Business ethics
Start off with choices Video--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 bankers
Evidence 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.