Introduction to Issues in Business Ethics

Two opposing views on Business Ethics Business Ethics is simply a field of human activity and as such is governed by the same moral principles as in other spheres of human life Business Ethics is simply a field of human activity and as such is governed by the same moral principles as in other spheres of human life Business can be seen as a form of warfare in which the rules of the jungle applies. Business can be seen as a form of warfare in which the rules of the jungle applies.

Cultural & Religious Traditions Social & Economic Situations Ethical Principles of Analysis Value Judgments Moral Moral StandardsDilemmas Benefits to Some Harm to Others Relationships between Morals, Values and Ethics Source: L T Hosmer (1994)

Ethics and Behaviour What happens to the morale of managers ? What happens to the morale of managers ? Can discipline be enforced when management are seen as corrupt and sleazy? Can discipline be enforced when management are seen as corrupt and sleazy? Can firms attract good people if they are seen as operating unethically ? Can firms attract good people if they are seen as operating unethically ? Can companies sustain good long term relationships with its key stakeholders if it disregards good ethical standards ? Can companies sustain good long term relationships with its key stakeholders if it disregards good ethical standards ?

Ethical Issues Ethical Problems as Management Dilemmas Ethical Problems as Management Dilemmas Ethical Problems and Issues are Complex and have far reaching consequences Ethical Problems and Issues are Complex and have far reaching consequences

Ethical Problems as Mgmt Dilemmas Dilemmas involved in environmental protection Dilemmas involved in environmental protection Dilemmas involved in the issues of safety Dilemmas involved in the issues of safety Dilmmas involved in the issues of privacy Dilmmas involved in the issues of privacy Dilemmas involved in the issues of location and costs downsizing Dilemmas involved in the issues of location and costs downsizing Dilemmas involved in issues of competition Dilemmas involved in issues of competition

Some Examples of Ethical Issues Insider dealing and making a false market Insider dealing and making a false market Cartel behaviour and price fixing Cartel behaviour and price fixing Advertising claims that are false Advertising claims that are false Product performance Product performance Pollution and environmental issues Pollution and environmental issues Community relations and jobs issues Community relations and jobs issues Advertising approaches Advertising approaches

Characteristics of Ethical Decisions in Management Most ethical decisions have extended consequences Most ethical decisions have extended consequences Most ethical decisions have multiple alternatives Most ethical decisions have multiple alternatives Most ethical decisions have uncertain outcomes Most ethical decisions have uncertain outcomes Most ethical decsions have personal implications Most ethical decsions have personal implications

How can we Analyse Ethical Issues ? Economic Analysis - Cost-benefit etc.. Economic Analysis - Cost-benefit etc.. Legal Analysis - Can we legally do this and what is the legal downside ? Legal Analysis - Can we legally do this and what is the legal downside ? Ethical Analysis - What is the ethical and moral responsibility that we face ? Ethical Analysis - What is the ethical and moral responsibility that we face ?

Ethical Decision Process Step OneEvaluate decision from ethical standpoint. Identify affected stakeholders. Step TwoEvaluate decision from ethical standpoint. What are the moral issues in this case ? Step ThreeEstablish moral intent Step FourEngage in ethical behaviour

Ethical Emerging Ethical Responsive Legalistic Amoral Balanced Concern Unbalanced Concern Concern for Profits/Ethics Stage 5 Stage 4 Stage 3 Stage 2 Stage 1 Development Stages Ethical Balance in Business Operations Source: Reidenbach & Robin

Possible Responses to Ethical Dilemmas Avoid Thinking About it Avoid Thinking About it Obey Orders Obey Orders Leave the Organisation Leave the Organisation Conscientiously Object Conscientiously Object Secretly Tell the Press or Government Secretly Tell the Press or Government Publicly Tell the Press or Government Publicly Tell the Press or Government Build Consensus for Change Internally Build Consensus for Change Internally

Finally Live Honourably Live Honourably Hurt Nobody Hurt Nobody Render to each his Due Render to each his Due