Business Ethics[4]

Business ethicsStart off with choicesVideo--What would you NOT do.Definitions (p. 106-107)Ethics standards about what is good/bad right or wrong with one’s conductEthical behavior is generally accepted as what is right or good behaviorBeyond legal issues.Often confronted as a manager with making ethical choices. IssuesWhat is right and good or wrong and bad to whom?Ethics covers all aspect of decision and business. Daily interactionsHonesty vs white lies with othersConflicts of interestEnvironmental issuesProduct safety and reliabilityAccounting and stockholdersInformation technology and privacy (cookies). New problem.Single parent. Excessively late. Talked once and warned. Got better for one month but then back to old patterns. What do you do? How do you determine what is right?Utilitarianism and individualism. Act in self interest. If everyone is free to do so (major assumption), the good of society is served.Moral rights—Freedom comes with Rights and Responsibilities. Contractual relationship.Justice view—impartial and fair treatment for all. Treat all similarly. Define rulesCare view compassion for those who need it. Treat everyone differently. Some have greater needs than others.Difficulties in ethicsEthics is relativistic (Cultural relativism) or constant.Examples: Bribes, child labor, sexual harassment, pollution.Do Businesses really care?Evidence for caring.Evidence for not caring.Evidence for CaringCompanies engage in codes of ethics.Ethical standards for dealing with different issues.A number of companies put ethics in their mission statements.Some companies of ethics officers (usually internally auditors).Most importantlyMost companies (not all) operate fairly and honestly with customers and other external groups such as suppliers and bankersEvidence for not caringBottom line is to make money at any reasonable cost.Bottom line is for me to get ahead of others in my career at any reasonable cost.Do employees care Survey of 2000 secretaries58% of secretaries lie about their supervisors whereabouts27% have shared confidential information17% have notarized a document without witnessing a signature12% have changed or been involved with changing the minutes of a meeting10% have destroyed damaging informationWhat will you do if asked? What will you ask others to do?Why Unethical/ethicalBottom line question.Book suggests that diverse interests.What makes people behave ethically or ethically or unethically.Small group of people who have strong sense of ethics. Strong value base. People who are willing to risk quality of life for values. Thoreau, Nelson Mandela, Gahndi, Martin Luther King.Most of us have relativistic ethicsMoral dilemmas are complex. We are forced to make lots of choices. Often act in self interest.Examples with pollution. An owner and an employee.Both were “good” people. No difference than the current batch of accountants. Arthur Anderson—Leader in Ethics.People act in an organization and organization influences behavior. Lets talk about the examples. Why did people do what they did?The most important is the organization.Logistics issue.Truckers 10 hours a time max.Irate customer calls and shipment is 4 hours away if driver violates time rules.Policy satisfaction or money back.What does this rule do?Columbia and HCAGet double digit profits in industry that grows in single digits. On top of that, 50% of business is medicaid medicare with predefined prices. How to achieve?The employing organizationEndemic to culture--short term interests prevail over long term interests.Self-interest vs interests of othersWhat are the long term benefits of making ethical decisions.Creating a culture that supports ethical behavior.Long term relationshipsBook suggests codes of Ethics and training. While a help, Arthur Anderson did this.Selection is important and does help.Watch dog—Ethics officer. Whistle Blower.Role ModelReward systems (need to go beyond quality and quantity).Sensitivity to organizational rules and practices that make ethical behavior difficult.Minimizing power of supervisors and empowering subordinates in teams.SummaryWhy be ethical?Why do some managers take advantage of their leadership positionsWhat are the main reasons managers become corrupted.How well should you reward good ethical behavior.Short term vs Long termYour reputation is all that you have.Finish with a story about someone by the name of Janetta.