ch03 - Chapter 3 BUSINESS ETHICS SOCIAL FORCES& THE LAW...

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Unformatted text preview: Chapter 3 BUSINESS ETHICS, SOCIAL FORCES & THE LAW What is Business Ethics? Business ethics is the application of values and standards to business conduct and decisions. When a business upholds basic ethical standards, it will enjoy the competitive advantage of a good reputation and, over the long term, better earnings. When a business violates ethical standards, social forces are set into motion, sometimes leading to changes in the law. 2 What is Business Ethics? Law as the Standard for Business Ethics. Positive Law: if an act is legal it is `moral.' Universal Standards for Business Ethics. Natural Law: higher standards for ethics. A law can be legal but unethical. Situational Business Ethics/Moral Relativism. Business Stakeholder Standard of Behavior. 3 Why is Business Ethics Important? Importance of Trust. Relationship to Financial Performance. Ford and Firestone. Johns-Manville. Good Reputation. 4 Cycle of Social Interaction Social Forces Social Environment Ethics Law 5 Public Policy, Law, & Ethics Protection: of the state, the person, public health, safety and morals. of property and personal rights. from exploitation, fraud, and oppression. of creditors and rehabilitation of debtors. Enforcement of individual intent. Furtherance of trade. Stability and flexibility. 6 Categories of Ethical Behavior Integrity and Truthfulness. Promise-Keeping. Loyalty: Avoiding Conflicts of Interest. Fairness. Doing No Harm. Maintaining Confidentiality. 7 How to Analyze Ethical Dilemmas Define the problem. Identify who could be injured. Define the problem from opposing viewpoint. Would you be willing to tell your family about your decision? Would you be willing to tell the community? Reach a decision. 8 Resolving Ethical Dilemmas Blanchard and Peale Test. Is it legal? Is it balanced? How does it make me feel? Would I want my decision published? Front-Page-of-the-Newspaper Test. Laura Nash Test. Requires examination from all perspectives. Is my conduct compliant with the law? What contribution does this action make to others? What are the consequences? 9 Wall Street Journal Model (3 C's model). ...
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