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Unformatted text preview: Business Ethics SENIOR CONTRIBUTING AUTHORS STEPHEN M. BYARS, USC MARSHALL SCHOOL OF BUSINESS KURT STANBERRY, UNIVERSITY OF HOUSTON-DOWNTOWN OpenStax Rice University 6100 Main Street MS-375 Houston, Texas 77005 To learn more about OpenStax, visit . Individual print copies and bulk orders can be purchased through our website. ©2018 Rice University. Textbook content produced by OpenStax is licensed under a Creative Commons Attribution 4.0 International License (CC BY 4.0). 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For questions regarding this licensing, please contact [email protected] Trademarks The OpenStax name, OpenStax logo, OpenStax book covers, OpenStax CNX name, OpenStax CNX logo, OpenStax Tutor name, Openstax Tutor logo, Connexions name, Connexions logo, Rice University name, and Rice University logo are not subject to the license and may not be reproduced without the prior and express written consent of Rice University. PRINT BOOK ISBN-10 PRINT BOOK ISBN-13 PDF VERSION ISBN-10 PDF VERSION ISBN-13 Revision Number Original Publication Year 1-947172-56-5 978-1-947172-56-2 1-947172-57-3 978-1-947172-57-9 BE-2018-000(09/18)-LC 2018 OPENSTAX OpenStax provides free, peer-reviewed, openly licensed textbooks for introductory college and Advanced Placement® courses and low-cost, personalized courseware that helps students learn. 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Access. The future of education. OpenStax.org I like free textbooks and I cannot lie. TABLE OF CONTENTS Preface 1 1 Why Ethics Matter 7 1.1 Being a Professional of Integrity 8 1.2 Ethics and Profitability 13 1.3 Multiple versus Single Ethical Standards 2 Ethics from Antiquity to the Present 2.1 2.2 2.3 2.4 2.5 2.6 3 27 The Concept of Ethical Business in Ancient Athens 28 Ethical Advice for Nobles and Civil Servants in Ancient China 35 Comparing the Virtue Ethics of East and West 40 Utilitarianism: The Greatest Good for the Greatest Number 44 Deontology: Ethics as Duty 50 A Theory of Justice 54 Defining and Prioritizing Stakeholders 3.1 3.2 3.3 3.4 4 20 67 Adopting a Stakeholder Orientation 68 Weighing Stakeholder Claims 72 Ethical Decision-Making and Prioritizing Stakeholders Corporate Social Responsibility (CSR) 83 78 Three Special Stakeholders: Society, the Environment, and Government 4.1 Corporate Law and Corporate Responsibility 94 4.2 Sustainability: Business and the Environment 103 4.3 Government and the Private Sector 117 5 The Impact of Culture and Time on Business Ethics 5.1 5.2 5.3 5.4 6 The Relationship between Business Ethics and Culture 132 Business Ethics over Time 139 The Influence of Geography and Religion 144 Are the Values Central to Business Ethics Universal? 149 What Employers Owe Employees 159 6.1 The Workplace Environment and Working Conditions 160 131 93 6.2 What Constitutes a Fair Wage? 6.3 An Organized Workforce 177 6.4 Privacy in the Workplace 184 7 What Employees Owe Employers 7.1 7.2 7.3 7.4 7.5 8 Loyalty to the Company 196 Loyalty to the Brand and to Customers 203 Contributing to a Positive Work Atmosphere 207 Financial Integrity 212 Criticism of the Company and Whistleblowing 218 Changing Work Environments and Future Trends 295 More Telecommuting or Less? 296 Workplace Campuses 301 Alternatives to Traditional Patterns of Work 306 Robotics, Artificial Intelligence, and the Workplace of the Future Epilogue: Why Ethics Still Matter 11.1 11.2 11.3 11.4 A 265 Entrepreneurship and Start-Up Culture 266 The Influence of Advertising 271 The Insurance Industry 276 Ethical Issues in the Provision of Health Care 280 10.1 10.2 10.3 10.4 11 231 Diversity and Inclusion in the Workforce 232 Accommodating Different Abilities and Faiths 239 Sexual Identification and Orientation 244 Income Inequalities 247 Animal Rights and the Implications for Business 252 Professions under the Microscope 9.1 9.2 9.3 9.4 10 195 Recognizing and Respecting the Rights of All 8.1 8.2 8.3 8.4 8.5 9 169 325 Business Ethics in an Evolving Environment 326 Committing to an Ethical View 329 Becoming an Ethical Professional 332 Making a Difference in the Business World 336 The Lives of Ethical Philosophers 341 This OpenStax book is available for free at 314 B Profiles in Business Ethics: Contemporary Thought Leaders C A Succinct Theory of Business Ethics Index 365 357 347 This OpenStax book is available for free at Preface 1 Preface Welcome to Business Ethics, an OpenStax resource. This textbook was written to increase student access to high-quality learning materials, maintaining highest standards of academic rigor at little to no cost. About OpenStax OpenStax is a nonprofit based at Rice University, and it’s our mission to improve student access to education. Our first openly licensed college textbook was published in 2012, and our library has since scaled to over 25 books for college and AP® courses used by hundreds of thousands of students. OpenStax Tutor, our low-cost personalized learning tool, is being used in college courses throughout the country. Through our partnerships with philanthropic foundations and our alliance with other educational resource organizations, OpenStax is breaking down the most common barriers to learning and empowering students and instructors to succeed. About OpenStax resources Customization Business Ethics is licensed under a Creative Commons Attribution 4.0 International (CC BY) license, which means that you can distribute, remix, and build upon the content, as long as you provide attribution to OpenStax and its content contributors. Because our books are openly licensed, you are free to use the entire book or pick and choose the sections that are most relevant to the needs of your course. Feel free to remix the content by assigning your students certain chapters and sections in your