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BUSINESS ETHICS

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Title: BUSINESS ETHICS


1
BUSINESS ETHICS
2
What is ethics?
  • Ethics is the branch of philosophy that focuses
    on morality and the way in which moral principles
    are applied to everyday life. Ethics has to do
    with fundamental questions such as What is
    fair? What is just? What is the right thing
    to do in this situation? Ethics involves an
    active process of applying values, which may
    range from religious principles to customs and
    traditions.

3
What is business ethics?
  • Business ethics focuses on what constitutes right
    or wrong behavior in the world of business.
    Corporate business executives have a
    responsibility to their shareholders and
    employees to make decisions that will help their
    business make a profit. But in doing so,
    businesspeople also have a responsibility to the
    public and themselves to maintain ethical
    principles.

4
  • Although ethics provides moral guidelines,
    individuals must apply these guidelines in making
    decisions. Ethics that applies to business
    (business ethics) is not a separate theory of
    ethics rather, it is an application of ethics to
    business situations. Although all people have
    ethical responsibilities, higher ethical
    standards are imposed upon professionals who
    serve as social models, such as physicians,
    attorneys, and businesspeople.

5
The Relationship Between Law and Ethics
  • The law is an expression of the ethical beliefs
    of our society.
  • Law and ethics are not the same thing. The
    question, Is an act legal? is different from
    the question, Is an act ethical? The law
    cannot codify all ethical requirements.
    Therefore, an action might be unethical, yet not
    necessarily illegal. For example, it might be
    unethical to lie to your family, but it is not
    necessary illegal.

6
  • Similarly, just because an act is illegal does
    not necessarily mean it is immoral. Rosa Parks
    was acting illegally when she refused to give up
    her seat on the bus to a white male, but that
    does not necessarily mean she was acting
    unethically. Should an individual obey the law
    even if it would be unethical to do so? Under
    the theory of civil disobedience espoused by
    Martin Luther King, Mahatma Ghandi and others, an
    immoral law deserves to be disobeyed. Can you
    think of any examples of acts that would be
    illegal, yet arguably ethical?

7
THEORIES OF ETHICAL CONDUCT
  • Theories of ethics present standards by which a
    person can analyze and evaluate his or her own
    moral conduct.
  • Over the centuries, two different philosophical
    frameworks developed ethical standards based on
    universal duties (deontology) and ethical
    standards based on consequences (utilitarianism).

8
Deontology
  • Deontology is the philosophical practice of
    defining and adhering to an absolute set of
    standards by which ethical behavior can be
    measured. It tries to define universal duties
    that serve as moral guides to decision making.
    When a moral dilemma arises, a person can apply
    these universal standards to determine a course
    of action that is good.

9
  • In deontology, a person fulfills absolute moral
    duties regardless of whether good comes from the
    actions. A person decides upon actions by asking
    if a particular action is morally right or wrong.
    The act of carrying out that duty is important
    rather than the consequences of the act. An
    example of a set of deontological rules would be
    the Ten Commandments.

10
The Rights Model
  • The rights model analyzes ethical issues by
    focusing on an actions impact on human rights.
    Under this model, human rights are the rights all
    people have. An action that maximizes respect
    for human rights and minimizes their violation is
    morally correct. When encountering ethical
    dilemmas, a person applying the rights model
    selects the action that minimizes the violation
    of stakeholders rights.

11
  • The two necessities to be fully human are freedom
    and well-being. Thus, two basic categories of
    human rights exist within the model (1) rights
    of liberty, and (2) rights of well-being.

12
Rights of Liberty
  • Privacy
  • Free consent
  • Free speech
  • Freedom of conscience
  • Right to life

13
Rights of Well-Being
  • Employment
  • Food
  • Housing
  • Education

14
  • Under the rights model, each person possesses
    certain fundamental human rights because of the
    fact that they are a human being. Each persons
    life has an infinite value.

