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Chap002 - Chapter 02 Small Business Ethics A Key to...

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Chapter 02 - Small Business Ethics: A Key to Long-Term Success CHAPTER 2: SMALL BUSINESS ETHICS: A KEY TO LONG- TERM SUCCESS Chapter Summary This chapter defines basic ethics terms and theory. It explains why ethics is so important for small businesses and how small businesses use good ethical practices to build social capital through legitimacy. The ethical planning process is introduced, as well as a plan to handle small business crises. Learning Objectives After studying this chapter, the student should be able to: 1. Define ethics, and ethical dilemmas, and the relationship between them 2. Find out why ethics is a big part of small business 3. Understand why there aren’t any “do this” and “don’t do this” types of lists for ethical decisions 4. Learn Ethics Planning, a three step process to help you make ethical decisions 5. Learn the techniques of building social capital through legitimacy. 6. Learn the basic skills for handling a crisis Focus on Small Business: Tobin Real Estate and Development Martin Tobin, one of the owners of Tobin Realty & Development was facing an ethical dilemma. The builder he had hired found a problem and told Tobin that he’d have to pay for the extra expenses. While Tobin realized that this was probably necessary, he worried that he’d set a precedent. Of course if Tobin didn’t pay, this opened up several other problematic scenarios. Discussion Questions These will vary based on students’ initial orientations toward ethics and responsibility as well as the “stickiness” of chapter material before class discussion or lecture. 2-1
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Chapter 02 - Small Business Ethics: A Key to Long-Term Success 1. Does Tobin have any responsibility toward resolving this problem? Students’ responses will range from Tobin having no responsibility because the contract states the builder pays for all digging costs, including soft spots, to Tobin having at least some responsibility to the home buyer to get the house done well and on time. Some may respond that, due to small business’s unique position within a “visible” community (actions by small business owners are accrued to the owners themselves) they have a responsibility to maintain their excellent reputation within the community. Others may respond that, because Tobin had a good working relationship with Sarski prior to this build, they have a responsibility to help out a fellow small business owner who is having a tough financial time. Another possible response would be a short-term responsibility that a successful business might have toward a struggling one during a prolonged economic trough. 2. What are the main facts to consider when deciding what the right thing to do is? Tobin has no legal obligation to pay for the dig, but may have a contract with the buyers to have the home done within a certain time frame. Students should also consider the nature of the relationships involved to determine relevant facts. Tobin and Sarski have worked well together in the past. Sarski is having
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