Apply ethics to demonstrate trustworthiness. 2.08 Assess risks of personal decisions Created by: D. Burns, J. Bailey, J. Loudell, J. Winfree

Ethics Guidelines for human behavior; the study of moral choices and values; choosing between right and wrong.

Ethical behavior Knowing the difference between right and wrong and consciously choosing to do right.

Code of ethics A systematic set of rules and procedures used to guide the behavior of an individual, a business, or a culture.

Business ethics Applying principles of right and wrong to situations in the workplace.

Personal & Business Ethical Decisions Generate & sustain trust Demonstrate respect, responsibility, fairness & caring Demonstrate good citizenship Making ethical decisions requires: Commitment – the desire to do the right thing regardless of the cost Consciousness – awareness to act consistently & apply moral convictions to daily behavior Competency – ability to collect & evaluate information, develop alternatives, & foresee potential consequences

Ethical Dilemmas Arise when responsibilities & loyalties conflict A decision about the appropriate (ethical) course of action must be made Are you willing to sacrifice pride, integrity, reputation and honor by making an unethical choice? Are you willing to suffer the consequences of a bad choice?

How to Make Ethical Decisions Think about the impact of your actions on all the stakeholders! Stakeholders are those people affected by a decision. Determine who is likely to be helped or harmed. Avoid or reduce the harm. Ask yourself whether your options are trustworthy, respectful, responsible, fair, caring and examples of good citizenship. Ethical values (trustworthiness, respect, responsibility, fairness, caring and citizenship) outrank and override unethical ones (money, popularity and prizes)!

How to Make Ethical Decisions The long run outranks the short run. Go with the choice that will produce the most good for the most people. Eliminate choices that have nothing to do with ethics (like power, popularity and prizes). Then pick the most ethical option left. Make your decision and take responsibility for the outcome Whether good or bad

Ethics & Risk The Risk of Business as Usual Companies are put at risk when leaders fail to see that ethical leadership is vital for effective & responsible management Poorly managed corporate risk/ethical decisions have irrevocable human & financial consequences Deaths & accidents from the unintended acceleration in Toyota vehicles Deaths of oil platform workers in the BP explosion & subsequent environmental catastrophe in the Gulf of Mexico

Factors impacting risk/ethical decisions Perception – How you see things Is cheating ethical or unethical? If you consider it ethical in some situations – why? Emotions – If your family has no food – do you steal food from the grocery store? Known vs. Unknown information Using a photo without knowing if it is copyrighted or not

Factors Businesses Should Consider when Assessing Risks/Ethical Decisions Time – “Time is Money” Coming in to work 5 minutes late or leaving early Probability – The chance that the outcome will be negative If I speed, what are the chances I’ll get caught or have an accident Magnitude – The number of people affected Oil spill in the Gulf of Mexico Cost vs. benefit – human & financial Physical & Personal distance How might this decision affect you personally

Ethical responsibility towards customers Treat all customers with respect. Be honest. Do not exaggerate the merits of your products/services. Inform customers of possible dangers of your products/services. Handle all disputes fairly.

Ethical responsibility towards employees Establish an ethical workplace. Hold yourself to high ethical standards Serve as a role model to others Always treat employees fairly & honestly Employees tend to copy the behavior of the business owner Ethical behavior gains the trust & respect of customers

Ethical responsibility towards employees Create a written code of ethics to set guidelines to help the business owner and employees make ethical decisions. Establish company policies and procedures to let business owners and employees know how to act in certain situations. Have employees attend an orientation meeting on this information

Ethical responsibility towards the community Contribute money to charities, cultural institutions, and other reputable causes. Get involved. Donate products and services.