chapter 3 the future of business gitman & mcdaniel 5 th edition the future of business gitman...

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THE FUTURE OF BUSINESSGitman & McDaniel

5th Edition

THE FUTURE OF BUSINESSGitman & McDaniel

5th Edition

Chapter3

Making Ethical Decisions and Managing a Socially

Responsible Business

Making Ethical Decisions and Managing a Socially

Responsible Business

Prepared byDeborah Baker

Texas Christian University

Prepared byDeborah Baker

Texas Christian University

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 2Ch

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1 What philosophies and concepts shape personal ethical standards?

2 How can organizations encourage ethical business behavior?

3 What is social responsibility?

4 How do businesses meet their social responsibilities to various stakeholders?

5 What are the global and domestic trends in ethics and social responsibility?

Learning Goals


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Learning Goals

Appendix:

6 How does the legal system govern business transactions and settle business disputes?

7 What are the required elements of a valid contract; and what are the key types of business law?

8 What are the most common taxes paid by businesses?


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Learning Goal 1

What philosophies and concepts

shape personal ethical standards?

1


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Ethics

A set of moral standardsfor judging whether

something is right or wrong.

A set of moral standardsfor judging whether

something is right or wrong.

EthicsEthics


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Individual Business Ethics1

Recognizing Unethical Business Activities

Recognizing Unethical Business Activities

JusticeJustice

Individual RightsIndividual Rights

UtilitarianismUtilitarianism

FactorsFactorsInfluencingInfluencingIndividualIndividualBusinessBusiness

EthicsEthics

FactorsFactorsInfluencingInfluencingIndividualIndividualBusinessBusiness

EthicsEthics


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Recognizing Unethical Business Activities1

1. Taking things that don’t belong to you.1. Taking things that don’t belong to you.

2. Saying things you know are not true.2. Saying things you know are not true.

3. Giving or allowing false impressions.3. Giving or allowing false impressions.

4. Buying influence or engaging in a conflict of interest.4. Buying influence or engaging in a conflict of interest.

5. Hiding or divulging information.5. Hiding or divulging information.

6. Taking unfair advantage.6. Taking unfair advantage.

7. Committing improper personal behavior.7. Committing improper personal behavior.

8. Abusing another person. 8. Abusing another person.

9. Permitting organizational abuse.9. Permitting organizational abuse.

10. Violating rules.10. Violating rules.

11. Condoning unethical actions.11. Condoning unethical actions.


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2 Learning Goal 2

How can organizations encourage ethical

business behavior?


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HOW ORGANIZATIONS INFLUENCE ETHICAL CONDUCT2

Establish a Formal Code of Ethics Establish a Formal Code of Ethics

Offer Ethics Training ProgramsOffer Ethics Training Programs

Lead by ExampleLead by Example


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3 Learning Goal 3

What is socialresponsibility?


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3 SOCIAL RESPONSIBILITY

EthicalEthical

LegalLegal

EconomicEconomic

PhilanthropicPhilanthropic


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3Understanding Social

Responsibility

LegalityLegality ResponsibilityResponsibility


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3Understanding Social

Responsibility

Responsible IrresponsibleLe

gal

Illeg

al Harms society,and breaks laws

Follows laws, but harms society

Follows laws, and benefits society

Benefits society,but breaks laws


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4

How do businesses meet their social responsibilities to various stakeholders?

Learning Goal 4


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RESPONSIBILITIES TO STAKEHOLDERS4

ResponsibilitiesResponsibilitiesof aof a

BusinessBusiness

ResponsibilitiesResponsibilitiesof aof a

BusinessBusiness

InvestorsInvestors

General PublicGeneral Public

CustomersCustomers

EmployeesEmployees


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What are the global and What are the global and domestic trends in ethics domestic trends in ethics and social responsibility?and social responsibility?

What are the global and What are the global and domestic trends in ethics domestic trends in ethics and social responsibility?and social responsibility?