syllabus, in the order that you prefer. You can even provide a direct link in your syllabus to the sections in the web view of your book. Instructors also have the option of creating a customized version of their OpenStax book. The custom version can be made available to students in low-cost print or digital form through your campus bookstore. Visit the Instructor Resources section of your book page on OpenStax.org for information. Art attribution in Business Ethics In Business Ethics, most art contains attribution to its title, creator or rights holder, host platform, and license within the caption. Because the art is openly licensed, anyone may reuse the art as long as they provide the same attribution to its original source. To maximize readability and content flow, some art does not include attribution in the text. If you reuse art from Business Ethics that does not have attribution provided, use the following attribution: Copyright Rice University, OpenStax, under CC BY 4.0 license. Errata All OpenStax textbooks undergo a rigorous review process. However, like any professional-grade textbook, errors sometimes occur. Since our books are web based, we can make updates periodically when deemed pedagogically necessary. If you have a correction to suggest, submit it through the link on your book page on openstax.org. Subject matter experts review all errata suggestions. OpenStax is committed to remaining transparent about all updates, so you will also find a list of past errata changes on your book page on openstax.org. 2 Preface Format You can access this textbook for free in web view or PDF through OpenStax.org, and for a low cost in print. About Business Ethics Business Ethics is designed to meet the scope and sequence requirements of the single-semester standardized business ethics course across all majors. This title includes innovative features designed to enhance student learning, including case studies, application scenarios, and links to video interviews with executives, all of which help instill in students a sense of ethical awareness and responsibility. The book provides an important opportunity for students to learn the core concepts of business ethics and understand how to apply those concepts to their professional lives. Coverage and scope Our Business Ethics textbook adheres to the scope and sequence requirements of introductory business ethics courses nationwide. We have endeavored to make the core theories and practical concepts of business ethics engaging, relevant, and accessible to students. The guiding themes of the textbook are to promote high ethical standards and to assist the integration of ethical thinking across the business school curriculum, with an end result of encouraging even greater ethical consciousness on the part of business practitioners beyond their graduation. We particularly emphasize the reality of today’s global business community and observe that geography, culture, and time contribute to ethical concepts and constructs. With awareness of these issues in mind, the content of this textbook has been developed and arranged to emphasize the necessity—and difficulty—of ethical decision-making. The authors seek to help students recognize legal and moral issues, reason through the consequences of different courses of action, and promote social responsibility. The text emphasizes connections between topics such as ethical theories, legal responsibilities, the prioritization of stakeholders, and corporate social responsibility. The organization and pedagogical features were developed and vetted with feedback from business ethics instructors dedicated to the project. Engaging feature boxes Throughout Business Ethics, you will find features that engage students by taking selected topics a step further. Each feature box contains either a link to a deeper exploration of the topic at hand or critical thinking questions that may be geared toward class discussion, student projects, or written essays. Our features include: • Cases from the Real World. This feature presents brief examples of real companies making ethical decisions in the midst of hectic competition. Each example includes follow-up critical thinking questions that encourage reflection on the case and how it relates to chapter concepts and themes. • What Would You Do? This feature presents brief, fact-based scenarios in which students are challenged to put themselves into the shoes of ranking executives and balance a host of interests—some conflicting—as they make decisions for their businesses. Students provide an answer to a practical problem or ethical issue, as well as their reasoning. • Ethics across Time and Cultures. This feature considers how geography, culture, and time influence the ethical values we have. Follow-up critical thinking questions allow for broader reflection on the chapter topics and encourage deeper integration of the chapter content. • Link to Learning. This feature provides a very brief introduction to online resources and videos that are pertinent to students’ exploration of the topic at hand. Link to Learning boxes allow students to connect easily to some of the most important thought leaders and concepts in the field of business ethics. The This OpenStax book is available for free at Preface 3 purpose is to highlight the complexities of ethical decision-making. Module materials that reinforce key concepts • Learning Objectives. Every module begins with a set of clear and concise learning objectives. These objectives are designed to help the instructor decide what content to include or assign, and to guide students on what they can expect to learn. After completing the module and end-of-module exercises, students should be able to demonstrate mastery of the learning objectives. • Summaries. Section summaries distill the information in each module