Notesale: Turn your study into money

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Ethics
 The study of right and wrong and of morality of the choices individuals make
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 Organizational Relationships
o A business person should put the welfare of others and that of the organization above his or her
own personal welfare
 Conflict of Interest
o Issues arise when a businessperson takes advantage of a situation for personal gain rather than
for the employer’s interest
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Three general sets of factors appear to influence the standards of behavior in
organization…
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o Organizational environment- “Culture of the Organization”

 Management direction
 Employee training
 Ethics officer
 Whistle Blowing
o Informing the press or government officials about unethical practices within one’s organization

Social Responsibility
 The recognition that business activities have an impact on society and the consideration of that impact in
business decision making
o Social responsibility costs money but is also good business
o How socially responsible a firm acts may affect the decisions of customers to do or continue to
do business with the firm
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o Most people believed that competition and the marketplace would correct abuses – Free market solves all
problems
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 The Great Depression and beyond
o Pressure mounted for the government to help with the economy and social conditions
o Franklin D
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Two Views of Social Responsibility
The Economic Model
 The view that society will benefit most when business is left alone to produce and market profitable products that
society needs
 Managerial attitude: Social responsibility is someone else’s job; the firm’s primary responsibility is to make a
profit for its shareholders
 Firms are assumed to fulfill their social responsibility indirectly by paying the taxes that are used to meet the
needs of society

 Social responsibility is the problem of government, environmental groups, and charitable foundations
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4) Social issues are the responsibility of government officials who are elected for that purpose and who are
accountable to the voters for their decisions
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6 billion Superfund creared
in 1980 by Congress
Noise Pollution
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Excessive noise can do physical harm
Ways to reduce noise levels
o Isolating the source of the noise
o Modifying machinery and equipment
 If noise cannot be reduced, workers can be protected by wearing noise-reduction
gear
 Environmental Protection Agency (EPA)
o The federal agency charged with enforcing laws affecting the environment
 Safeguarding the environment requires
o Environmental legislation
o Voluntary compliance
o EPA enforcement actions

Who Should Pay for a Clean Environment?
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Governments and businesses spend billions annually to reduce pollution
Much of the money required is supposed to come from already depressed industries
A few firms have discovered it is cheaper to pay a fine than to install equipment for pollution control
Many business leaders say tax money should be used because business is not the only source of
pollution
 Environmentalists say the cost is an expense of doing business
 Consumers will probably pay a large part of the costs-either as taxes or in the form of higher prices

Implementing a Program of Social Responsibility
 Developing a program of social responsibility
o Secure the commitment of top executives
o Plan the program
o Appoint top-level executive as director to implement the plan
o Prepare a social audit
 Funding the program
o Pass program costs on to consumers as higher prices
o Absorb the program costs says a business expense
o Seek tax reductions or other incentives



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