BUSINESS & SOCIETY Ethics and Stakeholder Management Chapter 7 BUSINESS & SOCIETY Ethics and Stakeholder Management Carroll & Buchholtz 6e PERSONAL and ORGANIZATIONAL ETHICS Prepared by Deborah Baker Texas Christian University Chapter 7- Business and Society: Ethics and Stakeholder Management, 6e • Carroll & Buchholtz Copyright ©2006 by South-Western, a division of Thomson Learning.  All rights reserved

Ethical Issues Addressed at Personal Level Situations faced in personal lives Organizational Level Workplace dilemmas faced as employees Chapter 7-

Ethical Issues Addressed at Industry Level Situations where a manager or organization might influence business ethics at the industry level Societal and Global Levels Local-to-global situations confronted indirectly as a management team (Ch. 9) Chapter 7-

Personal and Managerial Ethics Conventional approach (Ch. 6) Principles approach (Ch. 7) Ethical tests approach Resolving Ethical Conflicts Chapter 7-

Principles Approach to Ethics Principle of … Utilitarianism Rights Justice Whose rights are right? Page 219 Caring Virtue ethics Servant Leadership Golden Rule Chapter 7-

Reconciling Ethical Conflicts Honor written or verbal obligations There are certain ideals worth striving for Choose the action that produces the greatest good & the least harm. Consider the effects of our decisions on SH Ethics in Practice page 224 Chapter 7-

Ethical Tests Approach What action should I take in this situation? Test of One’s Best Self Test of Making Something Public Test of Ventilation Test of Common Sense Test of the Purified Idea Gag Test Chapter 7-

Making Organizational Decisions What factors contribute to unethical decision-making (at work)? What steps can we take to improve an organization’s ethical climate? Chapter 7-

Factors Contributing to Unethical Behavior Behavior of superiors (poor role models) Behavior of peers (desensitization) Ethical practices of one’s industry or profession Formal organizational policy (or lack of one) Personal financial need Which one is most influential? http://www.ethics.bellsouth.com @ Chapter 7-

Behavior of superiors Why? Top __% Middle __% Lower __% What % of managers perceive pressure to compromise personal standards to achieve company goals? Top __% Middle __% Lower __% Why? Chapter 7-

Behaviors of Superiors or Peers that Create Questionable Moral Climate Amoral decision making Acceptance of legality as a standard of behavior “Bottom-line mentality”, expectations of loyalty & conformity Absence of ethical leadership Objectives that overemphasize profits Fundamental attribution bias Insensitivity toward how subordinates perceive pressure to meet goals Inadequate formal ethics policies. Chapter 7-

How do we Improve the Ethical Climate? Moral Management Ethics Programs and Officers Realistic Objectives Ethical Decision Making Strategies Codes of Conduct # 1 reason? Chapter 7-27 Board of Directors Oversight Ch 19 Corporate Transparency Whistle Blowing Mechanisms Discipline of Violators Ethics Audits Effective Communication of what? Ethics Training Chapter 7-

Board of Director Oversight The 2002 Sarbanes-Oxley Act Companies are required to protect whistle-blowers without fear of retaliation It is a crime to alter, destroy, conceal, cover up or falsify documents to prevent its use in a federal government lawsuit Chapter 7-

Example of Quick Ethics Screen Is it legal? Is it in line with co. values? Would I want everyone to know about this? Is it fair to all concerned? How will it make me feel about myself? Chapter 7-

For next class  By April 23rd Read case 14: Toxic Tacos Read: Why Hospitals Want Your Credit Report By April 23rd Choose the topic for your research paper-- Whose stance will you be taking? Chapter 7-