Ethics notes Ch. 9+
Chapter 9: corporate Social Responsibility
Why be socially responsible?
* The relationship between the firm and its environment (external stakeholders) is critical to a business’ success and strategy
* Circle with an F in it with an e outside of it
* F=firm, e=environment (everything outside of the firm)
* For firm to survive, must have a good relationship with everything outside
* Internal ethics and external social responsibility are overlapping and based on many of the same values
* Same values that drive you to be ethical drive you to be socially responsible
* 3 broad reasons for businesses to be socially responsible (from text)
* If you use your power irresponsibly in a society, you risk losing it or being attacked by your stakeholders
* Ex. Arthur Anderson. Irresponsible, and thus forced to close down.
* Ex. Chik Fil a – gay rights. Attacked by stakeholders
* If businesses are not socially responsible, it encourages government to create more regulation and get more involved in business.
* Businesses have a responsibility to act ethically and care about stakeholders regardless of the economic payoff.
* Ex. Back in early 1900s, 1920s, ford was known for being pretty philanthropic. Powerful shareholders on board of directors including the Dodge brothers got mad at Henry ford spending all this money on philanthropy. They thought he had a fiduciary responsibility to pay the shareholders. They sued, went to supreme court, they ruled that the business of business is business and agreed with the dodge brothers.
* Foolish decision. There are paybacks to helping the community.
* Look at your core values and not just the bottom line.
* Back in the 80s, general motors was the larges car company. Replaced CEO with new CEO. He was an...