Ethics and Social r

8/12/2019 Ethics and Social r

http://slidepdf.com/reader/full/ethics-and-social-r 1/11

Business 18: Introduction to Business Law ( S.Spencer)

Lecture Notes – Chapter 2: Business Ethics & Social Responsibility

“What you are thunders so loudly that I cannot hear what you say to the contrary”

-- Ralph Waldo Emerson

W! B"#ER W$# E#$CS%

We need to study business ethics to mae better decisions 'or oursel(es) the businesses

*e *or 'or and the society *e li(e it+

• Society as a Whole Benefits

o Corporate compliance *ith the la* is insu''icient alone to ensure ethical conduct

b,c the la*s do not encompass all epressions o' ethical beha(ior+ .Corporate

Social Responsibility /ebate0

S#1E"L/ER #E"R! (s+ 3R"4$# 516$5$71#$"N #E"R!

• People Feel Better

o Studyin8 ethical concepts and theories *ill help indi(iduals de'ine ethical conduct

and learn to use a strate8y or 'rame*or 'or main8 decisions+

o

Studyin8 ethical concepts and theories helps us understand oursel(es and othersbetter+

Unethical Behavior Can Be Very Costly

o Corporations are in positions o' po*er that allo* them to do 8reater dama8e to

others *hen they act unethically or socially irresponsibly+

o $ncreased eposure to liability and the passa8e o' onerous le8islation

controllin8,monitorin8 business acti(ity+

Civil and criminal actions against wrongdoing corps. & their exectives+

Con8ress passed the Sarbanes-Oxley Act of 2002 *hich increased

penalties 'or corporate *ron8doers & established rules desi8ned to deter and

of 11




pre(ent 'uture *ron8doin8+ Prpose of Statte: Encoura8e & enable

corporate eecuti(es to be ethical & socially responsible+

o Ne8ati(e impact o' public criticism on reputation and corps ability to earn pro'its+

o Ne8ati(e impact *ithin the 'irm (Unethical environment may encourage even

more unethical conduct on part of employees)

of 11




W1# $S E#$C1L BE19$"R%

(See the Ethics Checlist ! "nalysis# pages $%& $')

We *ill eamine 4"R E#$C1L #E"R$ES:

;+ R$<#S #E"R!

2+ =S#$CE #E"R!

>+ #$L$#1R$1N$S5

?+ 3R"4$# 516$5$71#$"N

#hese 'our theories can be classi'ied in t*o *ays:

!eleological "thical !heories @ 4ocus on the C"NSEAENCES o' a decision

#eontological "thical !heories (“deeds”) $ 4ocus on the /EC$S$"N itsel'+

%'(!S !(")%*

• Encompasses a (ariety o' ethical philosophies holdin8 that certain human ri8hts

are 'undamental and must be respected by other humans

• 4ocus is on each indi(idual member o' society and his,her ri8hts

• Each o' us 'aces a moral obli8ation not to harm the 'undamental ri8hts o' others

1N#$1N$S5

• $mmanuel ant Strict deontolo8ist

• ;th century philosopher

• umans are moral actors 'ree to mae choices and are able to ud8e the

morality o' any action by applyin8 his 'amous Categorical mperative

o “"ct only on that maim wherey at the same time you can will that it

shall ecome a universal law*” $n other *ords) *e ud8e an action by

applyin8 it uni(ersally+

+or eample, -orrowing money even though you now you will never

repay it* sin8 the cate8orical imperati(e) you *ould state the 'ollo*in8

rule,maim: “When I want money# I will orrow money and promise to

repay it# even though I now I won.t repay it*” 1ccordin8 to ant) you

of 11




*ould not *ant this maim to become a uni(ersal la* because no one

*ould belie(e in promises to repay debts and you *ould N"# be able to

borro* money *hen you *anted or needed to+ So) the maim 'ails the

cate8orical imperati(e test) and you are compelled ethically N"# to

promise 'alsely that you *ill repay a loan+

o “"lways act to treat humanity# whether in yourself or others# as an end in

itself# never merely as a means*” $n other *ords) *e may not use or

manipulate others to achie(e our o*n happiness+ $n the eample abo(e)

you are usin8 the indi(idual,entity that you are borro*in8 'rom b,c i' they

ne* all the 'acts) they *ouldnDt a8ree to the loan+

+odern %ights !heories

• 3ropose mied deontolo8ical theories b,c strict antianismDs duties are

absolute and sometimes create inappropriate results+ (/ne can 0E1E2 lie or

ill even though in some circumstances && such as self&defense && it may e

acceptale to do so*)

• 1bide by a moral rule unless a more important rule con'licts *ith it+ .$n other

*ords) donDt compromise a personDs ri8ht unless a 8reater ri8ht taes priority

o(er it+0 +or eample# memers of society have a right 0/3 to e lied to*

4owever# if you could save someone.s life y telling a falsehood# such as

0/3 telling a criminal the true location of a witness who will testify against

him# you would e compelled under the modern theory to save the witness.

