BA 385: Who’s Pencil Is It? Chapter Six: Business Ethics Fundamentals

Business Ethics: What Does It Really Mean? Definitions Ethics involves a discipline that examines good or bad practices within the context of a moral duty Moral conduct is behavior that is right or wrong Business ethics include practices and behaviors that are good or bad

Business Ethics: What Does It Really Mean? 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”

Business Ethics Categories Employee-Employer Relations Employer-Employee Relations Company-Customer Relations Company-Shareholder Relations Company-Community/Public Interest

Public’s 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 towards business ethics, ask three questions: Has business ethics really deteriorated? Are the media reporting ethical problems more frequently and vigorously? Are practices that once were socially acceptable no longer socially acceptable?

First conviction in HP board leak scandal case Business Ethics in the News: Dirty dining? ‘Dateline’ hidden cameras investigate cleanliness of America’s top 10 fast food chains First conviction in HP board leak scandal case Enron scandal • Fast food chains under scrutiny 'Dateline' hidden cameras investigate cleanliness of America's top fast food chains. NBC's Lea Thompson reports. Dateline NBC Wall Street scandals

Conventional Approach to Business Ethics Conventional approach to business ethics involves a comparison of a decision or practice to prevailing societal norms Pitfall: ethical relativism Decision or Practice Prevailing Norms (padding expense acct.) (my boss does it)

Sources of Ethical Norms Fellow Workers Family Friends The Law Regions of Country Profession Employer Society at Large Local community Religious Beliefs The Individual Conscience

Business Response to Ethics: The Ethics Officer Ethics Officers Association is a professional association of managers of corporate ethics and compliance. Visit EOA’s web site at:: www.eoa.org

Ethics, Economics, and Law

Four Important Ethical Questions What is? What ought to be? How to we get from what is to what ought to be? What is our motivation for acting ethically?

3 Models of Management Ethics Immoral Management— A style devoid of ethical principles and active opposition to what is ethical. Moral Management— Conforms to high standards of ethical behavior. Amoral Management Intentional - does not consider ethical factors Unintentional - casual or careless about ethical considerations in business

Three Approaches to Management Ethics

Three Models of Management Morality and Emphasis on CSR

Moral Management Models and Acceptable Stakeholder Thinking

Developing Moral Judgment

Elements of Moral Judgment Amoral Managers Moral Managers Moral Imagination Ability to perceive web of competing economic, moral and ethical relationships. Moral Identification Ability to discern the relevance or nonrelevance of moral factors that are introduced into a decision-making situations. Moral Evaluation Have clear principles, develop processes for weighing ethical factors, develop way to identify ethical and economic outcomes. Tolerance of Moral Disagreement and Ambiguity Ability to deal in “gray” areas and operate within disagreement. Integration of Managerial and Moral Competence See each decision within a moral perspective that is integrated with a management perspective. A Sense of Moral Obligation “Get it”, that is, have a sense of integrity that oversees decision-making processes and understands what is at stake for all.