ethics slides

Why Study Business Ethics & Social Responsibility?Ethical behavior and corporate social responsibility can bring significant benefits to a business. For example, they may:Create good image of the company in the minds of customer, shareholders and govt. Attract customers to the firm's products, thereby boosting sales and profits.Achieve sustainable businessMake employees want to stay with the business, reduce labor turnover and therefore increase productivity.Attract investors and keep the company's share price high.Unethical behavior or a lack of corporate social responsibility, by comparison, may damage a firm's reputation and make it less appealing to stakeholders. Profits could fall as a result.Copyright 2009 Pearson Education, Inc. publishing as Prentice Hall1-*


EthicsThe values an individual uses to interpret whether any particular action or behavior is considered acceptable or appropriate.Questions to ask:Is the behavior or action consistent with the overall basic duties of the individual?Does the behavior or action acknowledge and respect the underlying rights of all the individuals who will be impacted by the action?Would the behavior or action be considered the best practice in that specific set of circumstances?Does the behavior or action match the overall entrenched beliefs of the individual?Copyright 2009 Pearson Education, Inc. publishing as Prentice Hall1-*


Business EthicsThe collective values of a business organization that can be used to evaluate whether the behavior of the collective members of the organization are considered acceptable and appropriateCopyright 2009 Pearson Education, Inc. publishing as Prentice Hall1-*


Foundation of Ethical TheoryInitially classified based on what perspective is considered by the readerDescriptive ethicsAnalytical ethicsNormative ethicsCopyright 2009 Pearson Education, Inc. publishing as Prentice Hall1-*


Descriptive EthicsThe presentation of facts related to the specific ethical actions of an individual or organizationUsed when an observer wants to understand the course of events that generated the ethical issueNo interpretation of the facts or assumptions concerning why that course of action took placeCopyright 2009 Pearson Education, Inc. publishing as Prentice Hall1-*


Analytical EthicsUnderstanding the reasons a course of action that may have an ethical impact took placeAlso called metaethicsMoves from the how and when inquiry, which is the basis of the descriptive ethics viewpoint, to asking whyHypotheses can be developed to help understand the relationships among different variables impacting ethical behaviorAddresses the motive behind the actions instead of just being satisfied with a description of the actionsCopyright 2009 Pearson Education, Inc. publishing as Prentice Hall1-*


Normative EthicsA prescribed course of action that attempts to ensure that ethical behavior will be followed in the futureMoves the evaluation of ethical behavior from the past to future tensePresents information on what should be done in the future rather than what was done in the past, both part of descriptive and analytical ethicsAllows employees and managers to address potential ethical issues before they occurUse of ethical tools (like ethics codes) help direct the normative ethical behavior by presenting what are acceptable and unacceptable types of behavior tolerated within the firmCopyright 2009 Pearson Education, Inc. publishing as Prentice Hall1-*


Teleological FrameworksFocus on the results of the conduct of the individualEthical Egoism: focusing on each individuals self interestBased on the belief that every individual should act in a way to promote himself/herself if the net result will generate, on balance, positive rather than negative resultsCopyright 2009 Pearson Education, Inc. publishing as Prentice Hall1-*


Teleological FrameworksUtilitarianism: based on the principle of utilityEach persons actions add to the overall utility of the community impacted by those actionsFocus on the net result of their actions instead of the means or motives that generated the reason for their actionsCopyright 2009 Pearson Education, Inc. publishing as Prentice Hall1-*


Teleological FrameworksSidgwicks Dualism: attempts to bridge the gap between the two competing ethical frameworks of ethical egoism and utilitarianismCore of argument was that both theories had elements of cost-benefit analysis to help analyze the actions of individualsAdam Smith presented an argument that could support Sidgwicks dualism argues the greatest good for the greatest number is achieved by individuals pursuing their self-interests in the marketplace



Deontological FrameworksFocus on the duty or obligation in determining whether the actions are right or wrongExistentialismBased on the underlying belief that the only person who can determine right and wrong is the person making the decisionsEach individual determines his or her own actions and is ultimately responsible for the consequences of those actionsCopyright 2009 Pearson Education, Inc. publishing as Prentice Hall1-*


Deontological FrameworksContractarianismSocial contract theoryBased on the belief that all individuals agree to social contracts to be members within a society

Kants EthicsEthical decisions based on the free will of the individualThe free will to make decisions that were considered rational needed to be converted into a universal willCopyright 2009 Pearson Education, Inc. publishing as Prentice Hall1-*


Mixed FrameworksSeven guiding principles that are considered part of the prima facie obligation an individual has to society:1. Fidelity: an individual needs to keep explicit and implicit promises2. Reparation: an individual must act on repairing the consequences for previous wrongful acts3. Gratitude: an individual must be able to show gratitude for the kindnesses that others have given him or her



