Chapter 2 Ethic and Social Resp

Chapter 2
Ethics and Social Responsibility

MGT1101 Introduction to Business
Learning Objectives
For Chapter 2
1. Understand what is meant by business ethics.

2. Identify the types of ethical concerns that arise in the
business world.
3. Describe how our current views on the social responsibility
of business have evolved.
MGT1101 Introduction to Business Chapter 2

Business
The effort of individuals to produce and sell (for
PROFIT) the goods and services that
“satisfy customers’ needs”

What do they want?

Buy Happy Meals and get free toys?
BUT Happy Meals are generally high in sodium, fat and calories
exceeding recommended levels
Is this strategy ethical?

In 2010, McDonald’s was sued by a mother in California and the Center for
Science in the Public Interest (CSPI) for using deceptive advertising to lure
young children into its restaurants to buy Happy Meals to get free toys; Happy
Meals are generally high in sodium, fat and calories, exceeding recommended
levels for children under eight.
Old Happy Meal Nutrition Standard (for kids):

Under 500 calories that include vegetables and
fruit, with non-sugary drink

New Happy Meal Pack

Refer to page 34-36
Business Ethics:
A Definition
The effort of individuals to produce and sell (for PROFIT) the

goods and services that satisfy society’s needs
Business
Ethical issues arisen in business
environment
Business The application of ethical principles to

business situations
Ethics
Making business decisions for profit
based on ethical principles
Ethics
The study of right and wrong and of morality of the choices
individuals make

Refer to page 42-48
Corporate Social Responsibility (CSR)

The Meaning
The recognition that business activities have an impact

on society and the consideration of that impact in
business decision making
to encourage a positive impact through company's activities on the
environment, consumers, employees, communities, stakeholders.
Session 1-2
MGT1101 Introduction to Business Your Logo Chapter
Page 205
everything we do is for the love of dogs
Session 1-2
Page 205
Session 1-2
Page 205
to power every Apple facility
entirely with energy from
renewable sources — solar,
wind, hydro, and geothermal.
Session 1-2
Page 205
Refer to page 48
Consumerism
All activities undertaken to
The Right to
protects the right of consumers Safety
The Right to be
Informed
The Right to
Choose
The Six Basic
Right of
Consumers
The Right to Be
Heard
The Right to
Consumer
Education
The Right to
Service
Session
Ref: The1-2
Decline of Ethical Behavior in Business by JEFFREY T. LUFTIG AND STEVEN OUELLETTE Page 05
Refer to page 48
Consumerism
The Six Basic Rights
The Right to Safety Consumers have protection from the
sale and distribution of dangerous
The Right to be Informed goods and services
The product must be safe for their

The Right to Choose intended used
The Right to Be Heard
The Right to Consumer Education
The Right to Service
Session
Ref: The1-2
Refer to page 48
Consumerism
The Right to Safety
The Right to be Informed Consumers have the right to receive

adequate information about products on
which to base buying decisions.
The Right to Choose
Session
Ref: The1-2
Refer to page 49
Consumerism
The Right to Safety
The Right to be Informed
The Right to Choose Consumers have the right to select the

goods or services that he or she wants
The Right to Be Heard to purchase.
Session
Ref: The1-2
Refer to page 54
Consumerism
The Right to Safety
The Right to Choose
The Right to Be Heard Consumers have a right to complain

when there are problems or concerns.
The Right to Consumer Education They have the right to speak up, to be
heard, and to expect positive results.
Session
Ref: The1-2
Refer to page 50
Consumerism
The Right to Safety
The Right to Choose
The Right to Consumer Education Consumers have a right to know their

rights and exercise them. Only then real
consumer protection can be achieved
with success.
Session
Ref: The1-2
Refer to page 50
Consumerism
The Right to Safety
The Right to Choose
The Right to Service Consumers have the right to be treated

with respect, an appropriate response to
their needs and problems
Session
Ref: The1-2
THANK YOU!
THANK YOU!
Additional
Business Ethics
Example
Let’s say that you get test results

indicating that your product fails to
meet its specification limits.
The CEO tells you to pass it anyway.
What do you do?
Option 1
You believe that the failing product may
hurt your customers and society.
So, you refuse the CEO’s request
and proceed to notify the customers.
Session
Ref: The1-2
Additional
Business Ethics
Example

What do you do?
Option 2
You believe that telling the customers is
the right thing to do but remain silent –
until you get caught.
When the company asks if you will testify
against your former CEO, you do
Session
Ref: The1-2
Additional
Business Ethics
Example

What do you do?
Option 3
You believe that any moral duty to your
customers is minor compared to your
commitment to the firm. You choose to remain
silent, the product is released, and people are
directly injured by your product.
Session
Ref: The1-2
Additional
Business Ethics
Example

What do you do?
Option 4
You believe that telling the customer is

the right thing to do, but do not tell the
customers because you fear the
consequence
Session
Ref: The1-2
Additional
Business Ethics
Example
Let’s say that you get test results indicating that your
product fails to meet its specification limits.
What do you do?
Moral Immoral
Morals define personal
Ethical
character. Silent
Ethics stress a social Notify (Witness)
system in which those
morals are applied.
Unethical
Ethics point to standards Silent Silent (Fear)

of behavior expected by (Commitment)
the group to which the
individual belongs.
Session
Ref: The1-2

Chapter 2 Ethic and Social Resp

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Chapter 2 Ethic and Social Resp

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Chapter 2

Ethics and Social Responsibility

1. Understand what is meant by business ethics.

MGT1101 Introduction to Business Chapter 2

MGT1101 Introduction to Business Chapter 2

MGT1101 Introduction to Business Chapter 2

Is this strategy ethical?

MGT1101 Introduction to Business Chapter 2

Old Happy Meal Nutrition Standard (for kids):

MGT1101 Introduction to Business Chapter 2

MGT1101 Introduction to Business Chapter 2

The effort of individuals to produce and sell (for PROFIT) the

Business The application of ethical principles to

MGT1101 Introduction to Business Chapter 2

Corporate Social Responsibility (CSR)

The recognition that business activities have an impact

The product must be safe for their

The Right to Be Heard

The Right to Consumer Education

The Right to Service

The Right to be Informed Consumers have the right to receive

The Right to Be Heard

The Right to Consumer Education

The Right to Service

The Right to be Informed

The Right to Choose Consumers have the right to select the

The Right to Consumer Education

The Right to Service

The Right to be Informed

The Right to Choose

The Right to Be Heard Consumers have a right to complain

The Right to Service

The Right to be Informed

The Right to Choose

The Right to Be Heard

The Right to Consumer Education Consumers have a right to know their

The Right to be Informed

The Right to Choose

The Right to Be Heard

The Right to Consumer Education

The Right to Service Consumers have the right to be treated

Let’s say that you get test results

Let’s say that you get test results

Let’s say that you get test results

Let’s say that you get test results

You believe that telling the customer is

Ethics point to standards Silent Silent (Fear)

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