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03.31.09 Ethics and Social Responsibility 09

03.31.09 Ethics and Social Responsibility 09 - Ethical and...

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Ethical and social responsibilities of business responsibilities to shareholders, managers, employees, consumers and society reconciling conflicting interests of stakeholders between shareholders, society and future environments between shareholders and employees. Ethical and Social responsibilities of Business. Internal Stakeholders Shareholders / owners Management Employees External Stakeholders Customers Suppliers Environment Government Society Shareholders, society and future environments Owning shares –  short  term, owners are called speculators they want a quick return/profit. Owning shares –  long  term ( for profit), owners still want the business to act responsibly. Business Expansion – Impacts society and future generations – this can happen in a positive and negative way. Triple bottom line -  means that the business reports on its economic, social and environmental performance in company reports. Shareholders and  their company to increase in value therefore long term growth and survival. Shareholders versus employees.  There are schemes where employees have the ability to own share in the company that they work for. Therefore it is hoped that they stay working for  the company longer. Training and development – it is hoped that a company educating their employees and increasing their skills that they will work more efficiently and  decrease production costs.
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Important Terms Ethics – application of moral standards to business behaviour Corporate Code of Conduct – a set of ethical standards for managers and employees to follow Social Responsibility – includes the obligations a business has towards the community, above and beyond making a profit, obeying laws or completing contracts Sustainability - development that meets the needs of the present without compromising the ability of future generations to meet their own needs Activities: Write a brief summary of the 4 common ethical issues facing a business (pg 117) 1. Fairness and honesty: businesses must obey laws but they should also be honest in business dealings and avoid misrepresenting the truth 2. Communications: businesses must be very careful when communicating that they avoid misleading other parties e.g. using misleading terms in advertisements such as ‘special’
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