1. David P. Twomey - Boston College
Marianne M. Jennings - Arizona State University
© 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

2. Business Ethics, Social Forces, and the Law
Chapter 3
Business Ethics, Social Forces, and the Law

3. A. What is Business Ethics?
The Law as the Standard for Business Ethics
The Notion for Universal Standards for Business Ethics
The Standard of Situational Business Ethics or Moral Relativism
The Business Stakeholder Standard of Behavior

4. A. What is Business Ethics? [LO.1]
Business ethics is the application of values and standards to business conduct and decisions.
Balancing goal of profits with society’s values is called business ethics.

5. A. What is Business Ethics? [LO.1
When a business upholds basic ethical standards, it will enjoy the competitive advantage of a good reputation and, over the long term, better earnings.
When a business violates ethical standards, social forces are set into motion, sometimes leading to changes in the law.

6. A. What is Business Ethics? [LO.1
Law as the Standard for Business Ethics.
Positive Law: if an act is legal it is ‘moral.’

7. A. What is Business Ethics? [LO.1
2. Notion of Universal Standards for Business Ethics.
Natural Law: higher standards for ethics.
A law can be legal but unethical.

8. A. What is Business Ethics? [LO.1
The Standard of Situational Business Ethics or Moral Relativism.
Flexible standard of ethics that considers situations and motivation before concluding an action is right or wrong.

9. A. What is Business Ethics? [LO.1]
4. The Business Stakeholder Standard of Behavior.

10. B. Why is Business Ethics Important?
The Importance of Trust
Business Ethics and Financial Performance
The Importance of a Good Reputation
Business Ethics and Business Regulation: Public Policy, Law, and Ethics

11. B. Why is Business Ethics Important? [LO.2]
5. Importance of Trust.
6. Business Ethics and Financial Performance.
Long-term success is linked to values.
Poor values do have an effect on financial performance.
The Enron example.
7. Importance of a Good Reputation.

12. B. Why is Business Ethics Important? [LO.2]
Business Ethics and Business Regulation: Public Policy, Law and Ethics.
Complaints from customers and stakeholders may lead to change in laws – which change corporate behavior. Goals include:
(A) Protection of the State.
(B) Protection of the Person.
(C)Protection of Public Health, Safety, and Morals.

13. B. Why is Business Ethics Important? [LO.2]
Business Ethics and Business Regulation: Public Policy, Law and Ethics. Goals (cont’d):
(D) Protection of Property: Its Use and Title.
(E) Protection of Personal Rights.
(F) Enforcement of Individual Intent.
(G) Protection from Exploitation, Fraud, and Oppression.

14. B. Why is Business Ethics Important? [LO.2]
Business Ethics and Business Regulation: Public Policy, Law and Ethics. Goals (cont’d):
(H) Furtherance of Trade.
(I) Protection of Creditors and Rehabilitation of Debtors.
(J) Stability and Flexibility.

15. Cycle of Social Interaction
Chapter 3
Cycle of Social Interaction
Social Forces
Social
Environment
Ethics
Law 1

16. C. How to Recognize and Resolve Ethical Dilemmas
Categories of Ethical Behavior
Resolving Ethical Dilemmas

17. C. How to Recognize and Resolve Ethical Dilemmas [LO.3]
Chapter 3
Categories of Ethical Behavior.
Integrity and Truthfulness.
Promise-Keeping.
Loyalty: Avoiding Conflicts of Interest.
Fairness.
Doing No Harm.
Maintaining Confidentiality. 3

18. C. How to Recognize and Resolve Ethical Dilemmas [LO.3]
Chapter 3
C. How to Recognize and Resolve Ethical Dilemmas [LO.3]
Resolving Ethical Dilemmas.
(A) Blanchard and Peale Test.
Is it legal?
Is it balanced?
How does it make me feel?
(B) Front-Page-of-the-Newspaper Test.
Would I want my decision published? 4

19. C. How to Recognize and Resolve Ethical Dilemmas [LO.3]
Resolving Ethical Dilemmas.
(C) Laura Nash Test: Requires examination from all perspectives.
(D) Wall Street Journal Model (3 C’s model).
Is my conduct compliant with the law?
What contribution does this action make to others?
What are the consequences?