Business Ethics misbahuddin azzuhri

Ethical Issues & Dilemmas in Business Business Ethics

Justice as an Objective Distributive justice-an evaluation of the outcomes or results of a business relationshipDistributive justice-an evaluation of the outcomes or results of a business relationship Procedural justice-based on the processes and activities that produce the outcomes or resultsProcedural justice-based on the processes and activities that produce the outcomes or results Interactional justice-based on an evaluation of the communication processes used in business relationships (often based on the accuracy of information provided)Interactional justice-based on an evaluation of the communication processes used in business relationships (often based on the accuracy of information provided)

Ethical Issues are... problems, situations, or opportunities requiring an individual to choose among actions that may be evaluated as right or wrong, ethical or unethical ethical issues arise because of: –conflict among personal/organizational values –conflicts with societal values

What do you see as some of the causes of unethical behavior?

Influences on Ethical Behavior... personal values attitudes/behaviors of supervisor attitudes/behaviors of senior management internal drive to succeed performance pressures no threat of punishment friends/coworkers

Causes of Unethical Behavior... meeting overly aggressive financial or business objectives meeting schedule pressures helping the organization survive rationalizing that others do it resisting competitive threats saving jobs

Classification of Ethical Issues... conflict of interest honesty & fairness communications issues organizational relationships

Conflict of Interest... exists when an individual must choose whether to advance his or her own personal interests, those of the organization, or some other group must be able to separate personal interests from business dealings bribery is a significant concern

Honesty & Fairness honesty relates to truthfulness, integrity & trustworthiness fairness related to being just, equitable & impartial breaking or bending laws violates trust business should not be played as a “game” lack of rules & poor enforcement leads to unethical behavior

Communications... issues involved relate to advertising, product safety, pollution, & employee work conditions lying is a major ethical issue with internal & external communications false advertising relates to: –exaggerated claims –concealed facts & ambiguous statements –lying

Organizational Relationships... relate to behavior of organizational members toward customers, suppliers, subordinates, superiors, peers & others plagiarism is one ethical issue of concern to organizations

Ethical Issues Related to Ownership... owners have an obligation to society as well as their employees & customers –minimize pollution –compensate workers fairly –produce safe products must be sensitive to legal & ethical risks of their industry & region

Financial Responsibilities... reporting & use of the companies finances pricing products/services fairly avoiding any antitrust activities –price fixing sensitivity to socially responsible investing

Employees & Management Concerns... employee theft, sabotage & competitive intelligence fear of layoffs salary plateaus upward mobility discrimination privacy & data access health & safety

Consumer & Marketing Issues... Must consider consumer feedback –safety –environmental (can lead to boycotts) –maximize positive publicity & avoid negative

Ethical Dilemmas 1 3 2b 2a Venn Diagram for Ethical Decision Making Area 3: Legal and ethical, but not profitable. Find ways to seek profitabilityArea 3: Legal and ethical, but not profitable. Find ways to seek profitability Area 2a: Profitable and legal. Proceed cautiouslyArea 2a: Profitable and legal. Proceed cautiously Area 2b: Profitable and ethical. Probably legal too. Proceed cautiouslyArea 2b: Profitable and ethical. Probably legal too. Proceed cautiously Area 1: Profitable, legal, ethical. Go for it!Area 1: Profitable, legal, ethical. Go for it!

That’s All Misbahuddin Azzuhri

Case Discussion Case 1: Wal-Mart: The Challenge of Managing Relationships with Stakeholders After Class Discussion please submit the results according to your group opinionAfter Class Discussion please submit the results according to your group opinion