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Chapter 4

Business Ethicsand SocialResponsibility

Section 4.1

Business Ethics

Read to Learn

Define ethics and business ethics.

Describe why ethical behavior is good for

business.

List the steps for dealing with an ethical

dilemma.

The Main Idea

Ethics are moral principles by which people

conduct themselves personally, socially, and

professionally. Business ethics are rules that guide

the behavior of a business and its employees.

Business ethics are generally based on moral

principles. In business, good ethics is beneficial for

long-term profitability and success.

Key Concepts

The Nature of Ethics

Ethics as Good Business

Ethical Questions

Key Terms

ethics

business

ethics

moral principles by which people

conduct themselves personally,

socially, or professionally

rules based on moral principles about

how businesses and employees ought

to conduct themselves

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Key Terms

code of

ethics

sweatshop

a set of guidelines for maintaining

ethics in the workplace

a shop or factory in which workers are

employed for long hours at low wages

and under unhealthy conditions

Key Terms

conflict of

interest

a conflict between self-interest and

professional obligation

The Nature of Ethics

ethicsmoral principles by which people conduct themselves personally, socially, or professionally

When you are guided

by ethics, you do not

cheat on a test or lie to

friends or family.

The Nature of Ethics

business ethicsrules based on moral principles about how businesses and employees ought to conduct themselves

Most businesses are

guided by business

ethics.

Different cultures,

businesses, and industries

have different ethical

standards

Business Ethics

Creating safeproducts

Creating jobs

Fair treatmentof

employees

Environmentalprotection

Truthful aboutfinancialstatus

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Cultural Etiquette

In Thailand, it is customary to exchange gifts during a second business meeting.

In China, gift giving is considered a form of bribery and is illegal.

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Law and Ethics

In business, people

follow rules as well as

a code of ethics.

code of ethicsa set of guidelines for maintaining ethics in the workplace

Law and Ethics

A sweatshop is an

example of an

unethical practice

outlawed in the United

States.

sweatshopa shop or factory in which workers are employed for long hours at low wages and under unhealthy conditions

Law and Ethics

The Occupational Safety and Health

Administration (OSHA) sets and enforces

work-related health and safety rules.

Ethics as Good Business

Unethical business practices include:

Lying

Offering merchandise known to be

substandard

Treating customers or employees unfairly

Ethics as Good Business

If a business violates government regulations,

the owner can be fined or go to jail.

If an employee violates a company or

professional code, the employee might be fired

or lose his or her license.

Ethics as Good Business

Unethical business practices can result in bad

word of mouth and result in lost sales.

Unethical behavior toward employees can

lead to legal action or a high rate of employees

quitting.

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Conflicts of Interest

Conflict of interest

is a major ethical

question that is

generally not illegal.

conflict of interesta conflict between self-interest and professional obligation

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Is it against the law? Does it violate company

or professional policies?

Even if everyone is doing it, how would I feel

if someone did this to me?

Am I sacrificing long-term benefits for

short-term gains?

Ethical Questions

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1. Identify the ethical dilemma.

2. Discover alternative actions.

3. Decide who might be affected.

4. List the probable effects of the alternatives.

5. Select the best alternative.

The Ethical Decision-Making Process

Ethical Observations by EmployeesFigure 4.1

1. What is the difference between personal and business ethics?

Personal ethics: moral principles that guide an individual; business ethics: rules, based on moral principles, used by a business.

2. Describe some of the ways that unethical business practices can affect a business.

Customers will not patronize the business.It is hard to retain employees. If the behavior is illegal, the business might be fined.

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3. What is the relationship between illegal behaviors of business and unethical behaviors of business?

Generally, illegal behaviors of business are also considered unethical but there are some unethical behaviors that are not illegal.

Chapter 4

Business Ethicsand SocialResponsibility

Section 4.1

Business Ethics

End of