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CHAPTER 3 Business Governance, Ethics, and Social Responsibility 117

years before any legal ban, the company voluntarily removed all chlorofluorocar-
bon propellants (CFCs) from its aerosol products worldwide on the basis of prelim-
33
inary evidence linking CFCs with ozone depletion. S.C. Johnson’s concern about
ozone depletion and the worldwide environment is a good example of the societal
responsibility model in action.
DaimlerChrysler Corporation is another company that has taken a strong soci-
etal responsibility position of business governance toward the global environment.
In its 2002 Company Environmental Report it lists the following environmental
accomplishments:
Certified environmental management systems at the majority of our plants; a sub-
stantial improvement in the efficiency with which we use resources; and the
increased use of renewable raw materials in the automobile production process
are our cornerstone environmental achievements. In our development laboratories
we have created new vehicles which consume less energy and emit less carbon
dioxide from one generation to the next. As a result, our average fleet fuel con-
sumption in Germany has fallen by more than 22 percent since 1995. 34

It is also working on developing fuel cell and hybrid vehicles as well as more
efficient internal combustion engines. DaimlerChrysler is clearly committed to
improving the world environment.
Finally, Andersen Corporation of Bayport, Minnesota, a privately held manu-
facturer of patio doors and windows with $1.7 billion in annual sales, is an example
of a company operating under a societal responsibility mode of governance in a dif-
ferent context. Andersen Corporation is a leading corporate partner of Habitat for
Humanity International, a not-for-profit organization that builds homes for the less
privileged. To date, Andersen Corporation has donated well over $2 million worth
of its products to Habitat for Humanity for the construction of homes not only in
the communities where it operates, but throughout the United States. Companies
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like S.C. Johnson, DaimlerChrysler, and Andersen that adopt a societal responsibil-
ity model are generally ones where giving back to society as a whole has become
embedded in the company’s culture.
reality Are there any companies in your community that have shown a special
CH ECK concern for preserving the environment?

Business Ethics

LEARNING OBJECTIVE 7
Explain the basic parameters of business ethics.

Defining Business Ethics
What is business ethics? What is ethical behavior? The topic is in the news every day,
but what does it all mean? Ethics involves beliefs about what is right and wrong, ethics Beliefs about what is right and
what is morally acceptable and what is not. Unethical behavior involves behavior wrong, what is morally acceptable and
what is not
that is either illegal or morally unacceptable to the larger community. Business ethics
unethical behavior Behavior that is
involves the application of ethical standards to business situations. The Arthur either illegal or morally unacceptable to
Andersen accounting firm’s recent actions with respect to Enron Corporation— the larger community
shredding documents and so on—were unethical by most any definition. The firm business ethics The application of
was criminally convicted of obstruction of justice. But many times defining what ethical standards to business situations
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is unethical business behavior is much more difficult. For example, there has been
a fairly recent controversy over the fact that the Augusta National Golf Club in

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