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Chapter Review

Key Takeaways

  1. Corporate social responsibility (CSR) is a business model by which companies make a concerted effort to operate in ways that enhance rather than degrade society and the environment.
  2. The United Nations’ Sustainable Development Goals (SDGs) are a set of 17 goals that aim to achieve peace and prosperity for people and the planet.
  3. Companies can be “socially responsible” in considering the claims of various stakeholders: Owners and Investors, Managers, Employees, Customers and Communities.
  4. Managers have what is known as a fiduciary responsibility to owners: they’re responsible for safeguarding the company’s assets and handling its funds in a trustworthy manner.
  5. Customer rights include the right to safe products, the right to be informed about a product, the right to choose what to buy, and the right to be heard.
  6. Carroll’s Pyramid is a well-respected resource for situating corporate social responsibility. In this model, the focus is on managers—not owners—as the principals involved in the company’s relationships with its stakeholders.
  7. Economic corporate responsibility refers to the practice of making financial decisions based on a commitment to doing good.
  8. Businesses have legal responsibilities to comply with laws and regulations at the local, national, and international levels. Business law refers to rules, statutes, codes, and regulations established to provide a legal framework within which business may be conducted. Legal compliance refers to conducting a business within the boundaries of all the legal regulations of that industry.
  9. The Canadian Charter of Rights and Freedoms is a binding legal document that protects the basic human rights of all Canadians, such as fundamental freedoms, democratic rights, mobility rights, legal rights, equality rights, and language rights.
  10. The Canadian Human Rights Act extends the law to ensure equal opportunity to individuals who may be victims of discriminatory practices based on a set of prohibited grounds (e.g., gender, disability, or religion).
  11. Employment-related legislation covers the following subjects: employment standards, human rights, federal and provincial privacy, occupational health and safety, workers’ compensation, and labour regulations legislation. Employers must obey laws governing minimum wage and overtime pay. A minimum wage is set by the provincial government.
  12. In Canada, workplace health and safety are governed by several key pieces of legislation designed to protect workers and ensure safe working environments: Canada Labour Code, provincial and territorial health and safety legislation, occupational health and safety regulations, and workers’ compensation legislation.
  13. The Employment Equity Act states that no person shall be denied employment opportunities or benefits for reasons unrelated to ability. It seeks to improve the employment conditions experienced by women, Indigenous peoples, persons with disabilities, and visible minorities.
  14. Many large corporations support various charities, an activity called philanthropy. Philanthropic responsibility is a business’s commitment to improving society through charitable activities, community support, and social initiatives. It’s a key aspect of corporate social responsibility (CSR), and it emphasizes that businesses should not only focus on profit-making.
  15. Corporate Social Responsibility (CSR) is typically measured through a combination of quantitative and qualitative metrics that assess how well a company is meeting its social, environmental, and ethical obligations. Different organizations use various frameworks, tools, and reporting standards to evaluate CSR performance.
  16. Greenwashing refers to the practice of misleading consumers or stakeholders into believing that a company, product, or initiative is more environmentally friendly or sustainable than it actually is.
  17. ESG stands for Environmental, Social, and Governance. It refers to a set of standards used by businesses to evaluate and address their impact on the world, beyond just financial performance.
  18. The FTSE4Good Index Series is designed to measure the performance of companies demonstrating specific Environmental, Social and Governance (ESG) practices.
  19. Ethics is the philosophical discipline concerned with what is morally good and bad, and morally right and wrong. Businesses have ethical responsibilities to ensure fair practices and treat customers, employees, and stakeholders with respect.
  20. Ethical issues are the difficult social questions that involve some level of controversy over what is the right thing to do.
  21. An ethical lapse is a mistake or error in judgment that produces a harmful outcome. It is a failure to follow proper ethical principles.
  22. Ethical dilemmas are situations in which it is difficult for an individual to make decisions either because the right course of action is unclear or carries some potential negative consequences for the person or people involved.
  23. An ethical lapse in honesty and integrity occurs when an individual, organization, or company fails to uphold fundamental ethical principles, such as truthfulness, transparency, and adherence to moral standards. It typically involves actions or decisions that prioritize self-interest, convenience, or profit over fairness, accountability, and ethical responsibility.
  24. Conflicts of interest occur when individuals must choose between taking actions that promote their personal interests over the interests of others or taking actions that don’t.
  25. Conflicts of loyalty can arise when individuals in leadership positions prioritize personal gains over their professional obligations, leading to ethical and legal repercussions.
  26. A gift intended to maintain goodwill or celebrate a partnership might be ethical if it’s modest and transparent. However, lavish or undisclosed gifts designed to influence decision-making cross the line into bribery.
  27. A whistleblower is someone who reports waste, fraud, abuse, corruption, or dangers to public health and safety to someone who is in a position to rectify the wrongdoing.
  28. Creating an ethical business environment involves adherence to laws and regulations, strong corporate governance, and proactive efforts to ensure the well-being of employees, customers, and the community. 
  29. Sexual harassment occurs when an employee makes “unwelcome sexual advances, requests for sexual favours, and other verbal or physical conduct of a sexual nature” to another employee.
  30. In addition to complying with equal employment opportunity laws, many companies make special efforts to create an inclusive workforce by recruiting employees who are underrepresented in the workforce according to sex, race, or some other characteristic.

