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SOCIAL RESPONSIBILITY AND

BUSINESS 4TH EDITION

FERRELL THORNE FERRELL

CHAPTER 6

Strategic Approaches to
Improving Ethical Behavior
The Need for
Organizational Ethics Programs
Organizations are held accountable for the conduct of
their employees.
Without such programs, employees may not understand
acceptable behavior.
Organizations can create unethical corporate cultures.
Pressure to succeed
Rewarding the wrong behavior
Stakeholders demand greater ethical and
social responsibility.
Codes of Conduct

Formal statements that describe what an


organization expects of its employees
Reflect the board of directors and senior
managements desire for organizational
compliance
Assess key risks for the organization
Ethics Officers

Assess organizational needs and risks


Develop and distribute the code of ethics
Conduct ethics training programs
Establish and maintain a confidential system to respond to
ethics questions
Make certain the company is in compliance with government
regulation
Monitor and audit ethics conduct
Take action when there is a code violation
Review and update the code
Ethics Training and Communication

Educates employees about the firms policies,


expectations, relevant laws and regulations,
and general social standards
Makes employees aware of available
resources, support systems, and personnel
who can assist with ethics and legal advice
Can empower employees
Establishing Systems to Monitor
and Enforce Ethical Standards
Help or assistance lines
Report and request assistance with ethical concerns
Observation and feedback
Determine level of adequacy in handling ethical issues
Whistle-blowing
Exposing an employers wrongdoing to
outsiders, such as the media or government agencies
Protection for accurate exposures
Leaders influence Corporate Culture

Organizational leaders use their power and


influence to shape corporate culture. Power
refers to the influence that leaders have over
the behavior and decisions of subordinates.
Transformational vs. transactional leaders
Exerting power is one way to influence the
ethical decision-making framework.
Five Power Bases

There are five power bases from which one


person may influence another:
Reward power
Coercive power
Legitimate power
Expert power
Referent power
SOCIAL RESPONSIBILITY AND
BUSINESS 4TH EDITION

FERRELL THORNE FERRELL

CHAPTER 7

Employee Relations
Psychological Contract

The beliefs, perceptions, expectations, and


obligations that make up the agreement
between individuals and the organizations that
employ them
Largely unwritten
Details of the contract develop through
interactions with managers and coworkers and
through perceptions of the corporate culture
Changes in Employees
Psychological Contract with Employers
Legal Responsibilities to Employees

Employment at will
Wages and benefits
Labor unions
Health and safety
Equal Opportunity Employment
Sexual Harassment
Unwelcome sexual advances, requests for sexual
favors, and other verbal or physical conduct of a
sexual nature
Ethical Responsibilities
to Employees
Training and development
Diversity
Allow for work/life balance
Assist employees in balancing work
responsibilities with personal and family
responsibilities
Provide flexibility
Flextime, Job sharing, Child care, Elder care, Health
clubs
Philanthropic Activities

Corporate giving affects employee attitudes toward the


organization.
Employees benefit from participating in volunteerism
programs and other philanthropic projects.
Builds teamwork skills
Educates employees
Example: More than 30,000 volunteers support the Ronald
McDonald House Charities, donating one million hours of
service per year (Source: www.rmhc.com, 11/30/09).
SOCIAL RESPONSIBILITY AND
BUSINESS 4TH EDITION

FERRELL THORNE FERRELL

CHAPTER 8

Consumer Relations
Consumer Economic Issues

Consumers are primary stakeholders because their awareness,


purchase, use and repurchase of products is vital to a
companys existence.
Consumers and business are connected by an economic
relationship.
Consumers exchange money for goods or services.
Consumers expect the products they purchase to perform as
guaranteed by the sellers.
In the early 1900s let the buyer beware typified the power
that business- not consumers- wielded in exchange relationships. This
is still true in less developed parts of the world.
Motivations for
Illegitimate Consumer Complaints
Additional Legal Issues and Relevant
Laws
Health and safety
Pure Food and Drug Act
Credit and ownership
Home Ownership and Equity Protection Act
Marketing, advertising, and packaging
Federal Trade Commission Act
Telemarketing and Consumer Fraud
and Abuse Prevention Act
Additional Legal Issues and Relevant
Laws (cont.)
Sales and warranties
Product liability- a businesss legal
responsibility for the performance of its
products
Toy Safety Act
International issues
Consumerism protect consumers from an
imbalance of power
Ethical Issues

Consumer Bill of Rights


Right to choose
Right to safety
Right to be informed
Right to be heard
Right to seek redress
Right to privacy
Philanthropic Issues

Consumers are increasingly concerned with


organizations social responsibility.
Organizations are increasingly linking
philanthropic efforts with consumer interests
in order to strengthen ties to consumers.
Avonbreast cancer fundraising
Home DepotHabitat for Humanity
Eastman KodakWorld Wildlife Fund
SOCIAL RESPONSIBILITY AND
BUSINESS 4TH EDITION

FERRELL THORNE FERRELL

CHAPTER 9

Community Relations and


Strategic Philanthropy
Community Stakeholders

Issues of concern include:


Pollution of the environment
Land use
Economic advantages to the region
Discrimination
Exploitation of workers and consumers
Neighbor of choice
An organization that builds and
sustains trust within the community
Responsibilities to the Community

Economic issues
Legal issues
Ethical issues
Philanthropic issues

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Economic Issues

Business is vital to the community.


