CHAPTER_5 - CHAPTER 5 Business Ethics and Ethical Decision...

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CHAPTER 5 Business Ethics and Ethical Decision Making The definition of social responsibility that appears in Chapter 1 incorporates society’s expectations and includes four levels of concern: economic, legal, ethical, and philanthropic. Because ethics is becoming an increasingly important issue in business today, this chapter and Chapter 5 are devoted to exploring this dimension of social responsibility. First, we define business ethics, examine its importance from an organizational perspective, and review its foundations. Next, we define ethical issues in business to help understand areas of risk. We then look at the individual, organizational, and opportunity factors that influence ethical decision making in the workplace. LECTURE OUTLINE I. The Nature of Business Ethics A. Ethics relates to choices and judgments about acceptable standards of conduct that guide the behavior of individuals and groups B. Business ethics comprises the principles and standards that guide the behavior of individuals and groups in the world of business. 1. Ethics relates to choices and judgments about acceptable standards of conduct that guide the behavior of individuals and groups. 2. Maintaining a balance between a company’s desire for profits and society’s wishes and needs often demands compromises or trade-offs. C.It is vital to recognize that business ethics goes beyond legal issues. D.Some businesspeople choose to behave ethically because of enlightened self-interest, or the expectation that “ethics pays.” II. Foundations of Business Ethics A.Because it is difficult to draw a boundary between legal and ethical issues, all questionable issues need an organizational mechanism for resolution. 1. The legal ramifications of some issues and situations may be obvious, but more often, questionable decisions and actions result in disputes that must be resolved through some type of negotiation or even litigation. 2. To avoid the costs of litigation, companies should develop systems to monitor complaints, suggestions, and other feedback from stakeholders. 3. The identification of ethical issues and implementation of standards of conduct that incorporate both legal and ethical concerns comprise the best approach to preventing crime and avoiding civil litigation. 4. Although some ethical standards are assumed to be self-evident, both employees and managers need experience within a specific industry to understand how to operate in gray areas or to handle close calls in evolving areas, such as Internet privacy. B.Many people who have limited business experience suddenly find themselves making important
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This note was uploaded on 04/17/2008 for the course BUS 260 taught by Professor Schultz during the Spring '08 term at Carroll WI.

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CHAPTER_5 - CHAPTER 5 Business Ethics and Ethical Decision...

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