Mixed Frameworks4. Justice: an individual should try to see that any goods are fairly distributed5. Beneficence: an individual should focus on trying to improve the lives of others6. Self-Improvement: an individual should improve oneself by focusing on virtue and intelligence7. Noninjury: an individual should not cause any harm to othersCopyright 2009 Pearson Education, Inc. publishing as Prentice Hall1-*


Global Business Standards CodexA codex that captures the eight major underlying principles in which ethical behavior can be interpreted and evaluatedEight ethical principles:FiduciaryPropertyReliabilityTransparencyDignityFairnessCitizenshipResponsivenessCopyright 2009 Pearson Education, Inc. publishing as Prentice Hall1-*


Fiduciary PrincipleEach officer has a legal fiduciary duty to act in the best interests of the stakeholders and other employees within the firmAn implied fiduciary duty for every employee to act in a way that generates positive benefits for the firmExamples: conflicts of interest, good faith efforts for carrying out responsibilities. Prudence with the companys resources, loyaltyCopyright 2009 Pearson Education, Inc. publishing as Prentice Hall1-*


Property PrincipleBased on the belief that every employee should respect property as well as the rights of the owners of the propertyExpected that the employee should be a good steward to the resource that he/she has access to.Examples: theft, misappropriation of funds, wasting resources, misappropriation of intellectual propertyCopyright 2009 Pearson Education, Inc. publishing as Prentice Hall1-*


Reliability PrincipleBased on the belief that it is the employees responsibility to honor the commitments he or she has made to the firmExamples: breaching a promise or contract, not fulfilling a promised action, ensuring that suppliers and other business partners are paid in a timely mannerCopyright 2009 Pearson Education, Inc. publishing as Prentice Hall1-*


Transparency PrincipleBased on the belief that every employee should conduct business in a truthful and open manner.Assumes that employees will not make decisions based on a personal agendaExamples: keep accurate and current records of business obligations, fraudulent and deceptive actions of the employee, financial information is presented in a truthful and accurate wayCopyright 2009 Pearson Education, Inc. publishing as Prentice Hall1-*


Dignity PrincipleBased on the belief that each employee needs to respect the dignity of all individualsEncourages the enhancement of human development not only within the company and the marketplace, but also in the society at largeExamples: ensuring the human rights of health, safety and privacyCopyright 2009 Pearson Education, Inc. publishing as Prentice Hall1-*


Fairness PrincipleBased on the belief that stakeholders who have a vested interest in the firm should be treated fairlyReciprocal fairness, distributive fairness, fair competition, procedural fairnessCopyright 2009 Pearson Education, Inc. publishing as Prentice Hall1-*


Citizenship PrincipleBased on the belief that every employee should act as a responsible citizen in the communityExpected that employees respect the laws of the community criminal, competition, environmental, corporate social responsibilityCopyright 2009 Pearson Education, Inc. publishing as Prentice Hall1-*


Responsiveness PrincipleBased on the belief that employees have a responsibility to respond to the requests for information about the operations from various stakeholdersExpected to react in a timely mannerCopyright 2009 Pearson Education, Inc. publishing as Prentice Hall1-*


Ethical ThoughtsThe biggest corporation, like the humblest citizen, must be held to strict compliance with the will of the people. Theodore RooseveltCopyright 2009 Pearson Education, Inc. publishing as Prentice Hall1-*


Ethical ThoughtsWe demand that big business give people a square deal, in return we must insist when anyone engaged in big business honestly endeavors to do right, he shall himself be given a square deal.Theodore RooseveltCopyright 2009 Pearson Education, Inc. publishing as Prentice Hall1-*


Ethics in ActionTrevor Field wanted to give back to the communityWatched women in South Africa carry water from the watering hole everyday, when they could be doing more productive thingsDesigned a water pump that could be used by children when they play to pull water from the deeper points in the ground where the water is not contaminated and is cooler works like a merry-go-roundField sells advertising for the water towers where the water is collectedCopyright 2009 Pearson Education, Inc. publishing as Prentice Hall1-*


Ethics in ActionEach pump costs about $7,000 (US $) to installPlayPumps International received a check in 2006 from the US government, the Case Foundation and the MCJ Foundation to help support the expansion of Fields projectFields goal is to raise $45 million (US $) by 2010 to help ten million African citizens gain access to clean drinking waterCopyright 2009 Pearson Education, Inc. publishing as Prentice Hall1-*


Questions for ThoughtChoose an event in your life where you believe you acted ethically. Discuss the event in terms of the teleological frameworks discussed in the text.Using the same event you chose in question 1 above, discuss the event in terms of the deontological frameworks discussed in the text.Copyright 2009 Pearson Education, Inc. publishing as Prentice Hall1-*


Questions for ThoughtChoose any Fortune 500 Company. Locate the companys code of ethics published on the companys Web page. Evaluate the code of ethics in terms of the Global Business Standards Codex.Using the principles set forth in the Global Business Standards Codex, find an example of a company that does or did not follow one of the principles. Discuss the implications of the companys actions.Copyright 2009 Pearson Education, Inc. publishing as Prentice Hall1-*


All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.



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ethics slides