LO1 Define ethics and ethical dilemmas and the relationship between them.

• Ethics is a system of values that people use to determine whether actions are right or wrong.
• An ethical dilemma occurs when a person's values are in conflict, making it unclear whether a decision being considered is the right thing to do.
• Ethics guides our decisions, mostly without us even knowing, until a situation arises in which we can't see a clear best way to go. That's a dilemma that needs to be resolved.

LO2 Find out why ethics are a big part of small business.

• Ethics are important in five key aspects of small businesses: community impact, trust, culture, flexibility, and innovation.
• Because small businesses form the majority of businesses in the United States, they are an important part of any community. People avoid doing business with companies they perceive to be unethical, so unethical decision making jeopardizes a small business's very survival.
• Trusting the small business owner is key, because the owner and the business are often the "same" in peoples' eyes.
• Owners set the culture for their small business, and employees watch owners to know how to act. If owners act unethically, so will their employees.
• Small businesses don't have lots of policies and rules, so owners and employees don't have clearcut guidelines for how to resolve ethical dilemmas.
• Small businesses are usually the ones that come up with innovations, thus putting them in potentially risky ethical situations.

LO3 Understand why there aren't any "do this" and "don't do this" types of lists for ethical decisions.

• There are too many important and varied factors for small businesses to make lists like that.
• Relationships, reputations, and family dynamics are some of the reasons small business ethics decisions can be more complicated than those in larger businesses.
• Ethics aren't like law, where it's "one size fits all."

LO4 Learn ethics planning, a three-step process to help you make ethical decisions.

• The Four Questions (creating action options) and the Ethical Tests form ethics planning.
• The Four Questions help you figure out how to deal with important people and apply information for your decision.
• Creating action options helps you build a list of realistic possibilities to help you resolve your problem.
• The Ethical Tests are a "big picture" way to understand your possible options and to help you pick out the best one.
• Owners' decision making becomes the model for the way all employees will make decisions, so it's worth spending time to make sure those decisions are the best ones available.
• Word-of-mouth is key to small business success and growth, and even the perception of unethical treatment can lead to lost sales.

LO5 Learn the techniques of building social capital through legitimacy.

• Social capital is built from legitimacy and social networking.
• Legitimacy is others' acceptance of the people, products, and organization of the small business.
• Social networking involves building relationships with others through mutual contact and help.

LO6 Learn the basic skills for handling a crisis.

• Crises are problems that risk a business's existence and require immediate action.
• There are six suggestions for handling a crisis.
• Being honest and open is a big part of handling crises.