15
Utilitarianism
  • Utilitarianism is an approach to establishing
    ethical standards based on the consequences of an
    action. In an ethical dilemma, a person selects
    the action that brings about the greatest amount
    of good for the greatest number of people. The
    model determines correctness in terms of social
    benefit. Many business people favor the
    cost/benefit approach of utilitarianism.

16
Applying the Rights Model
  • Identify the facts.
  • Identify the ethical issues.
  • Identify the alternative courses of action.
  • Identify the stakeholders.
  • Determine to which extent each alternative
    respects the dignity and fundamental rights of
    stakeholders or violates their rights.
  • Choose the alternative that maximizes the dignity
    of stakeholders and minimizes the violation of
    their rights.

17
Applying Utilitarianism
  • Identify the facts.
  • Identify the ethical issues.
  • Identify the alternative courses of action.
  • Identify the stakeholders.
  • For each alternative, calculate the costs and
    benefits (identify who would be harmed and who
    would benefit).
  • Choose that alternative which results in the
    greatest amount of good for the greatest number
    of stakeholders.

18
Example 1
  • Cartoon The Difference Between Ethics and
    Business Ethics

19
Example 2
  • A secretary who has worked for your corporation
    for fifteen years is involved in a car accident
    in which she permanently loses the use of her
    right hand. Thus, she can no longer effectively
    type, file, or perform many of the other
    functions that she previously had performed and
    that are included in her job description.

20
  • Your corporation has a very tight budget and does
    not have sufficient funds to pay for an
    additional secretary without reallocating budget
    items. The injured secretary has been very loyal
    to your corporation, and you have been very
    satisfied with her work and dedication. She
    wants to stay at her job.

21
  • Moreover, she does not believe that she could
    find other employment at this time. Should your
    corporation fire her, lay her off with
    compensation, or find a way to retain her? In
    resolving this dilemma, apply
  • Utilitarianism
  • The Rights Model
  • Your own personal opinion

22
CAPITAL PUNISHMENT
  • Apart from the United States, few countries use
    the death penalty.
  • Only China and Iran execute more people than the
    U.S.
  • No member of the European Union uses it. Under
    the European convention for the Protection of
    Human Rights and Fundamental Freedoms, it is
    regarded as a human rights violation, so no
    nation can be admitted to the European Union if
    it still has the death penalty on its books.

23
  • When President Bush was elected president, the
    federal government had not used the death penalty
    for 38 years. He reinstated it.
  • When he was governor of Texas, that state had
    more executions than any other, and Bush signed
    152 death warrants more than any previous
    governor of Texas, or any other American governor
    in modern times.

24
  • Typically, he made his life-and-death decision
    after a half-hour briefing with his legal
    counsel.
  • Only once, as governor of Texas, did he stop an
    execution.

25
  • Is it inconsistent to oppose the killing of
    embryos or fetuses, yet support the death
    penalty?
  • Not necessarily. Bush has said Some advocates
    of life will challenge why I oppose abortion yet
    support the death penalty. To me, its the
    difference between innocence and guilt.

26
  • But to hold the two positions consistently, one
    would at least need to be very careful about
    supporting the death penalty. Since humans are
    fallible, any legal system that puts large
    numbers of people to death will risk executing
    people innocent of the crimes for which they were
    charged.

27
  • Several studies list people who have been
    condemned to death, and in some cases executed,
    who were later shown to be innocent.
  • The Death Penalty Information Center has a list
    of 102 people wrongfully sentenced to death in
    the U.S. between 1973 and 2000.

28
  • An investigation by the Chicago Tribune of all
    682 executions in the U.S. between 1976 and 2000
    found that at least 120 people were put to death
    while still proclaiming their innocence, and in 4
    of those cases there was evidence supporting
    their claim of innocence.

29
  • When Florida Supreme Court Justice Gerald Kogan
    retired, he said that there were several cases in
    which he had grave doubts about the guilt of
    people executed in Florida.

