AFM 131 Chapter 5 Notes - AFM 131 Chapter 5 ethics Ethics...

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AFM 131 Chapter 5- ethics Ethics is more than legality Ethical standards are fundamental Ethics is a standard of moral behavior, or behavior that is accepted by society as right vs wrong - People may have different views on what is right and wrong - But the set of ethical rules we have comes from lessons taught in history such as the bible and other workds of literature Ethics begins with each of us Society cannot become more ethical until it’s individuals do In business, the most ethical method may not be the most profitable, and may put you at an ethical dilemma Ways to overcome ethical dilemma: 1. Ask yourself if it is legal 2. Is it balanced? Would you want to be treated the same way 3. How will doing this make you feel? Will you be proud of your actions, could you tell your family? Managing businesses Ethically and responsibly When an employee fails to be ethical, it is most likely that it was a failure in the organization’s leadership to establish the ethical values and culture Businesses should be managed ethically because: - It maintains good reputation - Keep old customers, attract new ones - Avoid law suits - Reduce turnover - To please society - To do the right thing Sometimes when the incentive is too good, employees are willing to do anything to get it Setting the corporate ethical standards Compliance based ethics codes are codes that emphasize preventing unlawful behavior by increasing control and increasing the penalty for wrong doers Integrity base ethics codes defines the organization’s guiding values, creates an environment that supports ethically sound behavior and shared accountability among employees Steps to improve business ethics: 1. Top management must always support the communicate the corporate code of conduct 2. Employees must understand that the top managers expect everyone to act ethically 3. Managers must be trained to consider ethics in all decisions 4. Phone lines in the office should allow people to report unethical activity. Whistleblowers are people who report illegal or unethical behavior 5. Supplier, distributors and related entities must be informed of the ethics program too 6.
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