizing the Business Enterprise
4. 7 Understanding Entrepreneurship and Small Business
5. 8 Managing Human Resources
6. 9 Understanding Employee Motivating, Satisfying and Leadership
7. 11 Understanding Marketing Processes and Consumer Behavior
8. 16 Managing Quality and Productivity
9. 17 Managing Information Systems and Communication Technology
10. 19 Understanding Money and Banking
11. 20 Intermediate Term and Lease Financing

3. Marks Distribution
50 Terminal Examination
20 Mid Term Examination
15 Quizzes
15 Final Assignment
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4.  ETHICS IN THE WORKPLACE
 Assessing ethical behavior
 Company practices and Business Ethics
 SOCIAL RESPONSIBILITY
 The Stakeholder Model of Responsibility
 AREAS OF SOCIAL RESPONSIBILITY
 Responsibility Towards the Environment
 Responsibility Towards Customers
 Responsibility Towards Employees
 Responsibility Towards Investors
 IMPLEMENTING SOCIAL RESPONSIBILITY
PROGRAMS
 approaches to social responsibility
 Managing Social Responsibility programs
 Social responsibility and the Small business

5. Ethics in the Workplace
Ethics Social
Beliefs about Responsibility
right and wrong Obligation of a
and actions that business to contribute
reflect beliefs to society
© 2009 Pearson Education, Inc.

6. Definitions
• Business
• A business (also known as enterprise or firm) is an
organization engaged in the trade of goods, services, or
both to consumers. Businesses may be privately owned,
not-for-profit or state-owned.
• Ethics:
• Beliefs about what is right and wrong or good and bad in actions
that affect others
• Or
• Ethics are moral principles by which people conduct themselves
personally, socially, and professionally

7. Definitions
• Personal ethics:
• moral principles that guide an individual
• Business ethics:
• rules, based on moral principles, used by a business/
manager/ employer.
• Ethical Behavior
• Behavior conforming to generally accepted social norms
concerning beneficial and harmful actions
• Unethical Behavior
• Behavior that does not conform to generally accepted social
norms concerning beneficial and harmful actions

8. Definitions
• whistleblower
• (an informant who exposes wrongdoing within an organization in
the hope of stopping it) "the law gives little protection to
whistleblowers who feel the public has a right to know what is
going on";

9. Assessing Ethical Behavior
• Ethical Norms and the Issues They Entail
– Utility: Does a particular act optimize the benefits
to those who are affected by it? Do all relevant
parties receive “fair” benefits?
– Rights: Does the act respect the rights of all
individuals involved?
– Justice: Is the act consistent with what’s fair?
– Caring: Is the act consistent with people’s
responsibilities to each other?

10. Classifying
Business Decisions
Ethical Ethical Ethical
but and
Illegal Legal
Unethical Unethical
and but
Unethical Illegal Legal
Illegal Legal

11. ETHICS
11

12. Company Practices and
Business Ethics
• Encouraging Ethical Behavior Involves:
– Adopting written codes of conduct and establishing
clear ethical positions for the conduct of business
– Having top management demonstrate its support of
ethical standards
– Instituting programs to provide periodic ethics training
– Establishing ethical hotlines for reporting and
discussing unethicalPearson Education, Inc.and activities
© 2009 behavior

13. Factors That Cause Workers
To Act Unethically
 Pressure to meet sales,
budget or profit goals
 Lack of recognition
 Personal financial worries
 Balancing work & family
 Poor communication

14. Top Five Unethical/Illegal
Behaviors of Workers
 Cut corners in quality control
 Covered up incidents
 Abused or lied about sick days
 Lied to or deceived customers
 Put inappropriate pressure on
others

15. Fostering Ethical Behavior
 Leadership
 Codes of Conduct
 Compliance-based
 Integrity-Based
 Social Audits
 Whistle Blowing

