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ECSR.pptxLecture Topics
Ethics
Corporate Social Responsibility
Ethics
Ethics
Ethics is an area of study that deals with ideas about what is good and bad behavior
A branch of philosophy dealing with what is morally right or wrong
Ethics is about our actions and decisions
Right vs. Wrong
Ethics
ETHICS – The moral principles, values and beliefs that govern group or individual behavior according to what is right or wrong and what contributes to the balanced good of all stakeholders.
ETHICAL DILEMMA – A situation in which no choice is entirely right
Public vs. Private Ethic
Public Ethic—what do you claim or express publicly to others about your underlying values, intentions and motivations in a particular situation.
Private Ethic—what are your true values, intentions and motivations in the situation.
Public and Private ethics may be the same (transparent) or they may be different (deceptive)
Unethical Act
UNETHICAL ACT
has immoral intent. It is done with the full knowledge that it is fundamentally wrong legally and morally.
Ethical Mistake
Ethical Mistake is a decision or action that is unintentionally unethical.
Why we make ethical mistakes -
a lack of experience in making value-based decisions
lack of comprehension regarding the consequences of their actions on society, on our organization, on our colleagues…
and an inability to articulate and act on our own values and ethics in a leadership role
Making Ethical Decisions
Impartial analysis
• Visibility – the “newspaper test”
• Generality – would all organizational members be comfortable with action taken
• Legacy – would decision maker be comfortable being remembered for action taken
Codes of conduct – organization’s published guidelines of its expectations about ethical behavior
What Ethical Issues did Lance Armstrong face?
Discuss Lance Armstrong’s public and private ethics
Did Lance Armstrong make an ethical mistake, or did he act unethical?
Wells Fargo
Wells Fargo
Cross-selling means getting customers who use one service, such as checking, to use other services, such as savings or credit cards. There is nothing wrong with cross-selling - all banks do it.
In order to encourage employees to support the program, Wells Fargo provided incentives to employees who succeeded at cross-selling.
Employees manufactured fake accounts in the names of existing Well Fargo customers.
The problem was huge. In attempting to correct the problem the company fired 5,300 employees and lost its highly respected CEO, John Stumpf.
Wrong at a massive scale.
In the face of pressure at work do people become less concerned with ethics?
Enron Code of Ethics (64 Pages)
CSUN Student Core Values Statement & Ethical Conduct Pledge
College Of Business and Economics
California State University, Northridge
The College of Business and Economics at California State University, Northridge prepares students to be ethical decision makers. The college maintains high standards of ethical conduct that students are expected to maintain throughout their academic and professional careers.
Students in the College of Business and Economics have identified the values of respect, honesty, integrity, commitment, and responsibility as their guiding principles. The following statement describes these core values.
Student Core Values:
Respect
Treat our classmates, professors, staff, and administrators with respect. We respect diversity and do not discriminate on the basis of race, color, ethnicity, religion, gender, disability, sexual orientation, age, or other characteristics. We respect different points of view that add to our knowledge. We respect our learning opportunities by behaving professionally in the classroom, and making academic achievement an important priority.
Honesty
Communicate truthfully with our classmates, professors, staff, and administrators in all academic matters while remaining respectful. We observe university policies on academic dishonesty in completing all academic work. In seeking employment, internships, and other opportunities we represent ourselves truthfully, understanding that misrepresentation may not only harm our own reputation but that of our classmates and the college.
Integrity
Maintain integrity. Because we zealously integrate these core values into our academic work and preparation for our profession, our integrity enables us to reach our goals, overcome obstacles, and successfully resolve ethical dilemmas.
Commitment
Strive for success as students, professionals, and citizens. We keep our promises, and adhere to our core values in all our activities both as students and alumni. We are committed to acting honestly, respectfully, and responsibly in our effort to achieve our goals. We understand that commitment to our core values benefits both students and the community now and in the future.
Responsibility
Embrace the responsibility we have to ourselves and to each other to maintain high ethical standards. With each task at hand comes the responsibility to uphold the core values that unite us. We support each other in our adherence to these standards. We recognize that reporting unethical conduct is a responsibility we all share.
My Pledge:
I pledge to join my classmates in upholding these core values.
(Print Name) (Signature) (Date)
Corporate Social Responsibility
Relationship Between Ethics and Corporate Social Responsibility
The main meaning of social responsibility is that it’s more of an obligation or a duty towards the people that the business affects.
Ethics is about right and wrong behavior.
What is good for the society is sometimes not good for the business, and what is good for the business is sometimes not good for the society.
Corporate Social Responsibility (CSR)
Business practices that involve accessing and taking responsibility for the company’s effects on the environment and social issues
Generally applies to corporate efforts that go beyond what might be required by regulations
Proactive approach
Programs that coordinate the company’s efforts to address societal and community challenges as they emerge
The Triple Bottom Line
Economic
Revenue
Accounting Profit
Social
Humanitarian
Responsibility
Environmental
Reuse/Recycle
Supply and Demand
Sustainability
Accountability
Going Green
How Do Managers Make a Difference?
