Rising Concerns

							                                              Rising Concerns

                             Business Ethics


        Public’s interest in business ethics increased during the
         last three decades
        Public’s interest in business ethics has been spurred
         by the media
        The Enron incident has come to define modern ethics
         scandals




Chapter 6- 1
                                     More Cause for Concern
               2000 National Business Ethics Survey Findings

      One in eight employees feel pressure to compromise their
       organization’s ethics standards
      Two-thirds attribute this pressure to internal sources
      One in three employees observes misconduct at work
      Misconduct observed most include lying, withholding
       information, abusive behavior toward employees, misreporting
       time worked, and discrimination
      One in three employees fears retaliation
      Employees say that their organizations’ concern for ethics is a
       reason they continue to work there

Chapter 6- 2
                                      Business Ethics: Today vs. Earlier Periods


                                                                          Society’s
         Expected and Actual Levels




                                                                          Expectations of
                                                                          Business Ethics
             of Business Ethics




                                                                          Ethical Problem

                                                                          Actual
                                                Ethical                   Business Ethics
                                                Problem



                                        1960s             Time   Early 2000s
Chapter 6- 3
                                        Business Ethics:
                               What Does It Really Mean?
                        involves a discipline that examines
               Ethics   good or bad practices within the
                        context of moral duty and obligation



                        relates to principles of right and wrong
   Moral conduct        in behavior



                        concerned with good and bad or
         Business       right and wrong behavior and
          Ethics        practices that take place in business

Chapter 6- 4
                                   Business Ethics:
                          What Does It Really Mean?

                     involves describing, characterizing
       Descriptive   and studying morality
         Ethics
                     focuses on “What is”


                     involves supplying and justifying
        Normative    moral systems
         Ethics
                     focuses on “What should be”


Chapter 6- 5
                                Conventional Approach
                                    to Business Ethics

      The conventional approach to business ethics
      involves a comparison of a decision or practice to
      prevailing societal norms


                                      Prevailing Norms
       Decision or Practice
                                       of Acceptability




Chapter 6- 6
                           Sources of Ethical Norms

               Fellow      Local      Regions of
               Workers   Community     Country


               Family                 Profession
                            The
                         Individual
               Friends   Conscience   Employer


               The Law    Religious   Society at
                           Beliefs      Large


Chapter 6- 7
               Specific “Norms” that Shape Business Ethics

         Respect for the authority structure
         Loyalty to bosses and the organization
         Conformity to principles and practices
         Performance
         Results




Chapter 6- 8
                        Why Managers Behave Ethically

                            1. To avoid some punishment
           Most of Us
                            2. To receive some reward

                            3. To be responsive to family, friends,
                               or superiors
          Many of Us
                            4. To be a good citizen




      Very Few Of Us        5. To do what is right, pursue some ideal




Chapter 6- 9
                                         Ethics and the Law
          Law USUALLY represents an ethical minimum
          Law reflects society’s codified ethics
          Ethics SOMETIMES represents a standard that
           exceeds the legal minimum
          What




Chapter 6- 10
                                                   Ethics and the Law
                                 Ethical              Unethical
                    L
                    e
                    g      Most Business Actions           ??????
                    a
                    l



                    I      Resisting slavery and   Enron, HealthSouth,
                    l            apartheid         MCI, Parmalat
                    l
                    e
                    g
                    a
                    l


Chapter 6- 11
                Source: Dalton and Cosier (1982)
                                   Making Ethical Judgments


       Behavior or act that has   compared with     Prevailing norms of
          been committed                               acceptability




                              Value judgments and
                               perceptions of the
                                    observer




Chapter 6- 12
                Ethics, Economics, and Law




Chapter 6- 13
                     Four Important Ethical Questions

 1.       What is?
 2.       What ought to be?
 3.       How to we get from what is to what ought to be?
 4.       What is our motivation for acting ethically?




Chapter 6- 14
                Three Models of Management Ethics


                              Amoral Management



                   Moral Management



      Immoral Management


Chapter 6- 15
                Three Models of Management Ethics

       Immoral       A style devoid of ethical principles
     Management      and active opposition to what is ethical



        Moral        Conforms to high standards
     Management      of ethical behavior


                        Intentional: does not consider
       Amoral            ethical factors
     Management         Unintentional: casual or careless
                         about ethical factors

Chapter 6- 16
                 Characteristics of Immoral Managers

          Intentionally do wrong
          Self-centered and self-absorbed
          Care only about self or organization’s profits
          Actively oppose what is right, fair, or just
          Exhibit no concern for stakeholders
          Are the “bad guys”
          An ethics course probably would not help them



Chapter 6- 17
                   Characteristics of Moral Managers
        Conform to high level of ethical or right behavior
        Conform to high level of personal and professionals
         standards
        Ethical leadership is commonplace
        Goal is to succeed within confines of sound ethical
         precepts
        High integrity is displayed
        Embrace letter and spirit of the law
        Possess an acute moral sense and moral maturity
        Are the “good guys”
Chapter 6- 18
                   Characteristics of Amoral Managers
    Intentionally Amoral Managers:
        Don’t think ethics and business should “mix”
        Business and ethics are existing in separate spheres
        A vanishing breed

    Unintentionally Amoral Managers:
        Don’t consider the ethical dimension of decision making
        Don’t “think ethically”
        Have no ethics “taste-buds”
        Well-intentioned, but morally casual or unconscious
        Ethical gears are in neutral

Chapter 6- 19
                Making Moral Management Actionable

       Senior management leads the transition from
           amoral to moral management
              Business ethics training
              Codes of conduct
              Mission/Vision statements
              Ethics officers
              Tighter financial controls
              Ethically sensitive decision-making processes
              Leadership by example

       Recognize that amoral management exists
Chapter 6- 20
                             Developing Moral Judgment

                Kohlberg’s Levels of Moral Development

            Level 1              Preconventional Level



            Level 2               Conventional Level



            Level 3             Postconventional Level



Chapter 6- 21
                Developing Moral Judgment




Chapter 6- 22