Question

Discussion Questions 1. When a company acts in an ethically questionable man- ner, what types of problems are caused for the organiza- tion and its customers? 2. How can an employee take an ethical stand regarding a business decision when his or her superior already has taken a different position? 3. Overall, would it be more profitable for a business to fol- low the economic model or the socioeconomic model of social responsibility?

Answer 1

1. Ethics in business is something which can be interpreted in various ways. Giving false or misleading information in promotional campaigns and on product labels; and supplying sub-standard products or not adhering to the declared product specifications are all examples of ethically questionable actions of a company.

Actions related to above will result in the company losing its stature, prominence and public trust over a period of time. This will certainly reflect in its financial viability too in due course of time.

For the customers, false declarations and sub-standard products will cause monetary loss and health related hazards. Besides, losing of total trust in products used.

2. It is very difficult for an employee on its own to take a contrary stand that his or her superiors have already taken. At best, the employee can rationally reason the issue with the immediate superiors and try to change their stance. Failing which, only two choices would be left i.e. to fall in line or move out.

3. Theoretically, an economic model may reap more profits for an organization as it is totally market based outlook with dedicated funds or project initiatives for social responsibility. In this the company is aware of the cost implications for social responsibility.

While socioeconomic model not only takes care of the market dynamics but also takes along with it society as a whole. The initiative is thus more ethically correct but on the other hand has more cost implication.