Human Resource Management Chapter 2

“Business Ethics & Social Responsibilities”

Part 1 – Introduction to Social Responsibilities and Business Ethics

Focus point:

• What is the meaning of “Business Ethics” & “Social Responsibilities”?

• What kind of responsibilities do businesses have, towards their stakeholder?

• Why are these important?

Definitions:

a) Social responsibilities … are duties that a business owes to those affected by its activities.

b) Business ethics … is the influence of values and beliefs upon the conduct and operation of businesses, i.e. about morality and doing ‘what is right’ and not ‘what is wrong’.

… “Why is it important that businesses should conduct ethical behavior?”…

Businesses are often said to be run for the benefit of their owners, i.e. their “shareholders”. However, other “stakeholders” are also an important part of business decision making because it is argued that businesses have “Social Responsibilities” towards them. As such, businesses should act in a responsible and ethical manner and consider the possible effects of any decisions they make.

“So…what kind of social responsibilities do businesses have, towards these stakeholders?”

As we should know, businesses do not operate in isolation, they are actually a “part of society” who has an impact upon the lives of those communities in which they operate. And therefore…

*** A firm which is ethical with regard to the society as a whole and the community within which it is based might be described as “Socially Responsible”***

Here are some examples where firms can show their ethical behaviors, these can be…

✓ …To their “Customers”:

Businesses have responsibilities to their customers, e.g. to sell them a well made product which is reasonably priced.

✓ …To their “Suppliers”:

An ethical firm should act fairly to their suppliers, e.g. paying reasonable prices for products. They should also respect contracts which they have signed with suppliers.

✓ … To their...