Introduction to Business Ethics

Overview of the Course Introductions Syllabus Text and other readings Assignments Expectations Questions?

How Ethical Is American Business? 1994 Ethics Resource Center survey of 4,035 American workers: nearly one-third said they feel pressured by their companies to violate official company policies in order to achieve business success. one-third witnessed violations of company ethics policies, while only half of these reported the violations.

2003 Update: 22% had observed violations; and 65% of these reported them. only 10% felt pressured to commit violations themselves.

BUT…. One-third said success by questionable methods was admired at work Companies in transition (mergers, etc.) had twice the average rate of violations. Young workers felt much more pressure, reported less, and were more likely to feel that ethical behavior wasn’t supported. 42% of those who reported were not satisfied with the company’s response.

Most Common Violations: Lying to supervisors Falsifying records Stealing Sexual harassment Drug or alcohol abuse at work Conflicts of interest Verbal abuse

More Examples… Deceit Fraud Influence buying Hiding information Taking unfair advantage Misrepresentation Divulging secrets Promise-breaking Abuse of organizational systems Being an accessory

Ethics in the News Enron & Arthur Andersen Worldcom, MacLeod, Qwest Tyco, Adelphia, HealthSouth ImClone & Martha Stewart Merrill Lynch, Citibank, mutuals The Abramoff briberies of Congress Ahold, Parmalat, etc. etc. etc.

Ethics vs. Morals? What do you think the difference is? Actually, there are so many different definitions as to make the distinction meaningless. Let’s use them interchangeably.

Ethical Problems, Temptations, Dilemmas, Issues Not every business ethics situation requires a full-blown analysis! Some are problems to be solved. Some are issues that must be managed. Some are true dilemmas, where the choices aren’t clear, or the outcomes aren’t good no matter what, or the best outcome isn’t obvious. But a lot of ethics situations are simply temptations.

Problems are situations where an impediment stands between an actor or organization and some stated ethical goal. Problems just need to be solved.

Temptations are opportunities to choose wrong actions over right ones – and the actor knows the difference. Temptations need to be resisted; organizational structures and processes can help.

Dilemmas are conflicts among rights (or among wrongs), where the decision maker must balance competing claims and justify a choice. Dilemmas require fact-finding, analysis, and a more complex decision process.

Issues are situations with ethical content, but no clear-cut decision point. multiple decision points, multiple actors, no single one with authority or knowledge to settle the issue. may involve disagreements on the problem and solutions, based in deeply-held values. Issues have a life cycle – emerging, developing, mature, declining. Issues must be managed over time, with the help of others.

The Point: Not all ethics concerns are difficult. Some, in fact, are easy to resolve. Others require thought, analysis, and management. Still others require creative approaches to avoid causing bigger problems. Others still are truly not resolvable and so the company’s approach must be managed.

What Is Ethics? ANALYSIS: the study of moral principles and decision making. DEVELOPMENT: the development of reasonable standards and processes for moral decision making. STANDARDS: a set of rules, or a code, governing what a person should do when ethical problems arise. ACTION: using a process of moral decision making to make decisions about ethical problems.

What ISN’T Ethics? Preaching, moralizing Just our opinions Legal compliance Obeying the demands of society Obeying the demands of your role

Ethics education helps us to ARTICULATE our values clearly, to APPLY them to new situations, to frame BETTER REASONS for the ethical decisions and actions we take, and, to achieve BETTER OUTCOMES for the stakeholders of business organizations.

In this class, you’ll learn To about many of the situations in business that require ethical judgment, To recognize them as ethical situations, To use the language of ethics and values to analyze them, To decide rationally what is the best course of action, and then To act: EXPOSURE  RECOGNITION  LANGUAGE  ANALYSIS  DECISION  ACTION

To Handle Ethics Problems Well, We Need to Use Reason: Stakeholders Consequences Rights and duties Justice – process & distribution Commonsense rules of morality Individual and collective balancing

To Reason About Ethics, We Need to: Build good arguments rather than opinions. (avoid "I feel that....") Test arguments on parallel cases. Listen to the views of others (and listen for silence). Understand disagreement. Respect persons and learn from their positions.

Why Worry About Ethics? It’s the right thing to do! Self-respect and reputation. Avoid stakeholder problems, lawsuits, rising insurance costs. Avoid additional regulation. Avoid damage from unfair competitive practices, and...

Stay out of jail.