Developed by Cool Pictures & MultiMedia PresentationsCopyright © 2003 by South-Western, a division of Thomson Learning. All rights reserved.Developed by Cool Pictures & MultiMedia PresentationsCopyright © 2003 by South-Western, a division of Thomson Learning. All rights reserved.

Developed by Cool Pictures & MultiMedia PresentationsCopyright © 2003 by South-Western, a division of Thomson Learning. All rights reserved. Ethics The code of moral principles and values that govern the behaviors of a person or group with respect to what is right or wrong. Business Ethics Magazine is an excellent site for reviewing ethical issues

Developed by Cool Pictures & MultiMedia PresentationsCopyright © 2003 by South-Western, a division of Thomson Learning. All rights reserved. Three Domains of Human Action Amount of Explicit Control HighLow Domain of Certified Law (Legal Standard) Domain of Ethics (Social Standard) Domain of Free Choice (Personal Standard)

Developed by Cool Pictures & MultiMedia PresentationsCopyright © 2003 by South-Western, a division of Thomson Learning. All rights reserved. Ethical Dilemma A situation that arises when all alternative choices or behaviors have been deemed undesirable Potentially negative ethical consequences, making it difficult to distinguish right from wrong. A situation that arises when all alternative choices or behaviors have been deemed undesirable Potentially negative ethical consequences, making it difficult to distinguish right from wrong.

Developed by Cool Pictures & MultiMedia PresentationsCopyright © 2003 by South-Western, a division of Thomson Learning. All rights reserved. Criteria For Ethical Decision Making Most ethical dilemmas involve  A conflict between needs of the part & whole  The individual versus the organization  The organization versus society as a whole

Developed by Cool Pictures & MultiMedia PresentationsCopyright © 2003 by South-Western, a division of Thomson Learning. All rights reserved. Ethical Decision Making Approaches Utilitarian Approach Individualism Approach Moral-Rights Approach Justice Approach Utilitarian Approach Individualism Approach Moral-Rights Approach Justice Approach

Developed by Cool Pictures & MultiMedia PresentationsCopyright © 2003 by South-Western, a division of Thomson Learning. All rights reserved. Utilitarian Approach  Moral behavior produces the greatest good for the greatest number  Critics fear a “Big Brother” approach and ask if the common good is squeezing the life out of the individual

Developed by Cool Pictures & MultiMedia PresentationsCopyright © 2003 by South-Western, a division of Thomson Learning. All rights reserved. Individualism Approach  Acts are moral when they promote the individual's best long-term interests, which ultimately leads to the greater good  Individual self-direction paramount  Individualism is believed to lead to honesty & integrity since that works best in the long run

Developed by Cool Pictures & MultiMedia PresentationsCopyright © 2003 by South-Western, a division of Thomson Learning. All rights reserved. Moral-Rights Approach Moral decisions are those that best maintain the rights of those people affected by them. An ethical decision is one that avoids interfering with the fundamental rights of others

Developed by Cool Pictures & MultiMedia PresentationsCopyright © 2003 by South-Western, a division of Thomson Learning. All rights reserved. “Moral Rights Issues” 1. The right of free consent 2. The right to privacy 3. The right of freedom of conscience 4. The right of free speech 5. The right to due process 6. The right to life & safety

Developed by Cool Pictures & MultiMedia PresentationsCopyright © 2003 by South-Western, a division of Thomson Learning. All rights reserved. Justice Approach Moral Decisions must be based on standards of equity, fairness, and impartiality Three types of Justice Approaches:  Distributive Justice  Procedural Justice  Compensatory Justice

Developed by Cool Pictures & MultiMedia PresentationsCopyright © 2003 by South-Western, a division of Thomson Learning. All rights reserved. Distributive Justice Treatment of people should not be based on arbitrary characteristics People should be treated differently in proportion to the differences among them Treatment of people should not be based on arbitrary characteristics People should be treated differently in proportion to the differences among them

Developed by Cool Pictures & MultiMedia PresentationsCopyright © 2003 by South-Western, a division of Thomson Learning. All rights reserved. Procedural Justice Rules should be clearly stated Rules should be consistently and impartially enforced

Developed by Cool Pictures & MultiMedia PresentationsCopyright © 2003 by South-Western, a division of Thomson Learning. All rights reserved. Compensatory Justice  Individuals should not be held responsible for matters they have no control over  Individuals should be compensated for the cost of their injuries by the party responsible

Developed by Cool Pictures & MultiMedia PresentationsCopyright © 2003 by South-Western, a division of Thomson Learning. All rights reserved. Factors Affecting Ethical Choices The Manager Levels or stages of moral development  Pre-conventional  Conventional  Post-conventional The Organization

Developed by Cool Pictures & MultiMedia PresentationsCopyright © 2003 by South-Western, a division of Thomson Learning. All rights reserved. Levels of Personal Moral Development

Developed by Cool Pictures & MultiMedia PresentationsCopyright © 2003 by South-Western, a division of Thomson Learning. All rights reserved. Social Responsibility Organization’s obligation to make choices and take actions that will contribute to the welfare and interests of society and organization Being a good corporate citizen  Difficulty in understanding social responsibility deals with “responsibility to whom?”

Developed by Cool Pictures & MultiMedia PresentationsCopyright © 2003 by South-Western, a division of Thomson Learning. All rights reserved. Total Corporate Responsibility Discretionary Responsibility Ethical Responsibility Economic Responsibility Legal Responsibility SOURCE: Based on Archie B Carroll, “A Three Dimensional Conceptual Model of Corporate Performance,” Academy of Management Review 4 (1979),499; and “The Pyramid of Corporate Social Responsibility: Toward the Moral Management of Corporate Stakeholders,” Business Horizons 34 (July-August 1991),42.

Developed by Cool Pictures & MultiMedia PresentationsCopyright © 2003 by South-Western, a division of Thomson Learning. All rights reserved. Corporate Responses to Social Demands Proactive Take social initiatives. Proactive Take social initiatives. Accommodation Accept ethical responsibility. Accommodation Accept ethical responsibility. Defense Do only what is legally required. Defense Do only what is legally required. Obstruction Fight all the way. Obstruction Fight all the way. High Low Degree of Social Responsibility

Developed by Cool Pictures & MultiMedia PresentationsCopyright © 2003 by South-Western, a division of Thomson Learning. All rights reserved. Managing Company Ethics Through:  Ethical individuals; are honest, have integrity, they strive for a high level of moral development  Ethical leadership; provides the necessary actions, are committed to ethical values and helps others to embody those values  Organizational structure, embodies a code of ethics, and methods to implement ethical behavior