Managers’ bottom line defined by the “3 P’s”
People – invest in the well-being of employees and provide interesting and rewarding jobs that offer the opportunity to be productive
Profit – ensure that the company is financially healthy
Planet – protect and support the environment, causes, and communities
Social Responsibility
Approaches to Social Responsibility
Proactive approach – organization goes beyond industry norms to solve and prevent problems
Accommodative approach – organization accepts responsibility and takes action in response to societal pressures
Defensive approach – organization accepts responsibility, but does only the minimum required
Reactive approach – organization denies responsibility for social problems and responds only when legally required
Social Responsibility
Social entrepreneurs – people who start a business for the dual purpose of
profits and societal benefits
Consumers and investors are becoming more active in supporting and
investing in socially responsible companies
Calvert Social Investment Fund screens
companies on financial performance and:
• Environment
• Human Rights
• Community Relations
• Governance Business Ethics
• Workplace
• Indigenous peoples’ rights
• Product safety and impact
“There is one and only one social responsibility of business — to use its resources and engage in activities designed to increase its profits.”
Milton Friedman
American Economist
1962
Criticism of CSR
Detracts from the fundamental economic role of business
Just superficial window-dressing
Pre-empts the role of governments as the watchdog over powerful multinational corporations
How CSR Programs Benefit Employers
What do employees want the companies they work for to provide for them?
Traditional benefits like health insurance (94 percent)
A competitive financial package (92 percent)
Support the issues and causes that matter to them (64 percent
And most (78 percent) say they want to be able to actively participate in helping improve their companies CSR practices
Study by Cone Communications
Corporate Social Responsibility
Patagonia
Tom’s Shoes
Apple Computer
Nestle
Patagonia
Environmental & Social Responsibility
PATAGONIA'S MISSION STATEMENT
Our values reflect those of a business started by a band of climbers and surfers, and the minimalist style they promoted. The approach we take towards product design demonstrates a bias for simplicity and utility. Our mission is to build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis
Record-breaking Black Friday Sales to Benefit the Planet
We’re humbled to report the response was beyond expectations: With your help, Patagonia reached a record-breaking $10 million in sales. We expected to reach $2 million in sales—we beat that expectation five times over. The enormous love our customers showed to the planet on Black Friday enables us to give every penny to hundreds of grassroots environmental organizations working around the world.
Toms Shoes
Toms Shoes
Apple Computer
Apple Computer
“How can a company that is this extraordinary in other respects be missing in action on corporate social responsibility?”
Forbes Magazine
Economic
Social
Environmental
More than 90 percent of Apple’s products – including the iPhone, iPad and Mac computer are assembled in China
Labor practices and working and living conditions at factory-owned dorms came under scrutiny after more than a dozen workers committed suicide starting in 2010
Average worker salary $1.78 per hour
Foxconn
Foxconn
Foxconn
Other Factories
iPhone 7 (2016)
Price $649 for 32GB
Material costs $219.80
Labor costs between $5.00 per phone
Total build $224.80
Tim Cook states these costs are not accurate. There are other expenses not captured in these numbers.
Apple X iPhone
2017 report
3,000 student interns were “forced” to work at Foxconn in order to graduate from their high school
Factory hires students every year during the busy season between August and December. Such hiring increases the number of employees from 100,000 to more than 300,000 workers
Produce up to 20,000 iPhones a day
One person can assemble 1,200 iPhone cameras per day
Financial Times, Yuan Yang in Zhengzhou, NOVEMBER 21, 2017
China Labor Watch
Apple Computer
Earlier this year, the Justice Department filed a lawsuit against Apple, seeking the company's help in unlocking the iPhone 5c used by San Bernardino attacker Syed Farook. Apple declined the request even after a judge said it would need to create software to let the FBI unlock the smartphone. In an open letter, Apple CEO Tim Cook argued that user privacy was at risk and opening one iPhone could open the floodgates to the FBI accessing other users' smartphones. He added that he was willing to take the fight to the U.S. Supreme Court.
Fortune Don Reisinger
WATER
Water
Comprise 71% of earth
60% of the adult body
Water business grosses $600 billion annually
Is clean water a human right?
What are the 3 Things Most of the World Cannot Do?
Nestle Water
Nestle
Owns 70 of the bottled water companies
At one site in Michigan they pump 450 gallons per minute
Nestle does not pay for this water
Estimated profits from this pumping site is $1.8 million per day
Nestle Tim Brown, Nestle North America CEO
In response to CA drought
"If I stop bottling water tomorrow, people would buy a different brand of bottled water. We see this everyday," Brown told KPCC. "In fact, if I could increase [bottling], I would.”
Brown claims the company has complied with all regulatory agencies
Bottling water still takes 30% to 50% more water than turning on the tap
Is this really an environmentally, ethically correct thing to be doing right now?
CEO Activism
http://superadsdb.com/ad/3179/stella-artois-water-org-taps
http://superadsdb.com/ad/3195/budweiser-stand-by-you
2017
Bank of America’s CEO, Brian Moynihan, told the Wall Street Journal. “It’s not exactly political activism, but it is action on issues beyond business.”
CEO activism has gotten lots of media attention
Public relations firms are now building entire consulting practices
Super Bowl Ads
2018