life y 0/3 telling the truth*0

+a,or Strength-

• $t protects 'undamental ri8hts unless some 8reater ri8ht taes precedence+

+a,or Criticisms-

• /i''icult to achie(e a8reement about *hich ri8hts are protected+ .Ri8hts

'undamental to industrialied nations may be unno*n or se(erely restricted

in de(elopin8 nations* E*g*# certain freedoms# the treatment of women "R

E(en *,n a country) citiens may disa8ree about the ranin8 o' ri8hts+ E*g*#

Some "mericans argue that the right to health care is an important need that

of 11




should e met y the gov.t or a person.s employer while others are opposed

to funding universal health care 5c they want gov.t intervention limited*0

• /oesnDt consider the costs or bene'its associated *,ri8hts

• Creates a sense o' entitlement that may ha(e a ne8ati(e impact on

moti(ation+ (e*g*# If one is entitled to a 6o# a place to live# food and

healthcare regardless of how hard he wors# he may not e motivated to

wor to earn those things*)

Summary,

#etermine whether anyones rights are negatively affected /y an alternative.

0US!C" !(")%*

• =ohn Ra*ls) published " 3heory of 7ustice) in ;FG;

• 1r8ued it *as ri8ht 'or 8o(Dts to redistribute *ealth in order to help the poor and

disad(anta8ed+

• 'reatest 1i/erty Principle: Each person has an eHual ri8ht to basic ri8hts and

liberties+ #his is limited by the #ifference Principle: Social ineHualities are

acceptable only i' they cannot be eliminated *ithout main8 the *orst-o'' class

e(en *orse o''+

• Focs is on otcomes+ 1re people 8ettin8 *hat they deser(e%

• Strength: Basic premise - #he protection o' those *ho are least ad(anta8ed in

society+

• Criticisms: /oesnDt eamine the costs o' producin8 the eHuality+

Summary,

Choose the alternative that allocates societys /enefits and /rden most fairly.

U!1!2%23S+

•

$denti'ied most *ith ;Fth

century philosophers =eremy Bentham and =ohn Stuart5ill

• ReHuires a decision maer to maimie utility 'or society as a *hole

• 5a tility @ achie(in8 the hi8hest le(el o' satis'actions o(er dissatis'actions

• $t ud8es our actions based on outcomes .teleolo8ical0

of 11




• Strength- Easy to articulate the standard o' conduct – 5erely do *hat is best 'or

society as a *hole+

• Criticisms-

o /i''iculty in measurin8 bene'it & harm to all members o' society+

o neHual distribution o' costs & bene'its may lead to detrimental results 'or

a particular class or 8roup o' people+

Sumamry,

Choose the alternative that promises the highest net welfare to society as a whole.

P%)F! +24+52!)3

• 5aimie the businessD lon8-run pro'its *ithin the limits o' the la*

• Based on the 8aisse +aire #heory o' Capitalism 'irst epressed by 1dam Smith in

the ;th century

• 1r8ues total social *el'are is optimied i' humans are permitted to *or to*ard

their o*n sel'ish 8oals

• #he role o' 8o(Dts and the la* is limited solely to ensurin8 the *orin8s o' a 'ree

maret .by N"# inter'erin8 *,economic liberty) eliminatin8 collusion amon8

competitors) & promotin8 accurate in'ormation in the maretplace+

•

Strength- 1llocation o' societyDs resources to those units that are most e''icientincreases o(erall producti(ity and maimies total social utility+

• Criticisms-

/oesnDt concern itsel' *ith "W *ealth is allocated in society+ (for eample#

in the US"# 9:; of our wealth is held y <:; of the population)*

5aret imper'ections and a personDs station at birth inter'ere *,his ability to

compete*

#he ability o' la*s and maret 'orces to control corporate beha(ior is limited

Summary, Choose the alternative that prodces the most long6rn profits for

the company within the limits of the law.

133L!$N< #E E#$CS CECL$S#: 51$N< /EC$S$"NS

("pply the Ethics Checlist ! "nalysis# pages $%& $')

of 11




• "r8aniationDs Responsibility to Society 1d(ertisin8 /ilemma

• "r8aniationDs Responsibility to its Customers LandlordDs /ilemma (Section =

4ousing)

• "r8aniationDs Responsibility to its Employees EnronDs 3ension 3lans (2an&and&

file vs* Eecutive plan)

• "r8aniationDs Responsibility to its Shareholders 4ordDs decision re: 'uel e''icient

S9 (Environmentalist)

• "r8aniationDs Responsibility "(erseesS*eat shops in de(elopin8 countries

• EmployeesD Responsibility to their "r8aniation/ishonesty amon8 mana8ers

(+alse info provided)

of 11




#$N$N< CR$#$C1LL!: E91L1#$N< 1R<5EN#S L"<$C1LL!

