1. Values & Ethics in Business

2. Values
Abstract ideals that shape an individual’s thinking and behavior – a moral compass
Instrumental values – certain way of behaving is appropriate in all situations – “means”.
Terminal values – enduring belief in the attainment of a certain end state – “ends”.

3. A moral compass These abstract ideals can result from Religion
Philosophy
Family teachings

4. Instrumental values
As the means to an end they become the ingrained ways of behavior:
Rituals
Politesse
Good habits

5. Terminal values With the end always in sight: Heaven Respect
Financial Success
Personal Independence
Power

6. Ethics
The study of moral obligation involving the distinction between right and wrong.
Business Ethics: right or wrong in the workplace – value management.

7. Two Areas of Business Ethics
Obvious mischief
Moral mazes
RIGHT vs. RIGHT

8. Common Misconduct in Organizations
Misrepresenting hours worked
Employees lying to supervisors
Management lying to employees, customers, vendors or the public
Misuse of organizational assets
Lying on reports/falsifying records
Sexual harassment
Stealing/theft
Accepting or giving bribes or kickbacks
Withholding needed information from employees, customers, vendors or public

9. Common Causes of Unethical Behavior
Pressure
Fear
Greed
Convenience

10. Causes of Unethical Behavior (cont’d)
Following boss’s directives
Meeting overly aggressive business/financial objectives
Helping the organization survive
Meeting schedule pressures
Be a team player (group think)
Rationalizing that others do it
Resisting competitive threats
Advancing own career

11. Ethical Dilemmas
Making decisions under stress or dealing with complex issues that have no clear indication of what is right or wrong.
There are NO simple ethical dilemmas…
all have layers of meaning and effect.

12. Business Ethics Myths Business ethics is a new fad.
Business ethics – religion vs. management.
Business ethics is obvious – “do good!”
Business ethics is good guys preaching to bad guys.

13. “Whistleblower’s” Reluctance
Didn’t believe action would be taken.
Feared retaliation from mgmt.
Didn’t trust confidentiality.
Feared not being a team player.
Feared retaliation from co-workers.
Didn’t know who to contact.
Nobody cares, why should I?

14. Business Ethics Myths (cont’d)
Ethics can’t be managed.
Being legal = being ethical.
Managing ethics has little practical relevance.

15. Ethical Tips for Organizations
Develop a code of ethics.
Communicate code and bake it into culture top-down.
Treat ethics as a process.
Create open lines of communication.
Set good examples.
Educate employees – frame issues through storytelling.
Value forgiveness.

16. Benefits of Managing Ethics in the Workplace
Improves society.
Maintains a moral course in turbulent times.
Cultivates employee teamwork, productivity, morale and development.
Acts as an insurance policy.

17. Benefits of Managing Ethics in the Workplace (cont’d)
Establishes values for quality management, strategic planning and diversity management.
Promotes strong public image.
It is the RIGHT thing to do!

18. Ethical Tips for Individuals
Establish personal values.
Be aware of ethical events.
Develop critical thinking techniques.
Be reflective.
Make it a priority every day.

19. “The simple step of a simple courageous man is to not take part in the lie, not to support deceit. Let the lie come into the world, even dominate the world, but not through me.”
-- Alexander Solzhenitsyn

20. Intellectual Capital
Conversion of knowledge (a raw material) into something valuable (a product of knowledge)
– Term often used interchangeably with Intellectual
Assets
Knowledge-based items that company owns or controls that will produce a future stream of benefits for the company

21. Intangible* in nature
– Sometimes called “hidden assets” because they are hard to identify and difficult to measure
– Brand names, copyrights, patents
– Processes, databases, system that give entity a competitive advantage
*intangible assets = immateriella tillgångar

22. Data can be transformed into knowledge – Information is data or ideas that have been organized or shaped in meaningful ways Knowledge can become intellectual capital – Intellectual capital is knowledge that has been acted upon and transformed into something of value to the organization

23. Creation of Intellectual Capital
Active, dynamic process that involves continuous feedback and feed-forward among data, information, knowledge and intellectual capital

24. Why is Intellectual Capital Important?
Knowledge is the key factor in the “new economy” – Rapid advancement and adoption of technology – Expansion of global marketplace – Changing character of competition True value of corporation = human competencies, databases, organizational capabilities, intangibles, ongoing coalition relationships

25. Why is Intellectual Capital Important?
Economic development is more a process of knowledge accumulation than capital accumulation (according to the World Bank) Service industries dominate and their primary resource is people – *Retailers/wholesalers respond rapidly to customer demands (i.e., provide services) – Even in manufacturing, considerable value is added through research, design, marketing, and customer support

26. Intellectual Capital Management
The first step toward management of intellectual capital is to visualize it – We need concepts, categories, models and other “knowledge structures” that clarify thinking. This is especially true for intangibles!

27. Types of Intellectual Capital
Human capital – Know-how, capabilities, skills and expertise of the human members of the organization Structural capital or organizational capital – Systems, networks, policies, culture, distributional channels and other organizational capabilities Relational capital – Connections with people outside the organization, level of backorders, customer loyalty, etc.

28. Ethics about Information
Privacy
Accessibility
Accuracy
Property
Who owns data about people?
Who owns intellectual efforts on web?
Copyrights, watermarks & other protections

29. Normative Theories of Business Ethics
Stockholder theory – Milton Freedman declares that the sole purpose of business is to increase profit. Stakeholder theory – responsibility to all those who hold a stake in firm – stockholders, customers, employees, suppliers, local community Social contract theory – consider needs of society (net gain)

30. Intellectual Property Rights
A broad term covering:
Patents (rights in inventions)
a drug compound, a phone, maybe software effects
Trade marks (rights in image and branding)
Nokia, Chanel No.5’s smell, Jacque Villeneuve’s face!
Copyright (rights in means of expression – literary and artistic works)
Picasso’s Guernica, Microsoft code, Lord of the Rings, Product Manuals

31. Less Well Known Rights
Confidentiality – information subject to a duty of secrecy
Trade secrets - Coke was a trade secret for 106 years [it is sugar, caramel, caffeine, phosphoric acid, lime juice, and vanilla essence,oils of lemon (120 parts), orange (80), nutmeg (40), cinnamon ( 40), nerol (40) and coriander(20),..]
Data Protection – rights of privacy
Design Rights – Industrial and artistic designs.

32. Why are These Rights Important?
All Intellectual Property Rights give their owner exclusive rights of dealing.
Permit exclusion of competitors.
Permits entry to a market – entry fee.
Can generate income by licensing.
Funders like IP strategies, they love patents

33. Essential Elements
Copyright – automatic right on original creation, no need to register, enforceable internationally, time limited, no lawyer needed
Trade Marks – territorial right, needs registration,
covers specific goods and services Body Shop cosmetics v car repair, no time limit, lack of confusion with other marks essential, lawyer needed
Patents – territorial right, needs registration, time limited, novel and inventive step essential, lawyer really needed!

34. Copyright
This covers a means of expression – works of art, literature, software code, drawings,.
It does not cover inventions, only the means of expressing those inventions – if someone copies the effect of an invention by different expression it is not a breach of intellectual property rights.

35. Patents
Unlike other rights this protects effect not image or expression.
A well crafted patent can give monopoly rights to a business in its area.
A patent is expensive but there are cheaper preparatory steps and it’s cheaper to get a patent than to fight one!