Download the “Chapter in Review” for
Chapter 5: Ethics and Social Responsibility [PDF].

End-of-Chapter Exercises

 

  1. Corporate Social Responsibility (CSR). Use the Internet to research a company’s corporate social responsibility efforts (e.g., Leons, Home Depot, Starbucks, PepsiCo, or other). What action does the company take toward CSR? What is the reaction of the stakeholders to the company’s CSR strategy? Share your findings with the class and/or the professor.
  2. Ethical Crisis. Use the Internet to search for an example of a business having an ethical crisis (similar to the Tylenol crisis discussed in the chapter). What did you find? Did anyone get hurt? What was the court ruling? Was this fair in your opinion? How could this have been avoided? Discuss with a partner, the class, and/or the professor.
  3. Greenwashing. Use the Internet to research the characteristics of greenwashing. Provide an example of a company that has been found greenwashing. Why does greenwashing happen? How can consumers identify greenwashing? Discuss with the class and/or the professor.
  4. CSR Rankings. Use the Internet to locate a ratings and rankings website that ranks companies based on their CSR efforts. Which companies are ranked best and worst? Why? Share your findings with the class and/or professor.
  5. Pondering Ethics. Assume you are a manager and, as the manager, you feel you have the right to take home office supplies (e.g., printer paper, pens, binders, coffee packs, etc.). Recently you noticed that your employees have begun doing the same. What should you do? Discuss with a partner, the class and/or your professor.
  6. Personal and Business Ethics. Where are the boundaries between personal ethics and business ethics? Are there rules to indicate where one begins and the other ends? Should there be? Discuss with a partner, the class and/or the professor.
  7. Charter of Rights and Freedoms. Use the Internet to research what the Charter includes. How has this affected you  personally? Discuss with the class and/or professor.
  8. Codes. What is your college or university’s code of conduct, academic honesty code, or other ethical behaviour code? What are the expectations of behaviour outlined in these codes? How are they enforced? Do you think these codes are working? Why or why not? Discuss with a partner, the class and/or the professor.
  9. Stakeholder Responsibilities. Non-profit organizations, such as your college or university, have social responsibilities to their stakeholders. Identify the stakeholders at your school and for each category of stakeholder indicate the ways your school is socially responsible to that group. Discuss with a partner, the class and/or professor.
  10. Write a Personal Code of Ethics. Write a personal code of ethics. What will you put into it? What’s important to you? Identify your core values, principles, and guidelines for how you want to live and make decisions. Visit Indeed’s Career Guide for examples if you need a little help getting started. Discuss with a partner, the class and/or professor.
  11. Corporate Ethics. Visit two of the following company websites: Boeing, Apple Inc., Toyota Motor Corporation. Compare and contrast the companies’ code of ethics, mission, vision, values and code of conduct. Based solely on each company’s ethical conduct, mission, and values, which company would you rather work for? Why? Discuss with a partner, the class and/or professor.
  12. Volunteerism. You don’t have to wait until you graduate to start demonstrating your social responsibility. Volunteering in your community or at your school is a great way to gain experience, make contacts, and do something good. Employers like to hire people who have given back to their communities. Visit Volunteer Canada and find an organization in your area looking for volunteers. What opportunities are there for volunteers? What are the current trending issues? What is the Canadian Code of Volunteer Involvement? List a couple organizations in your province or territory that have adopted the code. Share your findings with the class and/or the professor.
  13. Company Research. Choose a Global 500 company from Fortune magazine’s annual ranking for last year (or your professor might assign a specific company). You will submit a short report (formatted as instructed) to your professor with answers to the following questions:
    • Does the company’s vision or values statement discuss the environment or treatment of people? Provide details.
    • Does the company have a code of ethics? If so, what is it?  If not, does the mission statement or vision statement mention ethical values? Provide details.
    • Has the company been in a news scandal? If so, what was it about? Provide details.
    • Has the company had an ethical lapse? If so, what was it about? How did the company recover? Provide details.
    • Does the company engage in philanthropy? Provide details.
    • Is there anything in the news that contradicts the image the company is trying to portray?

Self-Check Exercise: Ethics, Law, and Social Responsibility Quiz

Check your understanding of this chapter’s concepts by completing this short self-check quiz.

Additional Resources

 Attributions

This chapter compiles content from various Open Educational Resources (OER). For details, please refer to the Attributions page.

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