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Business Ethics Fundamentals

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Business Ethics Fundamentals Search the Web Ethics Officers Association is a professional association of managers of corporate ethics and compliance. – PowerPoint PPT presentation

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Title: Business Ethics Fundamentals


1
Business Ethics Fundamentals
6
2
Chapter Six Outline
  • Business Ethics and Public Opinion
  • Define business ethics
  • Ethics, Economics, and Law Venn Model
  • Four Essential Factors at Play in Ethical Moral
    Choices
  • Three Models of Management Ethics
  • Making Moral Management Actionable
  • Developing Moral Judgment
  • Summary of Forces

3
Introduction to Chapter Six
  • Business Ethics
  • Publics interest in business ethics increased
    during the last four decades
  • Publics interest in business ethics is spurred
    by the media

4
High Profile Ethical Scandals in Business
  • WorldCom / Enron Accounting Fraud
  • Shell Proposed sinking of North Sea oil rig
  • Pfizer Drug Overcharging
  • Sothebys Price-fixing
  • New York Times Plagiarism
  • NBC Faking the evidence
  • Walkerton Falsifying records
  • UofT Law School Students Lying about grades to
    employers

5
Publics Opinion of Business Ethics
  • Gallup Poll finds that only 17 percent to 20
    percent of the public thought the business
    ethics of executives to be very high or high
  • To understand public sentiment ask
  • Has business ethics really deteriorated?
  • Has reporting become more frequent and vigorous?
  • Are past acceptable practices becoming no longer
    socially acceptable?

6
Business Ethics What Does It Really Mean?

Ethics Today vs. The Past
Societys Expectations
Expected and Actual Levels of Business Ethics
Ethical Problem
Actual Business Ethics
Ethical Problem
1950s
Early 2000s
Time
7
Business Ethics What Does It Mean?
  • Definitions
  • Ethics is a set of moral principles and values
  • Moral conduct is behaviour that is right or wrong
  • Business ethics involves good and bad practices
    and behaviours that takes place within a business
    context

8
Business Ethics
  • Two Key Branches of Ethics
  • Descriptive ethics involves describing,
    characterizing and studying morality
  • What is
  • Normative ethics involves supplying and
    justifying moral systems
  • What should be

9
Conventional Approach to Business Ethics
  • Conventional approach to business ethics involves
    comparing a decision or practice to prevailing
    societal norms
  • Pitfall ethical relativism
  • Decision or Practice Prevailing Norms

10
Sources of Ethical Norms

11
Ethics and the Law
  • Law often represents an ethical minimum
  • Ethics often represents a standard that exceeds
    the legal minimum

Frequent Overlap
Ethics
Law
12
Ethics, Economics, and Law
13
Making Ethical Decisions
14
Four Essentials Factors at Play
  1. Forensic Accounting The 20 Angel Rule
  2. Self-interested Consequences The 60 Rule
  3. Social Norms of Fairness The Last
    20
  4. The Domino Effect

15
Three Models of Management Ethics

16
Characteristics of Immoral Managers
  • Intentionally do wrong
  • Self-centered and self-absorbed
  • Care only about self or organizations profits
  • Actively oppose what is right, fair, or just
  • Exhibit no concern for stakeholders
  • Are the bad guys
  • An ethics course probably would not help them

17
Characteristics of Moral Managers
  • Conform to high level of ethical or right
    behavior
  • Conform to high level of personal and
    professional standards
  • Ethical leadership is commonplace
  • Goal is to succeed within confines of sound
    ethical precepts
  • High integrity is displayed
  • Embrace letter and spirit of the law
  • Possess an acute moral sense and moral maturity
  • Are the good guys

18
Characteristics of Amoral Managers
  • Intentionally Amoral Managers
  • Dont think ethics and business should mix
  • Business and ethics exist in separate spheres
  • A vanishing breed
  • Unintentionally Amoral Managers
  • Dont consider the ethical dimension of decision
    making
  • Dont think ethically
  • Have no ethics buds
  • Well-intentioned, but morally casual or
    unconscious
  • Ethical gears are in neutral

19
Three Models of Management Morality and Emphasis
on CSR
20
Moral Management Models and Acceptable
Stakeholder Thinking
21
Making Moral Management Actionable
  • Senior management leads the transition from
    amoral to moral management
  • Business ethics training
  • Codes of conduct
  • Mission/Vision statements
  • Ethics officers
  • Tighter financial controls
  • Ethically sensitive decision-making processes
  • Leadership by example
  • Recognize that amoral management exists

22
Developing Moral Judgment
Kohlbergs Levels of Moral Development
Level 1
Preconventional Level
Level 2
Conventional Level
Level 3
Postconventional Level
23
Developing Moral Judgment
24
Forces That Shape Managerial Ethics
Personal Ethics
Organizational Culture
Beliefs and Values Moral Development Ethical
Framework
Rituals, Ceremonies Stories, Heroes Language,
Slogans Symbols Founder, History
Is Decision or Behavior Ethical
and Socially Responsible?
External Stakeholders
Organizational Systems
Government Regulations Customers Special Interest
Groups Global Market Forces
Structure Policies, Rules Code of Ethics Reward
System Selection, Training
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