1 Understand the relationship between ethics and the law

1. The Nature of Ethics
   1. Ethical dilemmas – the need to decide what is the "right thing" to do in a given situation
      1. Ethics – the moral principles used to decide what is right or wrong
   2. Ethics and the law – laws specify what people can and cannot do in a society and convert ethical decisions into legal decisions

2 Appreciate why it is important to behave ethically

3. Changes in ethics over time – what is considered ethical in one generation may be considered unethical in later generations

3 Differentiate between the claims of the different stakeholder groups that are affected by managers and their companies' actions

2. Stakeholders and Ethics
   Stakeholders are the people and groups affected by the company's decisions.
   1. Stockholders – purchase stock in the company and become part of the owners of the company
   2. Managers – decide the goals of the company the way in which the resources of the company will be used
   3. Employees – expect that they will be rewarded by their performance
   4. Suppliers and distributors – expect to be paid fairly for their inputs and distribution of the company's products
   5. Customers – expect to buy quality products at a fair price
   6. Community, society, and nation – decisions made by managers at companies affect all of societies in which the company operates

4 Describe four rules that can be used to help companies and their managers act in ethical ways

3. Rules for Ethical Decision Making
   1. Utilitarian rule – a decision is ethical if it produces the greatest good for the greatest number of people
   2. Moral rights rule – a decision is ethical if it protects the fundamental rights of the people who are affected by the decision
   3. Justice rule – a decision is ethical if it benefits and harms people and groups in a fair and impartial way
   4. Practical rule – a decision is ethical is the typical person in the society would think it is an acceptable decision

5 Identify the four main sources of managerial ethics

4. Why Should Managers Behave Ethically?
   If everyone acted unethically, chaos would result in a society

6 Distinguish between the four main approaches toward social responsibility that a company can take

5. Ethics and Social Responsibility
   1. Societal ethics – the standards that govern the members of the society in how they deal with one another
   2. Occupational ethics – the standards that govern the members of a profession or trade in how they should conduct themselves at work
   3. Individual ethics – personal standards of behavior that determine how an individual should act toward others
   4. Organizational ethics – beliefs about how a company should act toward its stakeholders
6. Approaches to Social Responsibility
   Social responsibility refers to the way managers see their obligation to make decisions that promote the welfare of stakeholders and society as a whole
   1. Four different approaches
      1. Obstructionist approach – managers decide not to act in a socially responsible way and try to hide their behavior from others
      2. Defensive approach – managers act within the law but only do what the law requires
      3. Accommodative approach – try to balance the needs of different stakeholder groups against one another
      4. Proactive approach – companies go out of their way to learn the needs of the different stakeholder groups
   2. Why be socially responsible? – acting responsibility helps to create a positive reputation for the company and is economically the sensible thing to do
   3. The role of organizational culture – managers can take steps to make sure that the company's values and norms become an important aspect of the company's culture by appointing an ethics ombudsman to monitor the ethical practices of the company's employees