1. Business Ethics:
Ethical Decision Making and
Cases, Seventh Edition
O.C. Ferrell
University of New Mexico
John Fraedrich
University of Wyoming
Linda Ferrell For in-class note taking,
University of New Mexico choose Handouts or Notes
Pages from the print options,
with three slides per page.
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2. Chapter 1
An Overview of
Business Ethics
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3. Business Ethics
• Comprises principles and
standards that guide
behavior in the world of
business
• Right or wrong, acceptable
or unacceptable behavior
within the organization
• Determined by you and
key stakeholders
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4. Social Responsibility
• Obligation a business assumes toward
society
• Designed to maximize the positive influence
and minimize the negative
• Includes economic, legal, ethical, and
philanthropic dimensions
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5. Why Study Business
Ethics and Social Issues?
In a National Business Ethics Survey,
employees perceived misconduct in these
types of organizations:
• For profit 31%
• Government 38%
• Nonprofit 29%
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6. Business Ethics
Development
Before 1960
U.S. politics:
• A living wage
• The New Deal
• The Fair Deal
Theology’s domain
Philosophy’s domain
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7. The 1960s
The Great Society
• Consumer’s Bill of Rights
• Ralph Nader
• Wholesome Meat 1967
• Radiation Control 1968
• Clean Water 1972
• Toxic Substances 1976
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8. The 1970s
Corporate Social
Responsibility
• Bribery
• Deceptive advertising
• Price collusion
• Product safety
• The environment
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9. The 1980s
• Organized field of study
• Business ethics centers
• Business ethics courses
• Defense industry initiative
• Multinationals
• Self-regulation (Reagan/Bush)
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10. The 1990s
The U.S. and Clinton
• Free trade
• Self-regulation
• Federal Sentencing Guidelines for
Organizations (FSGO)
• More multinationals
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11. Federal Sentencing
Guidelines for
Organizations
• Standards and procedures (code of ethics)
• High level oversight
• Care in delegation of authority
• Effective communication (training)
• Systems to monitor, audit, and report
• Consistent enforcement
• Continuous improvement
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12. The 21 st Century
• Sarbanes-Oxley Act
• NAFTA
• Mercosur
• WTO
• Caux Round Table
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13. Common Unethical Acts
• Insider trading of stocks and bonds
• Bribery
• Falsifying documents
• Deceptive advertising
• Defective products
• Employee theft
• Questionable activities of online companies
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14. Benefits of Business Ethics
• Better ethical climate
• Employee commitment and trust
• Investor loyalty and trust
• Customer satisfaction and trust
• Long term profits
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