Business Ethics & Social Responsibility: Definition & Differences

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  • 0:03 A Look at Ethics
  • 0:47 What Are Business Ethics?
  • 1:48 What Is Social Responsibility?
  • 2:54 Ethics vs. Social…
  • 3:38 Lesson Summary
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Lesson Transcript
Instructor: Savannah Samoszuk

Savannah has over eight years of hotel management experience and has a master's degree in leadership.

Businesses are faced with many responsibilities including business ethics and social responsibility. This lesson will examine both concepts and differentiate between the two.

A Look at Ethics

Everyone remembers learning about ethics and morals in school. It was the basic right and wrong and the golden rule. Ethics are the moral principles that represent a person or group. They are how a person or group acts in regards to what they consider to be right or wrong. It is much easier to uphold your ethics as a person than it is to uphold ethics in a business. When it comes down to ethics as a person you may be faced with: Should I gossip about my best friend? Should I not leave a tip for the server at the restaurant? Or, should I lie to my wife? Business ethics are a much deeper topic and are more complex than these simple trials we may face as a person.

What Are Business Ethics?

For most businesses, the ultimate goal is to bring in revenue and be the best in their industry. However, achieving these goals at all costs is not always ethical. Every business needs to have and uphold business ethics. Business ethics are how companies conduct themselves in their practices and policies. Companies that have failed in this area have been subject to losing customers and bad publicity.

For example, Mattel, the toy company, has faced scrutiny in the past because of their business ethics. Wanting to lower costs of production, they outsourced their manufacturing, which led to toys being produced that had high amounts of lead and were dangerous for children. This is an example of a company making a decision using bad business ethics.

Companies need to care about their employees and customers. The decisions they make regarding ethics can impact not only many people, but the company as well. These decisions are much bigger than trying to decide whether or not to tell a lie.

What Is Social Responsibility?

Society has become more aware of how goods that they purchase are produced, and they expect businesses to be a responsible member of society, just as if it were an individual. Because business decisions can impact society, including the environment, businesses are also faced with social responsibility, an ethical concept that implies that companies have a duty to the society and environment around them.

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