1. Module 5 - Ethics and Corporate Responsibility Chapter 3

2. Learning Objectives LO1 LO1 Describe how different ethical perspectives guide decision making LO2 LO2 Explain how companies influence their ethics environment LO3 LO3 Outline a process for making ethical decisions LO4 LO4 Summarize the important issues surrounding corporate social responsibility LO5 LO5 Discuss reasons for businesses’ growing interest in the natural environment LO6 LO6 Identify actions managers can take to manage with the environment in mind 3-2

3. What is “ethics?”

4. Ethics – The system of rules that governs the ordering of values 3-4

5. CEO Quotes "Ethics has to do with what my feelings tell me is right or wrong.” "Ethics has to do with my religious beliefs.” "Being ethical is doing what the law requires.” "Ethics consists of the standards of behavior our society accepts.” "I don't know what the word means."

6. CEO Quotes "Ethics has to do with what my feelings tell me is right or wrong.”

8. CEO Quotes "Ethics has to do with what my feelings tell me is right or wrong.” "Ethics has to do with my religious beliefs.”

10. CEO Quotes "Ethics has to do with what my feelings tell me is right or wrong.“ "Ethics has to do with my religious beliefs.“ "Being ethical is doing what the law requires.“

12. CEO Quotes "Ethics has to do with what my feelings tell me is right or wrong.” "Ethics has to do with my religious beliefs.” "Being ethical is doing what the law requires.” "Ethics consists of the standards of behavior our society accepts.”

14. CEO Quotes "Ethics has to do with what my feelings tell me is right or wrong.” "Ethics has to do with my religious beliefs.” "Being ethical is doing what the law requires.” "Ethics consists of the standards of behavior our society accepts.” “Ethical behavior is following the code of your industry/profession.”

15. Perhaps Shakespeare was correct…. divorcedeli.com Merry Christmas and Happy New Year

18. Still further down…..

21. $50 Billion Ponzi Scheme

22. It’s a Personal Issue “I am ethical! You, on the other hand…..” Have you ever…………. – taken pens, staples, printer paper from work and used it at home? – listened to a coworker tell a joke that insults [fill in the blank!] and said nothing? – not told the complete truth about a mistake made at work? – shopped online while at work? – checked your Facebook page? – Checked the ball scores from last night? 3-22

23. …and if you have, then you are……

24. Cost of time 100 employees @$15 an hour Wastes 30 minutes a day - $7.50 250 work days X 100 X $7.50 = $187,500 annually!!

25. Bottom line Ethical issue – Situation, problem, or opportunity in which an individual must choose among several actions that must be evaluated as morally right or wrong Business ethics – The moral principles and standards that guide behavior in the world of business. Refer you to the great quote by Thoreau in your text: 3-25

26. It is truly enough said that a corporation has no conscience; but a corporation of conscientious men is a corporation with a conscience

27. How do you react? Moral philosophy – Principles, rules, and values people use in deciding what is right or wrong 3-27

28. Ethical Systems Universalism – The ethical system stating that all people should uphold certain values that society needs to function – Caux Principles for Business Human dignity Kyosei 3-28

30. Ethical Systems Egoism – Ayn Rand Utilitarianism 3-30

31. MARTIN NIEMÖLLER: "FIRST THEY CAME FOR THE SOCIALISTS..." First they came for the Socialists, and I did not speak out -- Because I was not a Socialist. Then they came for the Trade Unionists, and I did not speak out -- Because I was not a Trade Unionist. Then they came for the Jews, and I did not speak out -- Because I was not a Jew. Then they came for me -- and there was no one left to speak for me.

32. Ethical Systems Egoism – Ayn Rand Utilitarianism Relativism – It all depends Virtue ethics 3-32

33. Kohlberg’s Model of Cognitive Moral Development 3-33

34. Fun Exercise Heinz’s wife is dying. The druggist in town has discovered the cure. It cost him $200 to make but offers it to Heinz for $2,000. Heinz asks everyone he knows for money but can only come up with $1,000. He promises to pay the rest later. The druggist says no: he wants to make money from his discovery. That night Heinz breaks into the shop and takes the medicine. Was Heinz right? Why or why not? where are you????

35. Business Ethics Ethical climate 3-35

36. Ethics Programs Codes of ethics – J&J in text Compliance-based ethics programs Integrity-based ethics programs Ethical leaders 3-36

37. 1.Don’t allow personal gains to outweigh the good of the organization 2.Recognize all perspectives when making an ethical decision 3.Respect people and their rights 4.Keep promises and honor contracts 5.Use feelings to help decide morale dilemmas 6.Get all the facts 7.Treat all people fairly 8.Know who you are and what your personal values 9.Know what your company is and its cultural values 10.Always challenge your decision to be in line with your values, beliefs and morals 11.Never compromise your integrity 12.Make sure unjust decisions can be appealed 13.Don’t choose the easiest answer (don’t just go for a quick fix) 14.Consider the risk of setting & trying to achieve overly ambitious goals 15.Communicate that all employees have a responsibility to keep the company’s moral & ethical standards in check 16.When in doubt, don’t 17.When possible seek the input of effected individuals at a moral crossroads

39. The Business Costs of Ethical Failure 3-39

40. Corporate Social Responsibility Obligation toward society assumed by business. 3-40

41. Do businesses really have a social responsibility? First view – holds that managers act as agents for shareholders and, as such, are obligated to maximize the present value of the firm – “The Social Responsibility of Business is to Increase its Profits” 3-41

42. Do businesses really have a social responsibility? Second view – managers should be motivated by principled moral reasoning 3-42

43. You can do good and do well Profit maximization and CSR = oil and water????? Key is the “reputation” 3-43