5 Learning Goal 5


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Strategic giving in corporate philanthropyStrategic giving in corporate philanthropy

A new social contract between employer and employeeA new social contract between employer and employee

Growth of global ethics and social responsibilityGrowth of global ethics and social responsibility

TRENDS IN ETHICS & SOCIAL RESPONSIBILITY


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Responsibilities of a Multinational Corporation

Responsibilities of a Multinational Corporation

Respect local practices and customs

Ensure harmony between staff and host population

Provide management leadership

Develop local managers who will be a credit to the community

Implement ethical guidelines within the organization in the host country

Trends in Global Ethics


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How does the legal systemHow does the legal systemgovern business transactionsgovern business transactionsand settle business disputes?and settle business disputes?

How does the legal systemHow does the legal systemgovern business transactionsgovern business transactionsand settle business disputes?and settle business disputes?

APPENDIX: Learning Goal 6


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The rules governing a society’s conduct that arecreated and enforced bya controlling authority

The rules governing a society’s conduct that arecreated and enforced bya controlling authority

LawsLaws

The Legal and Tax Environment


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Common LawCommon LawCommon LawCommon Law Statutory LawStatutory LawStatutory LawStatutory Law

Evolved out ofjudicial decisions

Case law

Written law, enactedby legislatures

Administrative law is passed by boards, commissions, and agencies

The Main Sources of Law


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Trial CourtsTrial Courts

Appellate CourtsAppellate Courts

The Supreme CourtThe Supreme Court

Administrative AgenciesAdministrative Agencies

Nonjudicial methodsNonjudicial methods

ArbitrationArbitration MediationMediation

The Court System


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What are the required elementsWhat are the required elementsof a valid contract; and what areof a valid contract; and what arethe key types of business law?the key types of business law?

What are the required elementsWhat are the required elementsof a valid contract; and what areof a valid contract; and what arethe key types of business law?the key types of business law?



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Legal formLegal form

Legal purposeLegal purpose

ConsiderationConsideration

CapacityCapacity

Mutual assentMutual assent

Elements of a Valid Contract


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Remedies for Remedies for Breach of Contract Breach of Contract Remedies for Remedies for Breach of Contract Breach of Contract

Payment ofDamages

Payment ofDamages

Specific Performance of the ContractSpecific Performance of the Contract

RestitutionRestitution

Breach of Contract


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ExpressWarrantiesExpress

Warranties

ImpliedWarranties

ImpliedWarranties

Neither written nor oral. These guarantees are imposed on sales transactions by statute or court decision.

Neither written nor oral. These guarantees are imposed on sales transactions by statute or court decision.

Specific statements of factor promises about a product by the seller.

Specific statements of factor promises about a product by the seller.

Warranties


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PatentPatentGives an inventor the exclusive right to manufacture, use, and sell an invention for 17 years.

Gives an inventor the exclusive right to manufacture, use, and sell an invention for 17 years.

CopyrightCopyrightAn exclusive right to use, produce, and sell creations, such as books, articles, movies, works of art.

An exclusive right to use, produce, and sell creations, such as books, articles, movies, works of art.

TrademarkTrademarkA design, name, or other distinctive mark used by a manufacturer to identify its goods.

A design, name, or other distinctive mark used by a manufacturer to identify its goods.

Patents, Copyrights, Trademarks


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Key Consumer Protection Laws7

Americans with Disabilities ActAmericans with Disabilities Act

Children’s Television Act

Cigarette Labeling Act

Consumer Product Safety Act

Pure Food & Drug Act

Mail Fraud Act

Protects the rights of peoplewith disabilitiesProtects the rights of peoplewith disabilities

Limits advertising shownduring children’s TV shows

Requires health hazard labels on cigarettes

Created the Consumer Product Safety Commission

Created the FDA

Federal crime to defraudconsumers through mail


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What are the most common taxes What are the most common taxes paid by businesses?paid by businesses?

What are the most common taxes What are the most common taxes paid by businesses?paid by businesses?



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Taxation of Business

Excise TaxesExcise Taxes

Sales TaxesSales Taxes

Payroll TaxesPayroll Taxes

Property TaxesProperty Taxes

Income TaxesIncome Taxes

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chapter 3 the future of business gitman & mcdaniel 5 th edition the future of business gitman...

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