1. BUSINESS & SOCIETY Ethics and Stakeholder Management
Chapter 6
BUSINESS & SOCIETY Ethics and Stakeholder Management
Carroll & Buchholtz 6e
BUSINESS’S ETHICS FUNDAMENTALS
Prepared by Deborah Baker Texas Christian University
Chapter 6-
Business and Society: Ethics and Stakeholder Management, 6e • Carroll & Buchholtz Copyright ©2006 by South-Western, a division of Thomson Learning.  All rights reserved

2. 2000 National Business Ethics Survey Findings
1 in 8 employees feel pressure to act unethically
2/3 attribute this pressure to internal sources
1 in 3 employees observes misconduct at work
Misconduct observed most: lying, withholding information, abusive behavior toward employees, misreporting time worked, & discrimination
1 in 3 employees fears retaliation for reporting unethical behavior
Employees say that their organizations’ concern for ethics is a reason they continue to work there.
Chapter 6-

3. Ethics Moral conduct Business Ethics
Set of moral principles or values used
to determine right vs. wrong behavior
Moral conduct
Right vs. wrong behavior
Business Ethics
Right vs wrong in a business context
Chapter 6-

4. Conventional Approach to Business Ethics (Ch 6)
-Involves a comparison of a decision or practice to prevailing societal norms
Decision or Practice
Prevailing Norms of Society
(acceptability)
Chapter 6-

5. Sources of Ethical Norms in Society
Fellow Workers
Family
Friends
The Law
Regions of Country
Profession
Employer
Society at Large
Local Community
Religious Beliefs
The Individual
Conscience
Chapter 6-

6. Problems? How do we know if a source is reliable?
How do we handle conflicting messages?
What happens if we go to another “society”?
“When in Rome, do as the Romans do.”
Chapter 6-

7. Ethics & the Law Overlap Law reflects society’s values
Ethics often represents a standard that exceeds the legal minimum
If you break the law, are you behaving unethically?
If you behave unethically, are you breaking the law?
Ethics
Law
Overlap
Chapter 6-

8. How We Make Ethical Judgments ? (to decide what is right or wrong)
Observation of
behavior or act that has been committed
Prevailing norms of acceptability
We must take into account the values & perceptions of the observer
compare with
Chapter 6-

9. Ethical Relativism
When we pick & choose norms to follow based on what we are doing at the time & we justify our actions (maximizes our freedom of choice)
We agree on general principles but disagree on actual practices (depending on what situation we’re in)
It’s wrong- we need to be aware of it
One problem with the conventional approach
Chapter 6-

10. Ethics, Economics, and Law (page 180)
Chapter 6-

11. Management’s Ethics Immoral Management Moral Management
Active opposition to what is
ethical
Moral Management
High standards of ethical behavior
Amoral Management
Intentional: does not consider ethics
Unintentional: careless
Chapter 6-

12. Immoral Managers Strategy: exploitation (profit @ any cost)
Intentionally do wrong (know right from wrong)
Self-centered & self-absorbed; greedy
Care only about self or profits
Actively oppose what is right, fair, or just
No concern for SH
Laws are obstacles to overcome
An ethics course probably would not help them!
Strategy: exploitation any cost)
Chapter 6-

13. Moral Managers Strategy: integrity
Conform to high level of ethical behavior
Conform to high level of personal & professional standards
Ethical leadership
Goal is to succeed, but only within Area 1 of Venn Diagram
Operate above legal mandates (law is minimum)
Possess an acute “moral sense” & moral maturity
Strategy: integrity
Chapter 6-

14. Amoral Managers Intentionally Amoral Managers:
Don’t think ethics & business should “mix”
Different rules apply in the business world
Unintentionally Amoral Managers:
Don’t think about ethics when making decisions, too self-absorbed
Lack ethical perception or awareness (afterthought)
Well-intentioned, but morally careless, insensitive or unconscious
Strategy: compliance
Chapter 6-

15. Ethics in Practice p. 189 Ethical? Legal? Profitable?
What would you do?
Chapter 6-

16. Making Moral Management Real
It’s senior management’s responsibility to create an ethical organizational climate!
How do they do this?
Recognize that amoral management exists.
Chapter 6-

17. Cognitive Moral Judgment
Chapter 6-

18. Why Managers Behave Ethically
Most of Us
Many of Us
Very Few Of Us
1. To avoid some punishment
2. To receive some reward
3. To be responsive to family, friends, or superiors
4. To be a good citizen
5. To do what is right, pursue some ideal
Chapter 6-

19. External Sources of a Manager’s Values How can we be so ethically diverse?
Philosophical values
Cultural values
Legal values
Religious values
Professional values
Society’s
Values
Chapter 6-

20. Internal Sources of a Manager’s Values
Socialization teaches norms which influence behavior
Respect for authority
Loyalty to bosses & organization
Conformity
Performance counts
Bottom line results count (above all else)
-In our society, these norms represent survival & success!!
-Is this a setup for unethical behavior?
Chapter 6-