Post on 12-Jan-2016
Business Ethics
Introduction
Class Rules of engagement
Communication mode Participation Questioning Open but within etiquettes
Any response to above
Ethics - Origin
Ethos (Greek) “Character” and “sentiment of the community”
Ethikos (Greek) – authority of custom and tradition
Mos (Latin) – moral, mores and Morales Referring to:
Customs Habits of life Traditions of people
Carroll & Gannon (1997)
Specific Def. (Shea, 1988) “the principles of conduct governing an
individual or a profession” “standards of behaviour”
Ethical Standards Help to guide decisions and actions Whether Individual, corporations, professions,
nations “rules or standards that govern
behaviours” (Toffler, 1986)
Ethics Defined
“Customary norms and ways of behaving in a society” (Hegel)
“Character” and “sentiment of the community” “the principles of conduct governing an individual or
a profession….standards of behaviour” (Shea, 1988) “rules or standards that govern behaviours” (Toffler,
1986) “the basic ground rules by which individual acts. We
often give complex explanations of our actions, but in fact we act for simple reasons. The ground rules are a framework for defining which actions are personally permissible, and which are not” (Drummond & Bain,1994)
Ethics Defined (Contd.)
“how people try to live their lives according to a standard of “right” and “wrong” behaviour – in both how we think and behave towards others and how we would like them to think and behave towards us.” (Ghillyer, 2010) Societal perspective
“inquiry into the nature of grounds of morality where the term morality is taken to mean judgements, standards and rules of conduct.” (O.C. Ferrell)
Ethical Standards Help to guide decisions and actions Whether Individual, corporations, professions,
nations
Business Ethics “Business ethics is the study of how personal moral
norms apply to the activities and goals of commercial enterprise. It is not a separate moral standard, but the study of how the business context poses its own unique problems for the moral person who acts as an agent of this system” (Laura Nash)
Falls into three basic areas of managerial decision making
Choices about the law Choices about the economic and social issues that are
beyond the law’s domain Choices about the pre-eminence of one’s own self-interest
Business Ethics (Contd.)
“Business ethics involves the application of standards of moral behaviour to business situations” (Ghillyer, 2010) The application of ethical standards to business
behaviour
“the principles and standards that guide behaviour in the world of business” (O.C. Ferrell)
Business Ethics (Contd.)
Who determines the actions as right or wrong Investors Employees Customers Interest groups The legal system The community
Approaches Descriptive Normative
Lacking BE
Ethical misconduct NBES Volume of organization Level of management Accounting frauds, conflicts of interests, defective
products, harassment, abusive behaviour, employee theft and bribery
Harris Interactive Poll – perception of trust Enron, WorldCom, Anderson Worldwide, Global
Crossing, Adelphia etc. Involvement of individuals, Corporations, Govt
officials, Researchers, Sports Judgement of decisions – SOCIETY Reasons
Developments
1960 Ethical Climate
Social Unrest Anti-war sentiment Loyalty to employer – loyalty to ideals
Major Ethical Dilemmas Environment Employee-employer tension Civil rights Honesty Work ethics Drug
BE Developments Code of conducts & value statements Social responsibility Legal / Personnel departments
Developments (Cntd.)
1970 Ethical Climate
Scandals Recession Unemployment Heightened environment concerns Public pressure over business accountability
Ethical Dilemmas Employee militancy Human rights Firm’s covering rather than correcting
BE Developments ERC – 1977 Compliance with law Foreign Corrupt Practices Act Values movement
Developments (Cntd.)
1980s Ethical Climate
Social contract Stringent rules – defence contractor Downsizing & loyalty to employer eroded Health care emphasized
Ethical Dilemmas Bribes & illegal practices Influence paddling Deceptive advertising Financial frauds Transparency
BE Developments Code of Ethics for Government Service - 1980 Defence industry initiative Ethic officers – Ombudsman False Claims Act
Developments (Cntd.)
1990s Ethical Climate
Global expansion Child labour Environment Internet / Cultural borders Forbidden - common
Ethical Dilemmas Unsafe work practices -3rd world Increased corporate liability Financial mismanagement and fraud
BE Developments Federal sentencing guidelines for organizations Lawsuits Global Sullivan Principles Board responsibility Voluntary disclosure – annual reports issuance on ethics
Developments (Cntd.)
2000s Ethical Climate
Economic growth – financial failures High profile firms Personal data Hackers & data thieves Aggression and fundamentalism
Ethical Dilemmas Cyber crimes Privacy Financial mismanagement International corruption Loss of privacy IP SD
Developments (Cntd.)
BE Developments Sarbanes Oxley Act -2002 Anticorruption CSR and Integrity Management UN Convention -2003 UN Global Compact – 2004 Revised Federal Sentencing Guidelines – 2004 Ethics programs
Ethical Culture and Benefits
Organizational Ethics Officer
NYSE UPS Baxter Intl
Global The Caux Round Table
NAFTA, WTO, EU, Benefits
Employee commitment Investor loyalty Customer satisfaction Profits
Levels of BE
International Level
Societal Level
Association Level
Organizational level
Individual level
End of Session
Book: Business Ethics: Ethical Decision
Making and Cases By O.C. Ferrell, John Fraedrich and Linda Ferrell
Write down your strengths and weaknesses on a page and submit
Outline Chap1 & 2
The importance of Business Ethics Understanding Business Ethics Why study BE Evolution of BE Benefits
Stakeholder Relationships, Social Responsibility and Corporate Governance
Stakeholder relationship Stakeholder influence in CSR Corporate Governance
Relevant Cases Wall-Mart – P292 The Fall of Enron – P318 PETCO - 422