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Published bySabrina Chapman Modified over 9 years ago
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Ethics in Business Case studies, Theory, and Application
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Definition Ethics in business are the values and standards that guide the behavior of executives, managers and employees. Ethics impact all areas of business. – Internal and external financial procedures – Treatment of employees and contractors – Possible conflicts of interest – Pricing policies – Global expansion and operations
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Influences on Personal Ethics Legislation Personal value system Peer influence Corporate culture Company policies
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Two Views of Ethics Shareholder view – Friedman, 1970s – Executive’s obligation is to serve the interest of the shareholders Stakeholder view – There are a range of people affected by a firm – Shareholders, employees, governments, suppliers, customers, local communities, etc.
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Stakeholder view: Internal Environment Corporate culture – beliefs, customs, values of the firm – Guides the behavior of the organization Codes of ethics – Support of upper management – Explanation of what are ethics – Principles of the code and core values – Specific behaviors to promote – List of stakeholders of the firm & obligations to them
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Stakeholder view: Internal Environment Management structure – Job descriptions should reflect a commitment to ethics – A formal corporate governance committee – Training and education for managers and employees Promote culture Identify ethical issues Develop skills to deal with the issues
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Theories of Ethical Decision Making Utilitarianism – Cost-benefit analysis – Maximize the benefit for all stakeholders Pluralism – Universal acceptability – Publicity test Contractarianism – Rights of affected parties
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Discussion Read each case study and identify the ethical issue(s) How should the employee/firm proceed? Explain how you came to that decision – Use theory to support your answer
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Discussion What are other ethical issues that you’ve noticed in the marketplace? What is the difference between a legal issue and an ethical issue? Universities typically have a “school culture” similar to that of a corporate culture. What is the culture of Winthrop? With respect to ethics, what are our strengths? Where is there room for improvement?
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