B. OVERVIEW OF SMALL BUSINESS

2.00 Explain the basic concepts leading to success in small business entrepreneurship.

2.03 Discuss the importance of ethical behavior in business.

Created by:

D. Burns, J. Bailey, J. Loudell, J. Winfree

Ethics

Guidelines for human behavior; the study of moral choices and values; choosing between right and wrong.

Ethical behavior

Knowing the difference between right and wrong and consciously choosing to do right.

Code of ethics

A systematic set of rules and procedures used to guide the behavior of an individual, a business, or a culture.

Business ethics

Applying principles of right and wrong to situations in the workplace.

The Risk of Business as Usual

• • Companies are put at risk when leaders fail to see that ethical leadership is vital for effective & responsible management Poorly managed corporate risk/ethical decisions have irrevocable human & financial consequences – Deaths & accidents from the unintended acceleration in Toyota vehicles – Deaths of oil platform workers in the BP explosion & subsequent environmental catastrophe in the Gulf of Mexico

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Factors impacting risk assessments

Perception – How you see things – Is cheating ethical or unethical?

• If you consider it ethical in some situations – why?

• Emotions – – If your family has no food – do you steal food from the grocery store?

Known vs. Unknown information – Using a photo without knowing if it is copyrighted or not

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Factors To Consider when Assessing Risks

Time – “Time is Money” – Coming in to work 5 minutes late or leaving early Probability – The chance that the outcome will be negative – If I speed, what are the chances I’ll get caught Magnitude – The number of people affected – Oil spill in the Gulf of Mexico Cost vs. benefit – human & financial Physical & Personal distance – How might this decision affect you personally

Ethical responsibility towards customers

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Treat all customers with respect.

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Be honest.

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Do not exaggerate the merits of your products/services.

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Inform customers of possible dangers of your products/services.

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Handle all disputes fairly.

Ethical responsibility towards employees

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Establish an ethical workplace.

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Hold yourself to high ethical standards

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Serve as a role model to others

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Always treat employees fairly & honestly

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Employees tend to copy the behavior of the business owner

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Ethical behavior gains the trust & respect of customers

Ethical responsibility towards employees

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Create a written code of ethics to set guidelines to help the business owner and employees make ethical decisions.

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Establish company policies and procedures to let business owners and employees know how to act in certain situations. Have employees attend an orientation meeting on this information

Ethical responsibility towards the community

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Contribute money to charities, cultural institutions, and other reputable causes.

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Get involved.

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Donate products and services.