Assignment Instructions/ Description
Business Ethics is a part of decision making at all levels of work and management
Business Ethics is a part of decision making at all levels of work and management
v Deals with questions of whether practices are acceptable
v No universally accepted approach for resolving issues
Business Ethics Defined: Comprises principles, values, and standards that guide behavior in the world of business
v Ethical decisions occur when accepted rules no longer serve and decision makers must weigh values and reach a judgment
Values and judgments are critical in ethical decisions
Principles: Specific boundaries for behavior that are universal and absolute
• Freedom of speech, civil liberties
Values: Used to develop socially enforced norms
• Integrity, accountability, trust
Organizational Ethical Culture - Ethical culture: The component of corporate culture that captures the values and norms that an organization defines as appropriate
v Creates shared values
Goal is to:
Ø Minimize need for enforced compliance
Ø Maximize utilization of principles/ethical reasoning
v Companies can demonstrate their commitment to social responsibility through adopting international standards
Global Sullivan Principles
Coalition for Environmentally Responsible Economies (CERES)
United Nations Global Compact
Ethics Contributes to Employee Commitment
Commitment comes from employees who are invested in the organization
v Employees willing to make personal sacrifices for the organization
The more company dedication to ethics, the greater the employee dedication
Concerns include a safe work environment, competitive salaries and benefits packages, and fulfillment of contractual obligations
Ethics Contributes to Investor Loyalty
Companies perceived by their employees as being honest are more profitable
v Ethical climates in organizations provide a platform for
Efficiency
Productivity
Profitability
Ethics Contributes to Customer Satisfaction
Consumers respond positively to socially concerned businesses
Ø Being good can be profitable
v Customer satisfaction dictates business success
v A strong organizational ethical climate places customers’ interests first
v Research shows a strong relationship between ethical behavior and customer satisfaction
Ethics Contributes to Profits
v Corporate concern for ethical planning is being integrated with strategic planning
Maximizes profitability
v Corporate citizenship is positively associated with
Return on investment and assets
Sales growth
v Studies have found a positive relationship between corporate citizenship and performance
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