Ch3-Ethics

Ch3 — Ethics & CSR — Lesson & Tracker

Progress Tracker

Concept	Attempts	Correct	Last Tested	Status
WhistleBlower	1	1	2026-04-19	🟢
SexualHarassmentTypes	2	1	2026-04-19	🟢

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Your Weak Points

Gap	What you did	What you need
Hostile work environment vs. quid pro quo	Called repeated degrading jokes “quid pro quo”	Quid pro quo = a transaction demanded. Hostile = persistent atmosphere with no exchange.

Error Notes

SexualHarassmentTypes

• Confusion: Selected quid pro quo for a scenario involving repeated degrading comments and offensive jokes
• Key point: Quid pro quo requires an explicit or implicit exchange (do this or lose your job). Hostile work environment = ongoing intimidating/humiliating conduct, no trade demanded. The tell: is something being offered or threatened in return? If not → hostile work environment.

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Concept Map — Weak → Strong Connections

graph TD
    PE["Personal Ethics<br/>family · culture · education · experience"]
    PE -->|shapes| ME["Managerial Ethics<br/>Standards guiding individual managers"]
    ME -->|three domains| EMP["Behaviour Toward Employees<br/>Fair treatment, safe conditions"]
    ME --> ORG["Behaviour Toward Organization<br/>Avoid conflicts of interest"]
    ME --> STK["Behaviour Toward Stakeholders<br/>Honest dealing with customers/public"]
    ORG -->|violations include| CI["Conflict of Interest<br/>Insider Trading"]
    ME -->|exposed by| WB["Whistle-Blower<br/>Reports wrongdoing"]
    PE -->|codified into| CODE["Code of Ethics<br/>Shared organizational standards"]
    CODE -->|individual ethics scale up to| CSR["Corporate Social Responsibility<br/>Organizational-level duty"]
    CSR -->|four approaches| ODAP["ODAP Scale<br/>Obstructionist → Proactive"]

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Ethics — Lesson

Source: BusinessEthics

The Core Distinction: Ethics vs. CSR

	Business Ethics	Corporate Social Responsibility
Level	Individual	Organizational
Question	What should I do?	What should the firm do?
Example	A manager refusing to fudge financial reports	A company adopting a zero-waste manufacturing policy

A firm can have unethical managers and a strong CSR program. A manager can act ethically inside an organization that harms society. They are distinct — but both ultimately rest on individual values.

Where Personal Ethics Come From

• Family, culture, religion — foundational values instilled early
• Education and peers — exposure to different moral frameworks
• Experience — hardship, role models, past mistakes

Because ethics are individually formed, organizations write codes of ethics to create shared standards where personal values might diverge.

Managerial Ethics — Three Domains

Domain	Examples
Behaviour toward employees	Fair treatment, safe working conditions, honest feedback
Behaviour toward the organization	Avoiding conflicts of interest, protecting confidential information
Behaviour toward other stakeholders	Honest dealings with customers, suppliers, and the public

Key Ethical Problems — Know All Three

Problem	Definition	Exam Signal
Conflict of Interest	An activity that benefits the employee at the employer’s expense	”Awards contracts to a supplier they own shares in”
Insider Trading	Using confidential information to trade stock	”Sold shares after learning about the merger before announcement”
Whistle-Blower	Someone who exposes wrongdoing internally or publicly	”Reported the CEO to securities regulators”

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CSR — Lesson

Source: CorporateSocialResponsibility

The ODAP Scale — Four Approaches to Responsibility

This is the most exam-tested framework in Ch3. Know all four names and behaviours cold.

Level	Approach	Behaviour	Example
1	Obstructionist	Deny, deflect, cover up problems	Concealing environmental violations
2	Defensive	Follow the law — nothing more, nothing less	Meeting minimum emissions standards and stopping there
3	Accommodative	Go beyond the law when pressured by stakeholders	Issuing a voluntary product recall after public backlash
4	Proactive	Actively seek opportunities to contribute to social good	Patagonia donating profits to conservation; TOMS one-for-one model

Exam trap: “Accommodative” ≠ “Proactive.” Accommodative firms react to pressure. Proactive firms initiate good — without waiting to be pushed.

Four CSR Domains

Domain	What It Looks Like
Environment	Sustainable development, reducing pollution, recycling
Customers	Safe products, honest marketing, fair pricing
Employees	Fair wages, safe conditions, diversity and inclusion
Investors	Transparent reporting, avoiding fraud

Implementing CSR — Four Steps

1. Commit at the top — leadership must visibly champion it
2. Write a code — publish clear ethical/social responsibility standards
3. Train and communicate — employees must understand what the standards mean in practice
4. Monitor and audit — use a social audit (systematic review of CSR spending and effectiveness) to track progress

Sexual Harassment — The Two Types

Type	What It Is	The Tell
Quid Pro Quo	An explicit or implicit trade: “do this or lose your job/promotion”	Something is being offered or threatened in exchange
Hostile Work Environment	Persistent intimidating, degrading, or humiliating conduct with no transaction demanded	The atmosphere is the problem, not a specific deal

Your prior gap: repeated jokes and degrading comments = Hostile Work Environment. There is no exchange — there’s a toxic atmosphere. Quid pro quo requires a trade.

Exam Scenario Recognition

Scenario	Correct Framework
”Manager offered promotion in exchange for sexual favours”	Quid Pro Quo
”Employees made repeated degrading jokes, making the workplace hostile”	Hostile Work Environment
”Company dumps waste illegally and blames a contractor”	Obstructionist CSR
”Company starts a tree-planting program unprompted”	Proactive CSR
”Company hires diversity consultants only after public pressure”	Accommodative CSR