for both students and instructors down to key, concise points addressed in the section. • Key Terms. Key terms are bold and are followed by a definition in context. Definitions of key terms are also listed in the glossary, which appears at the end of the chapter. • Assessments. Multiple-choice and short-answer review questions provide opportunities to recall and test the information students learn throughout each module. Additional resources Student and instructor resources We’ve compiled additional resources for both students and instructors, including Getting Started Guides, a test bank, and comprehensive PowerPoint slides. Instructor resources require a verified instructor account, which you can apply for when you log in or create your account on OpenStax.org. Take advantage of these resources to supplement your OpenStax book. Community Hubs OpenStax partners with the Institute for the Study of Knowledge Management in Education (ISKME) to offer Community Hubs on OER Commons—a platform for instructors to share community-created resources that support OpenStax books, free of charge. Through our Community Hubs, instructors can upload their own materials or download resources to use in their courses, including additional ancillaries, teaching material, multimedia, and relevant course content. We encourage instructors to join the hubs for the subjects most relevant to their teaching and research, as an opportunity to both enrich their courses as well as to engage with other faculty. To reach the Community Hubs, visit . Technology partners As allies in making high-quality learning materials accessible, our technology partners offer optional low-cost tools that are integrated with OpenStax books. To access the technology options for your text, visit your book page on OpenStax.org. About the authors Senior contributing authors Stephen M. Byars, USC Marshall School of Business Stephen Byars received his BA from Claremont McKenna College, his MA from the University of San Diego, and his PhD from the University of Southern California. He teaches business ethics and oral and written communication at the Marshall School of Business at USC to both graduate and undergraduate business majors. He has served as associate director of the USC Writing Program, temporary director of the Writing 4 Preface Center within the Writing Program, and as director of the USC Marshall Consulting Program. His scholarly interests include business and professional ethics, the constructive mediation of disputes in the workplace, and those best practices that permit leaders to direct business in ways that engender community, social, and corporate good. Kurt Stanberry, University of Houston–Downtown Kurt Stanberry is a professor of legal studies in the College of Business at the University of Houston Downtown and has held the PLM Endowed Professorship since 2011. He is also a licensed attorney. He received his BA from Yale University, an MBA from the Graduate School of Business at Temple University, and a JD from the University of Houston College of Law. Kurt teaches courses at the undergraduate and graduate level in business law, contracts, employment law, negotiations, ethics, and other related topics. He also conducts continuing education seminars in topics such as negotiations, leadership, diversity, and ethics for CPAs, CFPs, attorneys, and business executives, through organizations such as the AICPA, FEI, and TSCPA at the state and national levels. He has published numerous articles in scholarly journals, two textbooks, various practice manuals, and cases. Prior to joining the faculty at UHD, Kurt was a professor in the California State University System and was also a visiting professor in international programs in London, Bonn, Tokyo, and Seoul. He has been teaching and practicing law for over 30 years. Contributing authors Barbara Boerner, Brevard College Robert Brancatelli, Fordham University Wade Chumney, California State University, Northridge Laura Dendinger, Wayne State College Bill Nantz, Houston Community College Mark Poepsel, Southern Illinois University Edwardsville David Shapiro, Pennsylvania State University Reviewers Justin Bateh, Florida State College at Jacksonville Ronald Berenbeim, New York University Kenneth Bigel, Touro College Cindy Briggs, Salt Lake Community College Barbara Chappell, Walden University Maureen Chisholm, Quincy College Valerie Collins, Sheridan College Dixon Cooper, Ouachita Baptist University Anastasia Cortes, Virginia Polytechnic Institute Sarah Esveldt, Carroll University Rand Fandrich, New England College of Business Charles Fenner, State University of New York Canton This OpenStax book is available for free at Preface Mehran Ferdowsian, Wilkes University Betty Fitte, Tidewater Community College Robert Freeborough, Berkeley College Martha Helland, University of Sioux Falls Amy Jordan, Loyola University Chicago Stephanie Jue, University of Texas Cheryl Keymer, North Arkansas College Nai Lamb, University of Tennessee at Chattanooga Jolene A. Lampton, Park University–Austin Campus Barbara Limbach, Chadron State College Marilyn Marousek, Barry University Russ Meade, Husson University Michael Pakaluk, Catholic University Tatyana Pashnyak, Bainbridge State College Roslyn Roberts, California State University, Sacramento Amber Ruszkowski, Ivy Tech Community College Richard Savior, State University of New York Empire State College Lon Schiffbauer, Salt Lake Community College Nathan Smith, Houston Community College Anne Snell, Tulane University Chris Suprenant, University of New Orleans Glen Taylor, Paradise Valley Community College Sonia Toson, Kennesaw State University Joel Webb, Loyola University New Orleans Andy Wible, Muskegon Community College Jeffrey Yoder, Fairfield University 5 Preface This OpenStax ...
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