13-1      Discuss the term ethics, including common elements of the definition.

There are many definitions of ethics, but they all have some common elements. The common elements include the concepts of morals, values, beliefs, and prin­ciples. These in turn lead to the need for personal integ­rity and trust in the character of another, or we won’t believe that they will act ethically if they have an oppor­tunity for self-enrichment at the expense of others.

13-2      Identify and discuss each factor required in a good code of ethics.

Values are the first factor. They “define what the company is about and make it clear that the com­pany is based on honesty and fairness.” Principles apply our values to specific situations to identify actions that we consider ethical. Management sup­port is critical because if senior managers do not pay attention to the code, others will not either. Personal responsibility identifies the fact that everyone is per­sonally accountable for their own behavior and is expected to act ethically. Finally, compliance identi­fies applicable laws and regulations that guide ethical behavior in specific industries.

13-3      Describe the “business case” for corporate social responsibility (CSR).

CSR says that organizations have a duty to all stakeholders to operate in a manner that takes each of their needs into account. All stakeholders means all—not just shareholders or executives. The busi­ness case for CSR is based on the ability of the organization to help or harm various stakeholder groups and of those stakeholder groups in turn to help or harm the company. Each stakeholder group has different—and sometimes competing—interests, but the organization must balance these “social responsibilities” among all of the groups in order to succeed.

13-4      Review the concept of sustainability in a business context.

Sustainability means meeting the needs of the cur­rent generation without compromising the abil­ity of future generations to meet their own needs. Business must practice sustainability today because so many resources are being overused to the point where they cannot be replenished and will ulti­mately disappear unless we quickly change our practices. Sustainability goals must be created and managed like any other organizational goal in order to improve business sustainability.

13-5      Define the key terms found in the chapter margins and listed following the Chapter Summary.

Complete the Key Terms Review to test your understanding of this chapter’s key terms.