• 3on Se7itrs @ 1 conclusion that does not 'ollo* 'rom the 'acts or premises one

sets out+

• 2ppeals to Pity @ <enerate support 'or a proposition by 'ocusin8 on a (ictimDs

predicament+

• False 2nalogies @ 1n analo8y essentially ar8ues that since somethin8 is lie

somethin8 else in one or more *ays) it is also lie it in some other respect+ We

should mae sure that the t*o situations are similar enou8h to mae the analo8y

(alid+

• Begging the 8estion @ #ain8 'or 8ranted or assumin8 the thin8 you are tryin8 to

pro(eI circular reasonin8+

• 2rgmentm ad Poplm @ 1r8ument to the people+ 1n emotional appeal to

popular belie's) (alues or *ants+ #he 'allacy is that ust because many or all people

belie(e somethin8 does N"# mean it is true+

• Bandwagon Fallacy @ Similar to ar8umentum ad populum+ States that *e should do

.or not do0 somethin8 merely because one or more other people or 'irms do it+

• 2rgmentm ad Baclm @ 1r8ument to the club+ #he ar8uer uses threats or 'ear

to bolster his position+

• 2rgmentm ad (ominem @ 1r8ument a8ainst the man+ #his tactic attacs the

speaer) N"# his reasonin8+

• 2rgment from 2thority @ 1r8uments 'rom authority rely on the Huality o' an

epert or person in position o' authority) N"# the Huality o' the indi(iduals ar8ument+

Similar is the argment to reverence or respect+

of 11




• False Case @ #his 'allacy results 'rom obser(in8 t*o e(ents and concludin8 that

there is a causal lin bet*een them *hen there is no such lin+ #his occurs b,c *e do

not attempt to 'ind all the e(idence pro(in8 or dispro(in8 the causal connection+

• !he 'am/lers Fallacy @ Results 'rom the mistaen belie' that independent prior

outcomes a''ect 'uture outcomes+

• %edctio ad 2/srdm @ JSlippery SlopeK ar8ument+ Carries an ar8ument to its

Jlo8icalK end *ithout considerin8 *hether it is an ine(itable or probable result+

• 2ppeals to !radition @ $n'er that because somethin8 has been done a certain *ay

in the past) it should be done the same *ay in the 'uture+

• !he 1re of the 3ew @ "pposite o' Jappeals to traditionK+ #he idea that *e should

buy somethin8 merely because it is Just releasedK or Jimpro(edK+

• Sn9 Cost Fallacy @ 1n attempt to reco(er in(ested time) money and other

resources by spendin8 still more time) money and resources+ “3hrowing >ood

?oney "fter -ad”

"W #" RES$S# REAES#S #" 1C# NE#$C1LL!

• Reco8nie nethical ReHuests and Bosses

• Buy #ime

• 4ind a 5entor & 3eer Support <roup

• 4ind JWin-WinK Solutions

• Wor Within the 4irm to Stop the nethical 1ct

of 11




• 3repare to Lose !our =ob (8ast resort 5c it.s difficult to mae change effectively

from the outside*)

Web sites to Re(ie*

• 3eople o' 8ood character are J#RR4CCK+ .3ronounced JterrificK0

Can you identi'y these “Si @illars of Character” % <o to

http:,,***+charactercounts+or8,de'si+htm+

• #he =osephson $nstitute o' Ethics http:,,***+osephsoninstitute+or8,+ Scroll do*n and

select the “Making Ethical Decisions A " Step&y&Step >uide” lin at the bottom o'

the pa8e+

of 11

http://www.charactercounts.org/defsix.htm

http://www.josephsoninstitute.org/

http://www.charactercounts.org/defsix.htm

http://www.josephsoninstitute.org/




<R"3 E6ERC$SE: Critical !hin9ing and %ationali:ing Pirating #igital +sic

LetDs apply *hat youD(e learned 'rom the chapter to a contet many o' you may be

'amiliar *ith: /o*nloadin8 Copyri8hted 5usic 4iles 'rom the $nternet at sites lie

Napster) aaa and 5orpheus+

1t the hei8ht o' NapsterDs popularity) ; users a second do*nloaded copyri8hted music

'or 'ree+ $n 22) each month) nearly 2 million consumers used the di8ital under8round

to do*nload bootle88ed copies o' music) 8ames) mo(ies and so't*are+

/o*nloadin8 copyri8hted music 'iles *ithout permission o' the copyri8ht o*ner is clearly

ille8al) yet the practice continues+ Why% Because do*nloaders use 'i(e common

rationaliations to usti'y stealin8 music 'iles+ Consider the 'ollo*in8 ecuses and identi'y

the possible 'allacies in each+

Ecuse M;: "very/ody does it+

Ecuse M2: ts the msic la/els falt. !hey release al/ms with only one good

trac9 per al/m; yet charge <= to >? dollars at retail+

Ecuse M>: woldnt /y the C# anyway+

Ecuse M?: +sicians and la/els ma9e enogh money already+

Ecuse M: m merely sampling the msic to decide if li9e it; ,st as test drive a

car /efore /y it.

of 11

Ethics and Social r

Documents

Transcript of Ethics and Social r