How Does Being Good Pay Off?

Organizations are under increasing pressure to do the right thing and serve the public good, and there are a multitude of ways that organizations can be ethical and socially responsible. Although organizations should always consider ways to do this, these decisions often come at a financial cost and thus create dilemmas for organizational decision makers. This activity is important because it highlights the ways that being socially responsible is beneficial for organizations.

The goal of this activity is to challenge your knowledge of research findings on how being ethical and socially responsible pays off for organizations.

Each statement represents how ethical and socially responsible behavior by a company affects various stakeholders. Read the statements and then match each term to the element of ethical or socially responsible behavior that it best represents.

$1.$ Revenue

$2.$ Customers

$3.$ Interpersonal Relationships

$4.$ Profits

$5.$ Stock price

$6.$ Employees

Match each of the options aboce to the items below

Consumers want to spend more money with companies that are socially responsible.

Socially responsible companies generate a significantly higher return on equity than competitors.

An ethucal scandal can cause a company's valuation to plumet.

Workers may be less likely to leave when their company is socially responsible.

Investors are increasingly seeking socially responsible companies to put their money into.

Companies with effective ethics and compliance cultures find their employees are less likely to retaliate against one another.