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6-36 Ethics & Social Responsibility [CH 6

ethics, and demonstrated in his conduct. It involves the right and wrong actions that arise in any
work environment, as well as a knowledge of the institutional parameters within which the
decision must be made. Some firms spell out their ethical parameters in formal codes of
conduct.
6. Discuss government’s response to business that fails to self-regulate. History shows that
when business fails to respond to social or ethical issues, government is quick to enter with
regulatory actions. Therefore, self-regulation is in the best interest of the business community.
7. Define the impact of business's responsibilities to the general society. It is important for
managers to appreciate that they have responsibilities to the general public as well as their
duties to their employees and employers. Currently, these public responsibilities include such
areas as consumer education, protecting the environment, and conserving and developing
energy resources.
8. Outline the development of the consumer movement and identify the rights of consumers.
Business's most readily identifiable responsibilities are related to the consumer. The consumer
movement began with the Industrial Revolution, when many workers faced unsafe conditions
and consumers were exposed to harmful products. The movement gained momentum during
the 1930’s, the time of the Great Depression. These responsibilities were heightened 1960s.
Most industry and legislative response to this movement has followed John F. Kennedy's
statement of consumer rights. These consumer rights were that of safety, to be informed, to
choose, and to be heard.
9. Outline the relationship of a business to its personnel and that of the personnel to their
employer. Relations with a firm’s personnel are some of the most significant and ethical issues
facing contemporary business. Firms have a responsibility to provide fair compensation,
adequate benefits for employees, equal employment opportunity and a safe working
environment. Employees have responsibilities to be loyal to their employer, do their assigned
work, and exhibit a work ethic that benefits themselves and their firm.
10. Describe business's responsibilities to investors and the financial communities. There has
been considerable publicity in recent years about business's social and ethical responsibilities to
investors and the financial communities. Topics such as greenmail, insider trading, and
executive compensation are now reported and analyzed in the media as well as in business
circles. Firms have a responsibility to make a profit for its investors (owners); to accurately
report is financial position according to proper accounting practices.

Questions for Review and Discussion
1. Explain the interrelationship of ethics and morality and its application in business.
2. Are ethics and social responsibility linked? Why or why not and explain your response?
Why is it important for a business to act in a socially responsible manner as an element of
public relations?
3. Is self-regulation a deterrent to government regulation in matters of social responsibility
and business ethics?
4. What is the context of President Kennedy’s consumer “bill of rights”? Give an example of
each and explain how firms can see that consumer rights are assured. What are business's
responsibilities to the general public?
5. Explain business's responsibilities in regard to its employees and the employee’s
responsibility to their employer and the customer. Outline the comparable worth
argument. Are top corporate executives overpaid?
6. Athletes are compensated in the millions of dollars, whereas female teachers are
compensated far less. Presume a university graduate female tries out for the NY Mets
baseball club. She has the same or better education, skill training, is physically fit for her
gender, and was designated the “most valuable player” on her University Women’s
Softball team. Discuss the decision to hire or not and include comparable worth.
7. What factors help determine whether a business manager will behave ethically or
unethically in relation to The Law of Nature? List specific actions a firm could take to
encourage ethical behavior.

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