Chapter Summary

13.1 Discuss the term ethics by stating the 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 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.”[i] 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 Contrast the concepts of equal employment opportunity, affirmative action, diversity, and inclusion.

Equal employment opportunity deals with a series of laws and regulations put in place at the federal and state government levels that must be obeyed. Affirmative action, except in a few circumstances, does not have the effect of law. Therefore, affirmative action is a much broader concept based on policy than is EEO, which is more narrowly based on law.

Diversity and inclusion are not law, nor necessarily even policy within organizations. Diversity initiatives are designed to get diverse people to work well together and better serve diverse customers. Inclusion initiatives focus on ensuring that all employees feel they belong as valued members.

13.4 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.

13.5 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.

[i] K. Leonard, “What Are the Key Components of a Code of Ethics in Business?” Houston Chronicle,, (retrieved Nov. 23, 2018).