Ethics in the Business System Chapter 7, Steiner & Steiner Business Environment . Do businesses and business corporations have to adhere to the same set of ethical standards as individuals?, or should business be “amoral?” What are the major sources of ethics?, and Your major sources of ethics? What is/will be your ethical standard in business? How will you manage yourself? How would you recommend that your business maintain ethical standards? Ethics in the Business System

Ethics in the Business System Objectives Do businesses and business corporations have to adhere to the same set of ethical standards as individuals?, or should business be “amoral?” Describe the four major sources of ethics. Define “ethics” Define your basic ethical values and apply them in business cases Ethics in the Business System

Ethics in the Business System Correct Craft Review the facts of the case Was it ethical to cause that much suffering? How might you have responded to inspector? Ethics and execution are two different issues. Ineffective decisions can harm people even in an ethical stance Ethics in the Business System

Two Theories of Business Ethics Theory of Amorality Herbert Spencer Family ethics—relations and friends State ethics—merit through competitive justice Theory of Moral Unity One set of standards Business People Government Spencer: family ethics vs. state ethics on the Mormon basketball game in Eugene: He touched it last – he turned to me “No, I believe you touched it last.” Ethics in the Business System

Permissions to Break Your Moral Code Ignorance Incapacity Unrealistic costs No power to influence and outcome No alternatives External forces Prevent all accidents Change laws of Islam Nazi Germany resource allocation Corrupt taxes in a country Ethics in the Business System

Ethics in the Business System Major Sources/Theme? Religion Philosophical systems Cultural Experience Legal System Theme is – reciprocity/mutual help Ethics in the Business System

Ethics in the Business System--sources Religion Reciprocity Religious works Teachings of leaders US Impact 67% of top execs attend church regularly Ethics in the Business System--sources

Western Philosophical Systems Greeks– Absolute justice Golden Mean Christian ethics God’s will Ten Commandments Golden Rule Ethics in the Business System--sources

Western Philosophical Systems (cont.) Secular Philosophies of Idealism Logic leads to ethics Kant’s Imperative Bentham’s utilitarianism Pleasure to the most, Pain to the fewest Rights: Locke – Life, liberty & pursuit of: Happiness or property Hand out the UN Universal Declaration on Human Rights. Take five minutes—read it. Ethics in the Business System--sources

Western Philosophical Systems (cont.) Realist School of Ethics Evil is permanent in human nature Ends justify the means Fit survive, and society prospers Idealism in business is unachievable Ethics in the Business System--sources

Ethics in the Business System--sources Cultural Experience Hunting and gathering Agricultural setting Industrial setting Information age setting? Rules for hunters and gatherers – ask the hunters Ask the agriculturalists Ask the industrialists global corporations, democracy, materialsim, consumption, growth Ethics in the Business System--sources

Ethics in the Business System--sources The Legal System Fines – US Sentencing Commission Court awarded damages Prosecution of individual managers Compliance standards handout Suppose you are asked to check into a plant or store where something has happened. You go in and they handed you this paper. What questions would you ask to see if it was a “paper” compliance? Read them the reasons why not to adopt the standards. Would you recommend it for your firm? Ethics in the Business System--sources

Business Ethics in Other Countries Additonal sources in other countries Historical Experience Stage of Economic Development Doesn’t Historical Experience hold true in the US, also? Don’t actions engender philosophies, which rationalize actions? Stage of economic development? the stories of western land in the US – Tennessee, the revolutionary war, and Davy Crockett The status of our Internet Ethics in the Business System

Ethics in the Business System Ethical Behavior Ethical relativism Ethics are subjective No ethical superiority Ethical Universalism Basic needs of justice, equity, humility Overlapping consensus Human dignity—not to be manipulated Basic rights Support institutions & bonds of a community Hand out the UN Universal Declaration of Human Rights Ethics in the Business System

Factors that Influence Managerial Ethics Leadership & fast tracker at Bottlg Plt Strategy and Performance – Pru-Bache Corporate Culture Harvard MBA Make your numbers Be loyal, team player Be legal Be realistic (not idealistic) Moral Muteness Ethics in the Business System

Factors that Influence Managerial Ethics (cont.) Individual Characteristics Religious conviction Age? Business students vs. managers? Results can’t be consistently confirmed Ethics in the Business System

How Corporations Manage Ethics Ethics programs Scandal Muted damages General Dynamics Major effort Little progress Ethics in the Business System

Guidelines for Managing Ethics Programs Top Management Codes of ethics Organizational structure Training Enforcement Cases on page 229 Compliance standards handout Suppose you are asked to check into a plant or store where something has happened. You go in and they handed you this paper. What questions would you ask to see if it was a “paper” compliance? Read them the reasons why not to adopt the standards. Would you recommend it for your firm? Ethics in the Business System

Ethics in the Business System Objectives Do businesses and business corporations have to adhere to the same set of ethical standards as individuals?, or should business be “amoral?” Describe the four major sources of ethics. Define “ethics” Define your basic ethical values and apply them in business cases Ethics in the Business System