30
  • President Bushs attitude about the risk of
    putting to death innocent people is in sharp
    contrast to another Republican governor who was
    once a supporter of the death penalty.
  • In 1999, Gov. George Ryan of Illinois became
    concerned about the risk of putting innocent
    people to death when an investigation by a
    journalism class at Northwestern University
    proved that another man committed a murder for
    which Anthony Porter, a death-row inmate for 16
    years, was about to be executed.

31
  • Ryan set up a commission that, over 3 years,
    concluded that 13 condemned prisoners were
    innocent.
  • Ryan stated, Our capital system is haunted by
    the demon of error, error in determining guilt
    and error in determining who among the guilty
    should die.

32
  • Just before he left office, Ryan felt that he
    could no longer live with the risk of executing
    the innocent he commuted all death sentences in
    Illinois to terms of imprisonment.

33
  • No matter how careful Bush may have been after
    all, he did spend 30 minutes reviewing each case
    before he signed the death warrant it remains
    possible, if not probable, that at least one of
    the people executed during his tenure was
    innocent.

34
  • Bush has said I support the death penalty
    because I believe, if administered swiftly and
    justly, capital punishment is a deterrent against
    future violence and will save other innocent
    lives.

35
  • In the third of his debates with Al Gore,
    moderator Jim Lehrer asked Bush whether he
    thought that the death penalty actually deters
    crime. Bush said, I do thats the only reason
    to be for it. Let me finish that I dont think
    you should support the death penalty to seek
    revenge. I dont think thats right. I think
    the reason to support the death penalty is
    because it saves other peoples lives.

36
  • The problem with this defense of capital
    punishment is that almost all of the evidence is
    against it. Since it is easy to compare murder
    rates before and after the abolition or
    reinstitution of the death penalty, or in
    different jurisdictions that do or do not have
    the death penalty, there is plenty of relevant
    data.

37
  • For example, after the 1976 USSC ruling that the
    death penalty is constitutional, a dozen states
    chose not to enact laws allowing it. These
    states have not had higher homicide rates than
    the states that did enact a law. In fact, 10 of
    them have had homicide rates lower than the
    national average.

38
  • South Dakota has it, North Dakota does not. The
    homicide rate is higher in South Dakota.
  • Connecticut has it, Massachusetts does not.
    Again, the homicide rate is higher in the state
    that has the death penalty.
  • Homicide rates have risen and fallen in roughly
    symmetrical patterns in states with and without
    the death penalty, indicating that the death
    penalty has little effect on the incidence of
    homicide.

39
Executing the Mentally Retarded
  • A person who is seriously mentally retarded is
    likely to be incapable of understanding right
    from wrong, and thus is morally innocent, even if
    he or she did commit the crime.
  • As a national consensus against executing the
    mentally retarded began to build, Bush, as
    governor of Texas, came out against a bill
    prohibiting the use of the death penalty against
    profoundly mentally retarded criminals (with IQs
    of less than 65). His explanation I like the
    law the way it is.

40
  • Even in Texas, a poll in 1998 showed that 73 of
    all Texans were opposed to executing the mentally
    retarded.
  • In May 1997, Bush denied an appeal for clemency
    on behalf of Terry Washington, a
    thirty-three-year-old mentally retarded man with
    the communication skills of a 7-year-old.
    Washington was executed.

41
  • In June 2002, the USSC ruled that, given the
    growing national consensus, executing retarded
    persons is cruel and unusual punishment and
    hence a violation of the 8th Amendment.

42
Internet Activities and Assignments
  • 1. Go to http//wbl.westbuslaw.com , select
    Internet Applications, and then click on
    Chapter 40. Do Activity 40-1, Ethics in
    Business.
  • 2. Go to the homepage of a Fortune 500 company
    that has published its code of ethics on the
    World Wide Web. What ethical concerns does it
    cover? Is it a detailed document or general in
    its terms?
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