0 <a href="/keyword/business-ethics/" >business ethics</a> Fundamentals Chapter 7 1 Prepared by Deborah Baker Texas Christian University Business and Society: Ethics and Stakeholder Management, 7e Carroll &amp; Buchholtz Copyright 2009 by South-Western, a division of Cengage Learning. All rights reserved 0 Chapter 7 Learning Outcomes 1. Describe how the public regards <a href="/keyword/business-ethics/" >business ethics</a> . 2. Define <a href="/keyword/business-ethics/" >business ethics</a> and appreciate the complexities of 3. 4. 5. 6. 7. 8. making ethical judgments. Explain the conventional approach to <a href="/keyword/business-ethics/" >business ethics</a> . Analyze economic, legal, and ethical aspects by using a Venn Model. Enumerate and discuss the four important ethics questions. Identify and explain three models of management ethics. Describe Kohlberg's three levels of developing moral judgment. Identify and discuss the elements of moral judgment. 2 0 Chapter 7 Outline The Public's Opinion of <a href="/keyword/business-ethics/" >business ethics</a> <a href="/keyword/business-ethics/" >business ethics</a> : What Does It Really Mean? Ethics, Economics and Law: A Venn Model Four Important Ethics Questions Three Models of Management Ethics Making Moral Management Actionable Developing Moral Judgment Elements of Moral Judgment Summary Key Terms Discussion Questions 3 0 Introduction to Chapter 7 <a href="/keyword/business-ethics/" >business ethics</a> Public's interest in <a href="/keyword/business-ethics/" >business ethics</a> has heightened during the last three decades Public's interest in <a href="/keyword/business-ethics/" >business ethics</a> has been spurred by headline-grabbing scandals The scandals of the early 2000s, beginning with Enron, created and defined the &quot;ethics industry&quot; 4 0 Introduction to Chapter 7 Recent Ethics Scandals Enron WorldCom Arthur Anderson Tyco Adelphia Global Crossing Dynegy HealthSouth Boeing Martha Stewart Parmalat (Italy) Computer Associates Figure 7-1 5 0 Inventory of Ethical Issues in Business Employee-Employer Relations Employer-Employee Relations Company-Customer Relations Company-Shareholder Relations Company-Community / Public Interest Figure 7-2 6 0 The Public's Opinion of <a href="/keyword/business-ethics/" >business ethics</a> Public Agenda Survey Findings The most egregious violators of <a href="/keyword/business-ethics/" >business ethics</a> were corrupt executives who protected their own wealth Greed for money and power and a weakening sense of personal values have been behind the recent ethics scandals People define <a href="/keyword/business-ethics/" >business ethics</a> in broad terms and are concerned with how it has affected them Many participants thought it was possible for executives to be both ethical and successful The media and financial press are not regarded as vigilant watchdogs protecting the public interest 7 0 The Public's Opinion of <a href="/keyword/business-ethics/" >business ethics</a> LRN Ethics Study Survey Findings Three out of four employees reported encountering ethical lapses on the job More than one in three respondents said these incidents happen at least once a week Ten percent believed that a current issue in their company could create a business scandal if discovered Younger workers reported higher levels of witnessing ethical lapses and being distracted by them 8 0 Media Reporting on <a href="/keyword/business-ethics/" >business ethics</a> The media are reporting ethical problems more frequently and fervently In-depth investigative reporting of <a href="/keyword/business-ethics/" >business ethics</a> on TV shows as 60 Minutes, 20/20, Dateline NBC, Primetime Live, and FRONTLINE Internet coverage in the form of webpages and blogs has expanded in recent years 9 <a href="/keyword/business-ethics/" >business ethics</a> Today versus Earlier Periods Society's Expectations of <a href="/keyword/business-ethics/" >business ethics</a> 0 Expected and Actual Levels of <a href="/keyword/business-ethics/" >business ethics</a> Ethical Problem Actual <a href="/keyword/business-ethics/" >business ethics</a> Ethical Problem 1960s Figure 7-3 Time Early 2000s 10 <a href="/keyword/business-ethics/" >business ethics</a> : What Does It Really Mean? Ethics The discipline that examines good or bad practices within the context of moral duty and obligation 0 Moral conduct Relates to principles of right and wrong in behavior <a href="/keyword/business-ethics/" >business ethics</a> Concerned with good and bad or right and wrong behavior and practices that take place in business 11 <a href="/keyword/business-ethics/" >business ethics</a> : What Does It Really Mean? Descriptive Ethics Involves describing, characterizing and studying morality Focuses on &quot;What is&quot; Concerned with supplying and justifying moral systems Focuses on &quot;What ought / ought not to be&quot; 0 Normative Ethics 12 0 Three Approaches to <a href="/keyword/business-ethics/" >business ethics</a> Conventional Approach Based on how normal society today views <a href="/keyword/business-ethics/" >business ethics</a> Principles Approach Based upon the use of ethics principles to direct behavior, actions and policies Based on short, practical questions to guide ethical decision making and behavior 13 Ethical Tests Approach 0 Conventional Approach The conventional approach to <a href="/keyword/business-ethics/" >business ethics</a> involves a comparison of a decision or practice to prevailing societal norms Decision or Practice Prevailing Norms of Acceptability 14 0 Sources of Ethical Norms Fellow Workers Family Local Community Regions of Country Profession The Individual Conscience Friends Employer Society at Large The Law Religious Beliefs Figure 7-4 15 0 Ethics and the Law 1. Why do firms behave illegally? 