Business Ethics

Introduction

ClassRules of engagementCommunication modeParticipationQuestioningOpen but within etiquettesAny response to above

Ethics - OriginEthos (Greek)Character and sentiment of the communityEthikos (Greek) authority of custom and traditionMos (Latin) moral, mores and MoralesReferring to:CustomsHabits of lifeTraditions of people

Carroll & Gannon (1997)

Specific Def. (Shea, 1988)the principles of conduct governing an individual or a profession standards of behaviourEthical StandardsHelp to guide decisions and actionsWhether Individual, corporations, professions, nationsrules or standards that govern behaviours (Toffler, 1986)

Ethics DefinedCustomary norms and ways of behaving in a society (Hegel)Character and sentiment of the communitythe 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 perspectiveinquiry 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 StandardsHelp to guide decisions and actionsWhether Individual, corporations, professions, nations

Business EthicsBusiness 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 makingChoices about the lawChoices about the economic and social issues that are beyond the laws domainChoices about the pre-eminence of ones 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 wrongInvestorsEmployeesCustomersInterest groupsThe legal systemThe communityApproachesDescriptiveNormative

Lacking BEEthical misconductNBESVolume of organizationLevel of managementAccounting frauds, conflicts of interests, defective products, harassment, abusive behaviour, employee theft and briberyHarris Interactive Poll perception of trustEnron, WorldCom, Anderson Worldwide, Global Crossing, Adelphia etc.Involvement of individuals, Corporations, Govt officials, Researchers, SportsJudgement of decisions SOCIETYReasons

Developments1960 Ethical ClimateSocial UnrestAnti-war sentimentLoyalty to employer loyalty to idealsMajor Ethical DilemmasEnvironmentEmployee-employer tensionCivil rightsHonestyWork ethicsDrugBE DevelopmentsCode of conducts & value statementsSocial responsibilityLegal / Personnel departments

Developments (Cntd.)1970Ethical ClimateScandalsRecessionUnemploymentHeightened environment concernsPublic pressure over business accountabilityEthical DilemmasEmployee militancyHuman rightsFirms covering rather than correctingBE DevelopmentsERC 1977Compliance with lawForeign Corrupt Practices ActValues movement

Developments (Cntd.)1980sEthical ClimateSocial contractStringent rules defence contractorDownsizing & loyalty to employer erodedHealth care emphasizedEthical DilemmasBribes & illegal practicesInfluence paddlingDeceptive advertisingFinancial fraudsTransparency BE DevelopmentsCode of Ethics for Government Service - 1980Defence industry initiativeEthic officers OmbudsmanFalse Claims Act

Developments (Cntd.)1990sEthical ClimateGlobal expansionChild labourEnvironment Internet / Cultural bordersForbidden - commonEthical DilemmasUnsafe work practices -3rd worldIncreased corporate liabilityFinancial mismanagement and fraudBE DevelopmentsFederal sentencing guidelines for organizationsLawsuitsGlobal Sullivan PrinciplesBoard responsibilityVoluntary disclosure annual reports issuance on ethics

Developments (Cntd.)2000sEthical ClimateEconomic growth financial failuresHigh profile firmsPersonal dataHackers & data thievesAggression and fundamentalismEthical DilemmasCyber crimesPrivacyFinancial mismanagementInternational corruptionLoss of privacyIP SD

Developments (Cntd.)BE DevelopmentsSarbanes Oxley Act -2002AnticorruptionCSR and Integrity ManagementUN Convention -2003UN Global Compact 2004Revised Federal Sentencing Guidelines 2004Ethics programs

Ethical Culture and BenefitsOrganizationalEthics OfficerNYSEUPSBaxter IntlGlobalThe Caux Round TableNAFTA, WTO, EU, BenefitsEmployee commitmentInvestor loyaltyCustomer satisfactionProfits

Levels of BE

End of SessionBook: Business Ethics: Ethical Decision Making and Cases By O.C. Ferrell, John Fraedrich and Linda Ferrell

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Outline Chap1 & 2The importance of Business EthicsUnderstanding Business EthicsWhy study BEEvolution of BEBenefitsStakeholder Relationships, Social Responsibility and Corporate GovernanceStakeholder relationshipStakeholder influence in CSRCorporate GovernanceRelevant CasesWall-Mart P292The Fall of Enron P318PETCO - 422

the study of the general nature of morals and of specific moral choices; moral philosophy; and the rules or standards governing the conduct of the members of a profession