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

17. Business Mission Statement
 Why?
 What?
 How?

18. Telenor Pakistan
18

19. Proctor & Gamble
19

20. Uni-lever Pakistan
20

21. SOCIAL RESPONSIBILITY

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

23. RESPONSIBILITY TO……
EMPLOYEES Creating Jobs that Work
CUSTOMERS Value, Honesty and Communication
INVESTORS Fair Stewardship and Full Disclosure
COMMUNITY Business and the Greater Good
ENVIRONMENT Sustainable Development
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24. RESPONSIBILITY TO EMPLOYEES:
CREATING JOBS THAT WORK
A. Meet Legal Standards
B. Workplace Safety
C. Minimum Wage/Overtime
Requirements
D. Value Employees
E. Provide Work/Life Balance
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25. RESPONSIBILITY TO CUSTOMERS
CONSUMERISM:
• The Right to Be Safe
• The Right to Be Informed
• The Right to Choose
• The Right to be Heard
25

26. ROTTEN APPLE?
Planned Obsolescence – APPLE COMPUTERS:
Deliberately designing products
• iPods had irreplaceable battery.
to fail in order to shorten
the time between consumer • Batteries died after 18 months.
repurchases • Customers were encouraged to
purchase new iPods
• Two customers posted high profile
protest movies online.
• APPLE announced replacement
program.
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27. RESPONSIBILITY TO INVESTORS
FAIR STEWARDSHIP AND FULL DISCLOSURE
A. Legal Requirements
B. Responsible use of
Corporate Dollars
A. Honesty
C. Is Optimism or Pessimism
Socially Responsible?

28. RESPONSIBILITY TO COMMUNITY
Cause-related Marketing –
partnerships between businesses
and nonprofit organizations,
designed to spike sales for the
company and raise money Corporate Responsibility
for the nonprofit. The actions of the business
rather than donations of
Corporate Philanthropy - money and time.
business donations to
nonprofit groups, including
both money and time.
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29. RESPONSIBILITY TO ENVIRONMENT
Green Marketing –
marketing environmental
products and practices
to gain a competitive edge.
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30. RESPONSIBILITY TO ENVIRONMENT
A. Responsibility to environment is a part of
responsibility to community
A. Reducing the amount of trash is more
important than recycling
A. Although consumers support green
marketing, they may not be willing to
sacrifice quality
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31. Implementing Social
Responsibility (SR) Programs
• Arguments Against SR
– The cost of SR threatens profits.
– Business has too much control over which SR issues
would be addressed and how SR issues would be
addressed.
– Business lacks expertise in SR matters.
• Arguments for SR
– SR should take priority over profits.
– Corporations as citizens should help others.
– Corporations have the resources to help.
– Corporations should solve problems they create.

32. Approaches to Social Responsibility
 Obstructionist stance:
 A company does as little as possible for SR and may involve
attempts to deny or cover up violations
 Defensive Stance:
 A company meets only minimum legal requirements in its
commitments to groups and individuals for SR
 Accommodative stance
 A company, if specially asked to do so, exceeds legal minimums
to groups and individuals in its social environment
 Proactive stance
 A company actively seeks opportunities to contribute to the
well-being of groups and individuals in its social responsibility

33. FIGURE 2.4: Spectrum of Approaches to Corporate
Social Responsibility

34. Managing Social Responsibility
Programs
1. Social responsibility must start at the top and be
considered as a factor in strategic planning.
2. A committee of top managers must develop a plan
detailing the level of management support.
3. One executive must be put in charge of the firm’s
agenda.
4. The organization must conduct occasional social
audits—systematic analyses of its success in using
funds earmarked for its social responsibility goals.

35. Social Responsibility and the
Small Business
• Large Business versus Small Business
Responses to Ethical Issues
– Differences are primarily differences of scale
– More issues are questions of individual ethics
• Ethics and social responsibility are
decisions faced by all managers in all
organizations, regardless of rank or size

36. Corporate Annual Giving
Merck $221.0*
Johnson & Johnson 176.2
Pfizer 123.9
Eli Lilly 121.4
IBM 116.1
Microsoft 104.7
Intel 101.0
Bank of America 91.5
Source: The Taft Group * In Millions