Module 12 Notes
Module 12 Notes ENTR-27056-003
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This 3 page Class Notes was uploaded by Megan Angelo on Tuesday April 5, 2016. The Class Notes belongs to ENTR-27056-003 at Kent State University taught by Kipp A. Krukowski (P) in Spring 2016. Since its upload, it has received 23 views. For similar materials see Intro to Entrepreneurship in Entrepreneurship at Kent State University.
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Date Created: 04/05/16
Module 12 Notes Social Responsibility and Ethics Definition: “Social responsibility is operating a business in a way that exceeds the ethical, legal, commercial and public expectations that society has of business.” Business for Social Responsibility http://www.bsr.org Definition: “Social responsibility is operating a business in a way that exceeds the ethical, legal, commercial and public expectations that society has of business.” Business for Social Responsibility http://www.bsr.org The B Corporation A benefit corporation or B-corporation is a type of for-profit corporate entity, legislated in 28 U.S. states (not Ohio, yet), that includes positive impact on society and the environment in addition to profit as its legally defined goals. B corps differ from traditional corporations in purpose, accountability, and transparency, but not in taxation. The purpose of a benefit corporation includes creating general public benefit, which is defined as a material positive impact on society and the environment. A benefit corporation’s directors and officers operate the business with the same authority as in a traditional corporation but are required to consider the impact of their decisions not only on shareholders but also on society and the environment. Ethics • The moral code by which we live and conduct business. • Derives from the cultural, social, political, and ethnic norms with which we are raised as children. Conflicts of Interest • When a person’s private or personal interests clash with professional obligations. Survival Tactics • What an entrepreneur does today out of desperation will follow him for the rest of his business career. Stakeholder Pressure • All stakeholders want what is owed them, when it is owed them. Pushing the Legal Limit • Entrepreneurs who regularly play too close to the edge of legality eventually get caught and the price is often their businesses and their reputations. Create a Strong Ethical Culture The importance of developing a Code of Conduct: • When a Code of Conduct is written down, people in the organization tend to take it more seriously. The entrepreneur must lead by example: • Communicate ethics as a priority • Set a good example of ethical conduct • Keep commitments • Provide information about what is going on (be transparent) • Support following (and follow!) the Code of Conduct Questions to Assist With Ethical Decision-Making Will the actions taken result in the “greatest good for all parties involved?” Will the actions respect the rights of all parties? Are the actions just? Will anyone be hurt by the actions? Would I be proud of my actions if were they announced in my local newspaper? Ethics Learning from Real-Life Dilemmas • There is no better way to understand the role of ethics in any business than to encounter real-world dilemmas and determine how they might be resolved. • Some real world examples follow… Examples of Ethical Dilemmas • A customer pays in full their invoice from you, unbeknownst to them, twice. You, by the way, have a serious cash flow problem. • Your new product isn’t fully safety tested, and your customer knows this, but they’re pushing you to deliver it to them anyway. You, by the way, have a serious cash flow problem. • You are in the process of selling your company and become aware (from the purchaser’s comments) that the purchaser hasn’t fully read about some of the risks you outlined in the due diligence you provided them. You, by the way, have a serious cash flow problem.