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Concepts of Ethics?
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Business Ethics
The application of general ethical concepts
to the unique situations confronted in
business. It asks what is right or wrong
behavior in business and what principles or
rules can be used as guidance in business
situations.
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Two Characteristics
Tells people what they ought to do
Set of principles or rules
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Relativism Egoism
Utilitarianism Deontologism
The4Conceptsof
Ethics
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Relativism
There is no universal standard by which
morality can be judged
What is correct for one society may be
wrong for another
Ethics and morality are relative
What do you think of this?
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Egoism
One ought to act in his or her own self
interest
Ethical behavior is that which promotes
ones own self interest
Does not mean should not obey laws - only
do so if in self interest
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Utilitarianism
The morality of an action can be determined
by its consequences
An action is ethical if it promotes the
greatest good for the greatest number
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What do you think of this
concept?How do you quantify benefits and costs?
How do you value benefits and costs?
Can lead to unjust consequencesRestrictions against the majority to protect a
minority is not utilitarian
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Deontologism
Derived from the Greek word for Duty
Actions are not justified by their
consequences. Factors other than good
outcomes determine the rightness of actions
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Utilitarianism Vs. Deontologism
Utilitarianism - The ends justify the means
Deontologism - It is the means which areimportant
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Catagorical Imperative
Developed by Immuel Kant
I ought never to act except in such a way
that I can also will that my maxim should
become a universal law
Are you willing to permit everyone to adopt
the action?
Yes - Moral No - Immoral
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Guidance in Dealing with People
People should never be treated as a means
to an end, but as ends in themselves
To treat people as ends requires respect for
persons
Reject slavery
Deals with murder, rape, etcHow to deal with employees
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General Ethical Behavior
Builds security, friendliness, cooperation
and trust in a society
These are public goods created by generally
ethical behavior
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Ethical Tests
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Is It Legal Test?
Quadrant II
Ethical and Illegal
Quadrant IV
Unethical and Illegal
Quadrant I
Ethical and Legal
Quadrant III
Unethical and Legal
Ethical
Unethical
LegalIllegalCorporate
Decisions
Codification
Manifestation
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Ethical Tests
1. Is It Legal?
I Ethical - Legal
II Ethical - Illegal
III Unethical - Legal
IV Unethical - Illegal
I and IV Easy
II and III Difficult
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Ethical Tests
2. Benefit Cost Test
Do the benefits exceed the costs to
whomsoever they accrue?
3. Categorical Imperative
Are you willing to allow everyone to
practice the proposed action or do you want
to be a special case?
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Ethical Tests
4. Light of Day Test
What would be your reaction if the
action were brought out into the open for
public scrutiny?
5. Do Unto Others Test
Golden Rule - If you would like others
to do the same to you - passes the test
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Ethical Tests
6. Ventilation Test
Seek out others views. Discuss the 5
tests with them. If others feel it is OK -
passes the test
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Ethical Dilemmas in Business
Conflict of Interest
Have two interests - cannot purse one
without having negative impact on other
Two Types
Private Interest Conflicts with Corporate
Business Interest Conflicts with Public
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Whistleblowing
Act of disclosing wrongdoing in an
organization
Like blowing a whistle to call attention to a
thief
Types
Internal
External
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Can Cause Bitterness in
OrganizationDissent - Must speak out against others in
organization
Breach of Loyalty- Perceived as one whoviolates confidentiality and loyalty
Accusation - Singles out specificindividuals as threats to organization or the
public
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Possible Retaliation
Fired
Blacklisted
Transferred to undesirable locationsLifestyles and mental stability questioned
Physical abuse and murder possible
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Failure to Reveal Wrongdoing
Severe problems for society or organization
Can be implicated as an accessory before orafter the fact
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Ethics of Whistleblowing
When is it ethical to reveal wrongdoing ?
When is it ethical to remain silent?
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Whistleblowing Example
In charge of Quality Control
Company makes parts for automobile
brakes
Find defect in brake part
Could cause failure in brakes
Failure not certainMay take many years to develop
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Whistleblowing Example (cont.)
Go to VP of Production, your boss
He tells you to overlook defect - company
may loose too much money
What would you do?
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Cautious Approach to
Whistleblowing1. Make sure situation involves an imminent
threat to society or to the business
2. Document all allegations
3. Examine internal whistleblowing first
4. Should you remain anonymous?
5. Get another job first!!!
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Bribery
A payment, usually to a public official, to
induce that person to either do something
improper or to influence decisions or
actions
Extortion - same as bribery - recipient of
payment initiates transaction
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Bluffing and Deception
Negotiating a labor contract
Plant has experienced losses over past
several years - not clear why
Want concessions from labor
Tell labor that plant will be closed if no
concessions are made. In reality , no such
plans contemplated
Is This Ethical?
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Managerial Implications
Top Management Leadership
Organizational Culture
Realistic Goal Setting
Ethics Audit
Code of Ethics
Ethics Committee
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Managerial Implications
Ethics Advocate
Whistleblowing Mechanism
Ethics Training