Business Ethics

What is Ethics? Ethics: A set of moral principles, especially ones relating to or affirming a specified group, field, or form of conduct; govern a persons or groups behavior. Business Ethics: Study and examination of moral social responsibility in relation to business practices and decision making in business.

Business Ethics Checklist  What are the facts?  Identify the critical issues.  Identify the stakeholders who will be affected by the decision and describe why they would be affected.  Identify the alternatives  Discuss ethical implications of each alternative.  Come to a result and justify that result based upon the results of this analysis.

What are the facts? Restate the key facts of the situation. Are there any other facts you want to investigate?

Identify the critical issues Why is this not an easy decision?

Identify stakeholders Stakeholders are people potentially affected by the decision. This list might include subordinates, bosses, shareholders, suppliers, customers, members of the business in which the community operates, society as a whole, or even more remote stakeholders, such as future generations.

Identify the alternatives List at least two reasonable alternatives on how to resolve the problem

Discuss the ethical implications of each alternative Is the alternative legal? What are the consequences of this alternative? Does the alternative violate any of your own important personal values? How would the alternatives look if they were displayed on television?

Come to a result You must come to an answer and that answer needs to be consistent with the steps you just performed.

Example Joe Schmo works for ABC Co. He is scheduled to have an hour lunch break off the clock everyday. Sometimes Joe only clocks out for half an hour even though he continues to take the full hour for his lunch. Sally Sue notices that Joe is not being completely honest about his lunch break and debates telling her boss. She is worried that if she doesn’t speak up she will be punished for knowing and not telling. She is also worried that the company will be hurt if she doesn’t come forward. If she does tell she is worried that she will be reprimanded for being a tattle tale. What should Sally do?

Example: What are the facts? Joe Schmo is being unethical about his lunch break. He is costing the company money for un-worked time. He is being dishonest. If Sally Sue doesn’t tell she too will be unethical.

Example: Identify the Critical Issues Sally Sue does not want to be seen as a tattle tale. Joe is being unethical Bad press for company if not handled correctly

Example: Identify Stakeholders ABC Company Employees Shareholders Customers

Example: Identify Alternatives Sally can continue to allow Joe to be dishonest about his lunch break and not tell management Sally can tell upper management about Joe to resolve the issue.

Example: Ethical Implications of Not Telling Management Is the alternative legal? No, not telling is allowing Joe to steal time and money from the company. What are the consequences of this alternative? Stakeholders lose money, unethical for Sally not to tell, situation in general is unethical Does the alternative violate any of your personal values? Sally knows it’s not right. She doesn’t want the company to be hurt. How would this look on TV? Bad press for the company if it was released on TV. Sally would probably be the center of the story for not telling.

Example: Ethical Implications of telling management Is the alternative legal? Yes. Sally may just be nervous to tell on somebody. What are the consequences of the situation? Joe would probably be fired and Sally would be relieved that she did the right thing. The company would be better off in the end as well. Does this violate any personal values? No, Sally knows that this is the right thing to do. How would this look on TV? Good press for the company. It would show other employees that it is OK to be honest.

Example: Come to a result Sally needs to tell management because it benefits the company in the long run and it is the correct ethical decision to make.

Take care of your employees - Video Taking care of your employees can be a huge preventative factor when it comes to ethics!

How to prevent unethical issues In training introduce company’s ethics checklist and emphasize the importance of it Test employees over the checklist Have frequent meetings with employees based on ethics only Make ethics checklist public so people and employees know how important ethics are to the company. Doing so holds the company to a certain standard. Distribute throughout the office so each employee has his or her own copy.

How to prevent cont… Employ audit firms to perform frequent audits so employees are aware they they will get caught if they do something unethical Outline an extensive section for production ethics in the development stage of your checklist your plant managers should check measures for worker safety, production sustainability, and product testing before proceeding with the project

How to deal with unethical behavior Enforce company policy that explains zero tolerance for unethical behavior in very specific areas. Termination Memo to remaining employees stressing again how serious the company is about the code of ethics and that there are consequences. Encourage employees to report unethical behavior. Don’t be afraid to get someone in trouble.

Optional Ethics Video Watch this video if you would like some additional humorous information on business ethics.

References business-ethics-checklist.html al_behavior.php Prof. Jason Fichtner, Drake University