Business Ethics and Social Responsibility

Ethics:
* Rules that help us define the difference between right and wrong and encourage us
to do the right thing
* Can be influenced by our background, cultures, religions, education, etc
* Ethics are not the same as laws
* Something may be ethical, yet illegal
* Something may be unethical, yet legal

What’s ethical behavior:

* The way a person conducts themselves that conforms to individual beliefs and
social standards about what is right and good
* Values: tell us what is important and help us make decisions about the right and
wrong
* E.g. Trustworthiness, respect, responsibility, caring, justice, and good
citizenship
* Morals: rules we use to decide what is good or bad
* E.g. a moral is that stealing is bad because it harms others

What role should ethics play in business?

Business ethics are based on society’s ethics and those of the people who work for
and buy from the business
* Code of ethics: a document that explain specifically how employees should respond
in certain situations
* Canadian laws address acceptable business behaviours; however, businesses can
still behave unethically without breaking these laws

Ethics will include:

* Honesty
* Integrity
* Fairness
* Respect for stakeholders (those who will be impacted)

Ethical Dilemma:
* A moral problem where a difficult choice must be made between potential right and
wrong
* Who will be helped or hurt by what you do?
* What are the benefits and problems of the decisions?
* Will the decision survive the test of time?
* Involves weighing profitability and competitiveness against values and morals

* Examples:
* Downsizing of staff
* Pollution control
* Allocation of scarce resources
* Employee rights
* Discrimination against women and minorities
* Product safety

Revolving Ethical Dilemmas:

* Whistle-blowing: when an employee informs officials or the public about an
illegal or ethical violation
* Issues a business may be reported for include
* Submits false information on an expense report
* Ignores hiring procedures for minorities
* Does not observe mandated health codes

Social Responsibility
What is CSR?
* A business exhibits corporate social responsibility through its values, ethics,
and the contributions it makes to communities
* Driven by a desire to protect customers and to treat employees and shareholders
fairly

CSR Principles
1. Providing a safe and healthy work environment (e.g. employee wellness program,
fitness facilities, health and safety committees)
2. Adopting fair labour policies (e.g. paying employees above minimum wage or
offering flexible hours)
3. Protecting the environment (e.g. making the company greener)
4. Being truthful in advertising (e.g. ensuring advertising doesn’t contain
deceptive claims or illustrations)
5. Avoiding price discrimination (e.g. using the manufacturers suggested retail
price - MSRP)
6. Donating to charity (e.g allowing charitable payroll deduction programs and
hosting charitable events)

Duty to Report
Must disclose all important information to shareholders, partners, lenders,
insurers, communities, regulators, consumers, employees, and investors - otherwise
they could be charged

Laws the Govern Corporate Ethics

Anti Discrimination:
* Glass ceiling - is an invisible barrier to attaining senior leadership positions
* Employees all have a right to work in a setting where they are not singled out or
treated differently because of race, gender, religion, or sexual orientation

Harassment:
* Behaviors that are found to be threatening or disturbing and are not acceptable
in society
* Many businesses have policies and procedures for dealing with complaints
* Examples: bullying, stalking, disability and race related issues, sexual
orientation
* Can be in both written and verbal form

Accessibility:
* Duty to accommodate - requires employees to take appropriate steps to eliminate
discrimination against employees. It is apart of the Human Rights Act
* An employee who has been denied accommodation can file a complaint and it may
result in legal action against the business
* Businesses sometimes have difficulty accommodating disable worked because there
are so many different disabilities

Environmental Responsibility:
* If businesses keep taking from the environment all of our resources will be
depleted
* Categorized under air, land, and water
* Canadian Environmental Protection Act
* Laws and regulations were put into place to prevent future environmental disaster
* Can be controversial because people disagree about what needs to be done and how
to do it.
* Requires businesses to make sacrifices.
* For example: reducing air pollution may require new expensive equipment.