Buyer-seller interaction stimulates the economy.
Companies hire, train, and buy supplies, raw
materials, utilities, advertising services, and other
local goods and services.
A companys departure or retrenchment from
a community can be devastating to
the local economy.
Downsizing
Plant closings
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Legal Issues

A company must operate within legal and regulatory


parameters.
Companies are granted a license to operate.
Business license
Sales tax number
Many mega-retailers have faced rejection because
people believe they threaten small mom & pop
businesses.
Ethical Issues

Companies may evaluate the role and impact of


their decisions on communities from an ethical
perspective.
Business leaders are taking greater responsibility for
determining how they can assist in improving
communities.
Improving public schools and education
Assisting in the development of mass transit
Supporting environmental initiatives

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Philanthropic Issues

Historically this has meant providing


support for worthy causes.
Gifts
Grants
Other resources
Volunteer programs
Employees donate time in support of social causes
(volunteerism).
Communities benefit from the application of new skills
and initiative toward problems; and companies develop
better community relations.
Strategic Philanthropy

The synergistic use of an organizations core


competencies and resources to address key
stakeholders interests and to achieve both
organizational and social benefits
Goes beyond traditional benevolent philanthropy
Involves both financial and non-financial
contributions to stakeholders
Involves employees, organizational
resources, and expertise
Cause-Related Marketing
An organizations products are tied directly to a social concern.
Percentage of sales are usually donated to a cause appealing to a
relevant target market.
Overall goal is to increase product sales for a defined period
of time.
Charity partners often assist in promoting the alliance
(e.g., Habitat for Humanity partnered with Home Depot).
American Express pioneered this process in 1983 by donating a
percentage of credit card sales to the Statue of Liberty and Ellis
Island Restoration Fund.
SOCIAL RESPONSIBILITY AND
BUSINESS 4TH EDITION

FERRELL THORNE FERRELL

CHAPTER 11

Sustainability Issues
Sustainability

Sustainability is the potential for long-term well-


being of the natural environment, including all
biological entities, as well as the interaction among
nature and individuals, organizations, and business
strategies.
Sustainability includes the assessment and
improvement of business strategies, economic
sectors, work practices, technologies, and lifestyles
while maintaining the natural environment.
Global Environmental Issues

Natural environment
Air, Water, Land Pollution
Global Warming
Acid Rain
Deforestation
Urban Sprawl
Waste Management
Genetically Modified Food
Ways to Curb Environmental Issues

DOE Jabatan Alam Sekitar


Environmental Legislation
Alternative energy wind, solar, hydro, biofuel,
electric etc.
Recycling
Green Marketing
Emissions reduction
Socially Responsible Buying
Environmental Management ISO 14000
SOCIAL RESPONSIBILITY AND
BUSINESS 4TH EDITION

FERRELL THORNE FERRELL

CHAPTER 12

Social Responsibility in a
Global Environment
The Global Marketplace

The expanding global marketplace


requires that executives and
managers develop the ability to
conduct business effectively and
socially responsibly in
different regions of the world.
Employee Issues in Global
Environment
Wages and benefits relative to home country standards
Attitudes toward employees from different genders and
ethnicities, especially in executive positions
Existence of collective bargaining efforts
Laws and regulations for employee rights, health, and safety
Norms of employee volunteering
Availability and comfort with open-door policies and other
management practices
Consumer Issues in Global
Environment
Laws and regulations on product safety and
liability
Presence and power of consumer rights groups
Respect for the product needs of subcultures
and minority groups
Attitudes and accommodations for customers
with disabilities
Shareholder Issues in Global
Environment
Laws and regulations regarding ownership and
corporate governance
Stability and governance of stock exchanges
Willingness and ability to participate in
shareholder meetings
Supplier Issues in Global
Environment
Ethical and social considerations in the supply
chain
Prices offered to suppliers in developed
countries and developing countries in
comparison to other suppliers
Availability and attitudes toward minority
suppliers
Community Issues in Global
Environment
Norms of community relations and dialogue
Expectations of community service and/or
philanthropy
Rights of indigenous people
Availability and quality of infrastructure
(roads, utilities, schools, etc.)
Environmental Issues in Global
Environment
Environmental law and regulations
Availability of green electricity, recycled
materials, and other environmentally friendly
inputs
Environmental expectations relative to those in
home country
Use of natural resources to achieve business
goals

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