Business EthicsExternal vs. Internal Environments

No Unequivocal Dedication

• Walmart

• Utility Companies

• Etc.

• Why do you think commitment to ethics is not consistently paramount on the organizational scene?

Where is the Hope?

• Overall impact of decision making in business depends on the cumulative effect of moral actors: the stakeholders

Part 2: The Practice of Business EthicsChapter 3 – Internal Stakeholders

• Matt’s Dilemma – page 47

Dilemma

• Is Scott correct?

• What can Matt do?

Defining Organizational Ethics

• We learned that business ethics is a study quite distinct from general ethics discussions. Why do you think that is the case?

• 1) all parties (stakeholders) have a vested interest in ethical performance of an organization

• In a work environment, you could be placed in a clash with the ethical standards of the organization’s operating culture

Organizational Culture – Remember MGMT 303?

• Weak or powerful influence on employee?

• “Values, beliefs, norms shared by all members….”

• Includes sum of all polices and procedures, written and unwritten by every functional area

• Includes “soft laws” and actions undertaken by employees

Functional Areas May Include

• Supply chain, operations, distribution, marketing, sales, service, R&D, HR, C-suite, general administration – aka “value chain”

Chapter 3 Focus – R&D, Manufacturing, Marketing,

Advertising, HR and Finance

• Let’s explore the Ethics of Research and Development, p. 49.

The Manufacturing Tie-In to R&D

• “Do you want it fast, or do you want it right?” Pressures may be great…

• Ethical challenges here may include:

--coming to safe, fair compromises

--quality assurance in the face of uncertainties

How About Marketing?

• The utilitarian view emphasizes that if customers are satisfied, any end justifies the means.

• Universal ethics viewpoints warn us of the dangers – and the fleecing—of the public when the utilitarian perspective dominates.

In Fact, We are Constantly Affected by Marketers

• They shape our world!

The Story of our Stuff

Ethics in HR

• The ideal is as stated in p. 53 of your text

• On that same page, we’ll review some ethical transgressions and discuss our own thoughts/experiences

Ethics in Human Resources

• HR professionals need to help ensure that ethics is a top organizational priority

• To the extent possible, they need to ensure that leader selection and development processes include an ethical component – good advice – is it possible? What do you think? What might a non-profit or organization without an HR dept. do to address this?

HR

• Responsible to ensure the right programs and policies are in place

• Must stay abreast of ethical issues –including changing legislation and the consequences of illegal/unethical behaviors

Ethics in Finance – P 54

• What is the accounting function?

• What is the purpose of an audit function?

• Exercise p. 55

The GAAP Process

• Accounting is governed by this guidance—generally accepted principles that govern the profession – “operating procedures”

• These are not the regulations/laws themselves

• Let’s talk about creative bookkeeping p.56

Sarbanes-Oxley Act of 2002

• How it affected my profession in 2002

• Based on our learning so far, do you feel it solved the primary problem in marketing in the business I described?

• Worthwhile or not?

• Let’s discuss its application to a number of businesses

•Who is Ultimately Responsible for an Organization’s Ethical Culture?