Business and the environment:

* Many businesses have contributed to ongoing environmental problems but may have
contributed to pursue solutions
* The problem is that corporate resources spent on environmental goals is never
equal to what is spent trying to make profits
* When a company's reputation is at stake they will tend to invest more to help in
hopes of attracting more customers and generating more profit
* Dealing with environmental issues has come about from government push and
environmental groups

Labour Practices:
* Employment standards act: set out certain mandatory minimum conditions of
employment
* Governs hours, overtime, minimum wage, holidays, vacation pay, benefits, parental
leave, termination, etc
* There is pay equity legislation to prohibit employers from paying employees of
one sex differently that the other sex who perform the same job
* Economists estimate that 20 to 30 percent of the gap in pay is due to
discrimination towards women in the workplace

Workplace safety:
* OHSA - Occupational Health and Safety Act
* Instituted to ensure workplace safety and health and defines the rights and
responsibilities of workers
* Workers have three basic rights in the workplace:
* The right to refuse unsafe work
* The right to participate in workplace health and safety
* The right to know about the actual hazards in the workplace
* Workers can get sick in office positions from poor air quality, stress, and
equipment related issues
* Some companies offer wellness programs

Forms of Compensation
* Compensation is the amount you are paid
* The amount owed will take into consideration the following
* Income tax deduction
* Employment insurance
* Union dues
* Pension contributions
Hourly Wages
* Most common especially for part-time employees
* Minimum Wage: lowest hourly wage an employer can pay an employee
* Overtime: increased rate of pay is the employee works more than regular hours or
if they work on a holiday

Salary
* Fixed amount of money that employees receive on a regular schedule such as weekly
or monthly
* Normally done on a yearly basis
* Ex. an accountant is pais $110,00 annually regardless of hours worked, is an
employee works more hours no overtime is paid

Straight Commission
* Commission: paid in addition to salary or hourly wage
* Incentive encouraging employees to work harder
* Ex. an employee may earn 5% for every sale they make, the more sales they make
the more commission they make
* Some jobs are only commission based. Ex. Real Estate Agent

Incentive Bonus
* Bonus is a reward for good performance
* Some employers set sales quotas for each employee and is they meet the goal they
receive extra cash, trip, or something else of value
Performance Based Pay
* Pay is calculated on the amount of a particular product that an employee can male
* Employees can set their own pace or even work from home in some cases
* Also known as piecework

Fee for Service

* Estimating how much it will cost in time and materials and then build in an
additional fee to ensure they earn a profit
* Ex. construction
* A written contract is usually signed to prevent misunderstandings

Royalty or Licensing Fee

* Payment for use of ideas and creativity
* Ex 1: You created a successful cartoon character that a company wants to put on
their t-shirts. You can rent the character for the company for a portion of each t-
shirt sale. Usually a small amount between 1-5 percent.
* Ex 2: A fixed rate is set to use the character regardless of the number of sales.

Stock Option
* Option to purchase company shares at a discounted rate
* Employees who own a share of the business often work harder and stay longer
* Human Resources
* Coordinates all activities involving the companies employees
* Small businesses will have managers who perform these functions everyday
* Larger companies will have an entire department dedicated to this
The Labour Market - where employers and employees meet

Types of labour:
* Unskilled labour - little training required (ex. dishwasher)
* Semiskilled labour - requires some instruction (ex. cashier)
* Skilled labour - required training from previous employment or education
institution (ex. Cake decorator)
* Professional labour - highly trained people with specific occupations (ex.
accountant)
Determining the need for a new employee
* Hiring employees is a long process
* Businesses want to ensure they hire the right people to avoid wasting time and
money
* The Human Resources (HR) department will:
* Help the businesses to create a staffing plan to avoid hiring under pressure
* Forecasts a company’s employee turnover : the rate at which employees leave a
company for another job or retire
* Job searches usually begin internally (looking to promote from within the
company) by checking employee records for service length, training, and performance
evaluations

Possible external recruitment sources used by HR:

* Notices at universities or colleges
* Postings on job banks at government employment centers
* Online recruiting websites, such as Workopolis
* The company’s own website

* Employment and Social Development Canada (ESDC):

* A department of the federal government responsible for workforce issues and
programs
* Headhunter:
* A term used for a recruitment agency or executive search companies

Hiring Process
HR is required to:
* Create a job application
* Interview applicants
* Select successful candidates
* Offer the job to the successful applicant
* Ensure appropriate paperwork is completed

Job Training
* Orientation: the time when new employees tour the workplace, meet other co-
workers, and receive training on equipment or new technology
* The HR department also introduces business policies on compensation, work hours,
benefits, rules of behaviour, dress code, health and safety procedures, etc