2. What are the consequences of behaving illegally? 16 0 Making Ethical Judgments Behavior or act that has been committed compared with Prevailing norms of acceptability Value judgments and perceptions of the observer Figure 7-5 17 The Conventional Approach to <a href="/keyword/business-ethics/" >business ethics</a> 1. What is the true nature of the practice, behavior, or decision that occurred? 0 2. What are society's (or business's) prevailing norms of acceptability? 3. What value judgments are being made by someone about the practice or behavior, and what are that person's perceptions of applicable norms? 18 0 Ethics, Economics, and Law Figure 7-6 19 0 Four Important Ethical Questions 1. What is? 2. What ought to be? 3. How to we get from what is to what ought to be? 4. What is our motivation in all this? 20 0 Five Levels for Questions 1. Level of the individual 2. Level of the organization 3. Level of the industry or profession 4. Societal level 5. Global or international level 21 0 What Is? What are your personal ethics? What are your organization's ethics? What are the ethics of your industry? What are society's ethics? What are global ethics? 22 0 What Ought to Be? How ought we treat our aging employees? How safe ought we make this product? How clean an environment should we aim for? How should we treat long-time employees when the company is downsizing? Should we outsource aspects of production to China or India? 23 0 The Practical Question What are we able to accomplish? What circumstances permit us to accomplish? What do we intend to accomplish? 24 0 Three Models of Management Ethics Immoral management Moral management Amoral management 25 0 Three Models of Management Ethics Immoral Management An approach devoid of ethical principles and active opposition to what is ethical Moral Management Conforms to high standards of ethical behavior or professional standards of conduct Intentional: does not consider ethical factors Unintentional: casual or careless about ethical factors 26 Amoral Management 0 Characteristics of Immoral Managers Intentionally do wrong Self-centered and self-absorbed Care only about self or organization's profits / success Actively oppose what is right, fair, or just Exhibit no concern for stakeholders Are the &quot;bad guys&quot; An ethics course probably would not help them Figure 7-7 27 0 Illustrative Cases of Immoral Management Stealing petty cash Cheating on expense reports Taking credit for another's accomplishments Lying on time sheets Coming into work hungover Telling a demeaning joke Taking office supplies for personal use Showing preferential treatment toward certain employees Rewarding employees who display wrong behaviors Harassing a fellow employee 28 0 Characteristics of Moral Managers Conform to high level of ethical or right behavior Conform to high level of personal and professional standards Ethical leadership is commonplace Goal is to succeed within confines of sound ethical precepts High integrity is displayed Embrace letter and spirit of the law Possess an acute moral sense and moral maturity Are the &quot;good guys&quot; Figure 7-8 29 0 Integrity Strategy Guiding values and commitments make sense and are clearly communicated. Company leaders are personally committed, credible, and willing to take action on values Espoused values are integrated into normal channels of management decision making The organization's systems support and reinforce its values All managers have the skills, knowledge, and competencies to make ethically sound decisions daily 30 0 Ethics Criteria Be a leader in the company's field, showing the way ethically Sponsor programs that demonstrate sincerity and ongoing vibrancy, and reach deep into the company Be a significant presence on the national scene, so the company's ethical behavior sends a loud signal Stand out in at least one area Demonstrate the ability to face a recent challenge and overcome it with integrity 31 0 Habits of Moral Leaders 1. 2. 3. 4. 5. 6. 7. They have a passion to do right They are morally proactive They consider all stakeholders They have a strong ethical character They have an obsession with fairness They undertake principled decision making They integrate ethics wisdom with management wisdom 32 0 Positive Ethical Behaviors Giving proper credit where it is due Being straightforward and honest with other employees Treating all employees equally Being a responsible steward of company assets Resisting pressure to act unethically Recognizing and rewarding ethical behavior of others Talking about the importance of ethics and compliance on a regular basis 33 0 Characteristics of Amoral Managers Intentionally Amoral Managers: Don't think ethics and business should &quot;mi...