Ethics:
Business Textbook Chapter 3; Lab Manual p151-174 o o Expectations of Business by Society as a Whole Expectations of Business by Various Stakeholder Groups Stakeholders (review of material from first lecture) Definition
The Business/Stakeholder Relationship Mutual Dependency Stakeholders Provide the Capacity to Operate Stakeholders Have Legitimate Expectations
Ethics: Formal Definition Personal Ethics, Business Ethics, Moral Dilemmas
Resolving Ethical Dilemmas: Different Criteria Ethics as Law Ethics as Religion Ethics as Common Behaviour Utilitarianism Theory of Rights Theory of Justice
How Can Corporations Promote Ethical Behaviour
Societys Expectations of Business Largely uncontrollable and difficult to quantify (part of the Social Environment) Expectations vary from one stakeholder group to another Often the expectations of one group are in direct conflict with of another But these expectations do exist It is perilous for business to ignore these expectations
What are these Expectations? o Expectations of a Society as a Whole: o Business should behave in an ethical fashion Business should behave in a socially responsible fashion
Expectations of Various Stakeholder Groups Each group provides business with something and as such, expects something from business in return...review lecture 1 in BU111!
Ethics In the past several years, the topic of business ethics has become one of the hottest and highest profile topics in business Why? o o Hard to open a copy of a daily newspaper or watch the news on television without being confronted with the latest ethical scandal in business or government Examples Martha Steward jailed for insider training Quebec Sponsorship scandal bringing down the then Liberal government Conrad Black being jailed for misappropriating funds in Hollinger Corp Collapse of Worldcom #2 phone company in US and subsequent jail term of 25 years for company president Bernie Ebbers Collapse of Enron and subsequent jail terms of 24 years for company president Ken Lay and CFO Jeff Skilling Collapse of Arthur Anderson 5th largest public accounting firm in US due to audit improprieties
such
As the ethical responsibilities of a corporations board of directors and entire management team have been placed under a microscope and subjected to intense scrutiny as never before by: o Government regulators, investors, fund managers, prosecutors/the courts, the media
As such, corporations must undertake actions to both promote and insure ethical behaviour
Ethics the moral principles or beliefs that guide individuals and organizations in their dealings with others and provide a basis for determining whether behaviour is right or wrong Two branches personal ethics and business ethics (managerial ethics) Personal Ethics The moral guidelines that govern ones personal behaviour Business Ethics The moral guidelines that govern managerial behaviour Moral or Ethical Dilemmas When ones personal ethics/morality comes into conflict with the demands of a particular situation o Quite common in business
Ethical Behaviour Behaviour that conforms to individual beliefs and social norms about what is right and good Unethical Behaviour Behaviour that individual beliefs and social norms define as wrong and bad Therefore ethical behaviour is shaped by two things; AN individuals personal values and the social context or culture in which they occur Different societies and cultures have differing views of what is ethical Different individuals have differing views of what constitutes ethical behaviour As a result, ethics and ethical behaviour can mean different things to different people and societies Explains why it is so important for organizations to develop codes of conduct that outline to organization members what is acceptable behaviour How do we determine what is Ethical Behaviour? o Text suggests a simple three step process Gather relevant factual information Determine appropriate moral values Make an ethical judgment based on rightness or wrongness of the proposed activity or policy Sounds easy but how do we determine appropriate moral values Different ways of determining appropriate moral values
Ethics as the Law Ethics as Religion Ethics as Common Behaviour Utilitarianism Theory of Rights Theory of Justice