Keeping Good Employees

* It is for costly for businesses to search for, hire, and train new employees, so
most businesses take steps to retain good employees
* New employees are less productive, meaning less profitable
* Some businesses offer employees perks - special benefits beyond ordinary
compensation - to attract and retain them
* Perks can include a casual dress code, daycare services, on-site gym facilities,
massage therapists, special food, etc

Departures
* Because businesses need to protect their reputation, HR tries to ensure a smooth
transition when it comes to departures: when employees leave the business,
regardless of the reasons for the departure
* During an exit interview, the employee may discuss their future goals, provide
some feedback about the workplace, and suggest ways for improvement

Dismissals
* Occur when an employee is asked by the company to leave his or her position
* Corrective interviews: interviews with an employee who is having difficulties,
where problems are discussed openly and a plan for improvement is made
* Is improvements are not shown, the employee may be dismissed
* Can occur due to lateness, absenteeism, poor work habits, etc
* Outplacement counseling : offers terminated employees ways to find new jobs
* Dismissing staff to reduce expenses is called employee layoffs
* Companies with unionized employees usually lay off workers in order of seniority,
which is the length of service with a company
* Severance package : final compensation paid to a laid off or terminated employee
* Usually based on the amount of time employees has workers for a business

Retirements
* Occurs when an employee voluntarily withdraws from the labour market, usually
after already having worked for a number of years,
* Throughout the time an employee works for a company, they and the company may
contribute to a pension that the retiree receives as an income ones he or she no
longer works for the company

Employability Skills
1. Technical Skills
* Specific to a job
* Ex. an accountant needs to create and interpret financial statements
* Some jobs provide training for the skills that are necessary
* Some jobs require you to have the necessary skills before you are hired
* Some technical skills can be learned in school
2. Communication skills
* Effective speaking, listening, and writing skills
* Share ideas with team members
* Write emails
* Listen
* Answer customer inquiries
3. Interpersonal Skills
* Work cooperatively with others to achieve a goal
* Group projects
* Respecting different perspectives
* effective teamwork

4. Problem Solving Skills

* Think critically to evaluate situations, solve problems, and make decisions
* Determine a problem
* Establish and implement
5. Information Technology Skills
* New
* Use technology effectively to communicate
* Understanding which sources are useful and credible
* Use business software applications like Microsoft or Google
6. Adaptability Skills
* Open to change
* Willing to adjust as needed
* Ex. learning a new software or taking on a new role when required
7. Lifelong Learning
* Ability to continue to educate yourself and update your knowledge and skills
* Important because things are always changing
* Involves: being curious
Professionalism
* Your work ethic - Meeting deadlines
* Being punctual - Dressing appropriately
* Being respectful - Being responsible
The Hiring Process
* A high school education is usually the minimum requirement for entry level jobs
* These entry level positions are often the first steps towards higher level
positions
* university , college, and apprenticeship programs that are offered through post
secondary
Process
* One of the most important tasks for a business
* Allows companies to find the right employees who will contribute positively to
their goals
* Hiring the right person is not just about filing a open slot
Job Posting
* The company identifies the responsibilities, required skills, and qualifications
for the position
* This information helios creating a job description, which outlines roles,
necessary skills and responsibilities
* Ones the job description is created, companies post the job online or in
newspaper
* A good job posting should be clear and specific about what the company expects
from candidates

Screening and Shortlisting

* Screening: is the process of reviewing each resume to identify candidates who
meet the basic qualifications
* Shortlisting: is then done to narrow down the applicants to those who seem like
the best fit based on their experience, skills and achievements

Interview Process
* Key part of the hiring process
* Allows the company to learn more about each candidate, their experiences, and
their personality
* There are different types of interview
* One-on-One Interviews: a single interviewer who speaks with the candidate
* Panel Interview: several interviewers
* Group Interview: multiple candidates are interviewed at once, allowing the
company to observe how candidates interact with each other
Tips
* Dress appropriately
* Arrive a few minutes early
* Give a firm handshake
* Smile and make eye contact
* Listen to questions and answer

Test and Assessments

* In some cases, companies give tests or assessments to see if the candidate has
the required skills
* Ex. a company hiring for a coding job may test the candidates programming skills

Reference Check
* Involve contacting people the candidate has worked with in the past, like former
employee, to verify their skills, experience and reliability

Job offers
* After selecting the best candidate, the company, makes a formal job offer, which
includes details about the role, salary, and benefits
* If the candidate accepts, they join the company