Why Be Ethical

Why Be Ethical - http:/speeches.byu.edu/?act=viewitem&id=683

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It is not so much what we know that is  important, as what we do and what we are. -- Spencer W. Kimball
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Why Be Ethical? Bus M 390 Marriott School of Management Brigham Young University
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Why Be Ethical? Macro Arguments “Good ethics is good business” Micro Arguments
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Levels of Constraints on Behavior Ethical Behavior Tied to Set of Values Professional Standards Legal Requirements
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As Ethical Behavior Diminishes,  Legal Constraints Must Increase Legal Constraints Ethical Behavior
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Legal Constraints As Ethical Behavior Diminishes,  Legal Constraints Must Increase Ethical Behavior
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Bad Ethics Increases Transaction Costs Party A Party B Trade Security Lawyers Regulators Delays Interest Duplication Warranties Etc, etc!
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Business Costs of Unethical Behavior 1. Loss of physical assets 2. Increased costs of security 3. Loss of customers—especially those who value ethics 4. Loss of employees—especially the more ethical 5. Loss of reputation 6. Increased legal costs 7. Higher costs of debt 8. Loss of investor confidence (lower stock price, difficulty in raising funds, problems with lenders) 9. Regulatory intrusion 10. Costs of bankruptcy
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Why Ethical Behavior Adds Value Better information Trust from investors Lower costs for audits, controls, investigations Better allocation of resources Customers will be more loyal Lower costs from suppliers Attracting and retaining better employees Fair competition Lowers cost of business in economy Leads to better decision-making (do what’s best for firm, not one individual) Improves competitive nature of a country’s economy
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Just compensation Creates a more vibrant, entrepreneurial economy Attracts and retains better employees Rights of others Draws upon talents of wider set of individuals
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This note was uploaded on 03/20/2011 for the course BUSMGT 390 taught by Professor Ellertson during the Winter '11 term at BYU.

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Why Be Ethical - http:/speeches.byu.edu/?act=viewitem&id=683

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