DBA3023: ENTREPRENEURSHIP

TOPIC 2
ETHICS & SOCIAL
RESPONSIBILITY – DOING THE
RIGHT THING
SCHOOL OF BUSINESS
 CONTENT
2. 1 Define Business Ethics & Describe The Three Levels of
Ethical Standards
2. 2 Determine Who is Responsible for Ethical Lapses Occur
2. 3 Explain How to establish & Maintain High Ethical Standards
2. 4 Explain the difference between social entrepreneurs &
Traditional entrepreneurs
2. 5 Define Social Responsibility
https://www.forbes.com/sites/bruceweinstein/2
017/10/31/whats-the-difference-between-ethics
-and-business-ethics/#185641a95428

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2. 1 Define Business Ethics & Describe
The Three Levels of Ethical Standards
Meaning of Business Ethics

The fundamental moral values and behavioral

standards that form the foundation for the people of an
organization as they make decisions and interact with
stakeholders
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 External Stakeholders

Customers Special Interest

Unions
Groups
Internal Stakeholders

Employees Investors

Board of Management
Directors
Creditors Suppliers
Government General Public

Key Stakeholders 5
Three Levels of Ethical Standards

 The law
 Organizational policies and procedures
 The moral stance employees take when faced with
decisions not governed by formal rules

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An Ethical Framework
Step 1. Recognize the ethical dimensions involved in the
dilemma or decision
Step 2. Identify the key stakeholders involved and determine
how the decision will affect them
Step 3. Generate alternative choices and distinguish
between ethical and unethical responses
Step 4. Choose the “best” ethical response and implement it

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Three Styles of Management

￮ Immoral management - driving force is greed

￮ Amoral management - does not consider
ethical impact on others
￮ Moral management - sees the law as a
minimum standard of behavior

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 The Benefits of Moral Management
 Earning a profit does not conflict with maintaining high ethical
standards
 Avoid the damage to a company’s reputation that results from
unethical behavior
 Dealing with diverse stakeholders is easier with a solid ethical
foundation
 Attracting and retaining quality workers is easier
 A company’s ethical philosophy determines its ability to provide
value for its customers
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2. 2 Determine Who is responsible for
Ethical Lapses Occur
Why Ethical Lapses Occur
￮ An unethical employee
￮ An unethical organizational culture
￮ Moral blindness
￮ Competitive pressures
￮ Opportunity pressures
￮ Globalization of business
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Establishing Ethical Standards
￮ The u’tili’tarian principle
￮ Kant's categorical imperative
￮ The professional ethic
￮ The Golden Rule
￮ The television test
￮ The family test
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2. 3 Establishing & Maintaining High
Ethical Standards
￮ Create a company credo
￮ Develop a code of ethics
￮ Enforce the code fairly and consistently
￮ Conduct ethics training
￮ Hire the right people
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Maintaining Ethical Standards
￮ Perform periodic ethical audits
￮ Establish high standards of behavior...not just rules
￮ Set an impeccable ethical example
￮ Create a culture that emphasizes two-way
communication
￮ Involve employees in establishing ethical standards

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2. 5 Define Social Responsibility
Social responsibility - the awareness by a company’s
managers of the social environmental, political, human,
and financial consequences its actions produce
Studies: Companies that incorporate social responsibility
into their competitive strategies outperform those that fail
to do so

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Business has a Social Responsibility to...
￮ The environment
￮ Employees
￮ Customers
￮ Investors
￮ The community
Responsibility to the Environment
The “Three R’s”:
￮ Reduce the amount of materials used in your company
￮ Reuse whatever you can
￮ Recycle the materials that you must dispose of

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Responsibility to Employees

￮ Diversity

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SPLENDID Approach to Diversity
￮ Study
￮ Plan
￮ Lead
￮ Encourage
￮ Notice
￮ Discussion
￮ Inclusion
￮ Dedication
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Managing Diversity
￮ Assess your company’s diversity needs
￮ Learn to recognize your own biases and
stereotypes
￮ Avoid making invalid assumptions
￮ Push for diversity in your management team

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Managing Diversity
￮ Concentrate on communication
￮ Make diversity a core value in the organization
￮ Continue to adjust your company to your workers

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Responsibility to Employees

￮ Diversity
￮ Drug testing

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A Drug Prevention Program Should Include .
..
￮ A written substance abuse policy
￮ Training supervisors to detect drug-using workers
￮ An employee education program
￮ A drug testing program, when necessary
￮ An employee assistance program (EAP)

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Responsibility to Employees
￮ Diversity
￮ Drug testing
￮ AIDS

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An AIDS Policy Should Address …
￮ Employment
￮ Discrimination
￮ Employee benefits
￮ Confidentiality
￮ Education
￮ “Reasonable accommodations”

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Responsibility to
Employees

 
￮ Diversity
￮ Drug testing
￮ AIDS
￮ Sexual harassment
                                               

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Sexual Harassment
 Any unwelcome sexual advance, request for
sexual favors, or other verbal or physical sexual
conduct made explicitly or implicitly as a condition
of employment.
 85% of sexual harassment cases are filed by
women.
 Harassment an take several forms
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Behavior Leading to Sexual Harassment Charges

￮ Quid Pro Quo (“something for something”)

harassment
￮ Hostile environment
￮ Harassment by non-employees

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Preventing Sexual Harassment
￮ Education
￮ Policy
￮ Procedure
￮ Listen without judging
￮ Investigate complaints promptly
￮ Interview parties involved and witnesses
￮ Maintain confidentiality
￮ Follow company policy
￮ Inform both parties of actions taken
￮ Document the investigation
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Responsibility to Employees
￮ Diversity
￮ Drug testing
￮ AIDS
￮ Sexual harassment
￮ Privacy

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Responsibility to Customers
￮ Right to safety
￮ Right to know
￮ Right to be heard
￮ Right to education
￮ Right to choice

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 END
OF TOPIC

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