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Question

Find a news article from The New York Times that you believe reports on an ethical dilemma in

business.  

For your first discussion post write a essay that does the following:

1) Describe the ethical issue. What business or businesses are involved? What are the specific actions or behaviors you consider ethically important and why are they ethical issues?

2) Analyze what variables, in your opinion, contribute to the behaviors or actions occurring?

3) Suggest what kinds of actions would be appropriate to address this ethical issue? If the measures suggested in the textbook do not seem appropriate feel free to say why and then suggest alternative actions.

Textbook

In the last decade there has been a great deal of attention paid to the way business affects society as a whole and the importance of ethics in business. This interest is largely the result of a number of very high-profile cases of corporate fraud and deception. The revelation of very problematic actions and practices at companies and much head-scratching in the pages of business media.


The revelations have also prompted concern in business schools. In many quarters there is talk of the need for increased attention to "ethics" in organizational life, particularly in business (see the Boston Globe article reporting on such efforts at Harvard at "Harvard Raises Its Hand on Ethics" .


Ethics is a field of philosophy that deal with the basic question of what is right and good. It concerns the choices we make, especially the ways that we understand our own self-interest and our relationship to others. Ethics underlies and draws on morality (including religious beliefs) and laws that regulate social behavior.


Four key perspectives on ethics (frameworks for determining what is right and good and for balancing the interests of the individual with the interests of the group or society) that have been developed over the last couple of centuries are described in the chapter: utilitarian, rights, theory of justice, and integrative social contracts (p. 110-111). For a great overview of ethics see the entry in the Wikipedia (online encyclopedia)


Consideration of business ethics is part of a larger set of questions concerning the nature of business and how it fits into the society as a whole. The question of the "social responsiblity" of business can only be answered in the context of an understanding of the appropriate goals and methods of business. For many people, the goal of business is to make profit - all other goals are secondary. This is the view described in the textbook as the classical view (p.130) and is consistent with the principles of neoclassical economics: when the market operates with no constraints it is able to achieve (through the "invisible hand" described by Adam Smith in the 18th century) in a way that serves everyone (by promoting efficient production and distribution). In its more extreme form this is also the "greed is good" sentiment popularized in the movie "Wall Street" (a great movie - I recommend renting it if you haven't seen it).

  

In the classical understanding, maximizing profit is the principle responsiblity of business and overrides all other considerations - as suggested by the cartoon, below. In this case, the felt need to maximize profit is a structural variable that is, a characteristic of the overall system that encourages certain kinds of behaviors and discourages others. Other structural variables might include the way the culture and reward structure is set up (see the Case Application on Lehman Brothers, p. 154) and the structure of the political system.


The classical view prioritizes the interests of the owners/shareholders of a business. In contrast, the socioeconomic view (which underlies both social responsiveness and social responsibility (p. 131) emphasizes the need for business to consider the interests of a broader range of group, including "the public". Exhibit 5-1 provides an interesting list of the pros and cons of social responsibility as a criteria for management. Key questions for the socioeconomic view include "which groups should be considered" and "how should their interests be interpreted and ordered?". As the section on Ethics in an International Context (p. 139) suggests, it may be increasingly difficult for companies to avoid the ethical complications that come with doing business on a global stage (for a recent example see the hot water Walmart has gotten into in Mexico in recent years for bribery).


Finally, the chapter discusses different ways to encourage ethical behavior in organizations. (I find it interesting that none of the mechanisms suggested address structural variables - for example the profit-maximizing imperative suggested by the classical view). As Robbins and Coulter suggest, codes of ethics can be useful but they are not sufficient for maintaining ethical "codes of ethics may not work as well as we think they should" 

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