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BUSINESS ETHICS

"Like Nailing Jell-O to the Wall" What are ethics?


A simple definition for "ethics" is those standards or morals a person sets for himself or herself regarding what is good and bad and right and wrong. If something is "ethical", it does not necessarily mean that it is legal, and vice-versa. This is partially because ethics are "subjective" that is, each person s ethics are uni!ue to that individual. "or e#ample, $ally, who wor%s at &ec%er s, may give a carton of mil% to a young mother with a baby who has no money for food. Though $ally believes this action is ethical, it is not legal. Another employee may not see $ally s action as ethical. faced with two or more conflicting ethical issues, and has to ma%e a choice. 2. &usiness to *mployee. A business has a responsibility to act ethically towards its employees. 0ost importantly, employers must hire and fire people in ethical ways. 1ages and wor%ing conditions are a second ethical issue. &usinesses must ensure that employees are paid a fair wage, and that wor%ing conditions are reasonable. "or instance, paying a wor%er 32 per day is considered unethical. The same could be said of having an employee wor% in a room filled with to#ic fumes that would cause illness. (rivacy is the final ethical issue with respect to employees. This includes random drug testing4 and listening to employee telephone calls. *mployee to &usiness. *mployees have ethical responsibilities towards their employers. $ome of importances include ta%ing a part-time job with a competitor4 lea%ing company secrets4 wasting company time4 and theft from the employer. &usiness to *#ternal *nvironment. &ecause businesses e#ist within a community from which they ta%e resources, some ethicists believe that businesses have ethical responsibilities to the community. This obligation to protect and enhance the society is called $ocial ,esponsibility. This also includes responsibilities to the customers from which they earn profits. The main areas of $ocial ,esponsibility are' *cology and environmental !uality - preventing and cleaning pollution, noise control, recycling, preserving land. )onsumerism - truth in advertising, warranties, control of harmful products. )ommunity needs - helping charities, aid with health care and urban renewal. -overnmental relations - elimination of bribery of officials and lobbying, following laws. 0inorities and disadvantaged persons - providing training and opportunities for these groups. 7abour relations - permitting unions, negotiating fairly, providing fair wor%ing conditions and compensation.

Where do ethics come from?


The most common factors that form a person s individual ethics are' "amily Influences. (eople tend to develop beliefs about ethics and morals from their parents, brothers, and sisters based on observing their behaviour, and punishment for doing things that the family perceives as "unethical". (eer Influences. )lassmates and others in a person s social networ% can shape ethics. (eer pressure, for e#ample, can help determine how much a person is willing to engage in !uestionable activities li%e shoplifting, lying, etc. (ast *#periences. +ften, the conse!uences of previous behaviour condition a person to feel comfortable with certain ethical standards. "or instance, if a sales person lies to a customer to ma%e a sale and then is reprimanded by the manager, he or she would li%ely perceive lying as undesirable behaviour and unethical. +n the other hand, if the person ma%es the sale, and is rewarded by the manager, lying may become perceived as a desirable and ethical behaviour. ,eligious Affiliation. -enerally, a person s religious affiliation .if one e#ists/, will shape what that person perceives as right and wrong. 5.

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$ituational "actors. (eople adjust their ethics to suit certain circumstances. "or instance, $ally in the e#ample above, would probably have changed her behaviour if the customer had been a well-dressed parent who drove up in a &01.

Business ethics
&usiness managers face ethical dilemmas .ethical !uestions/ almost every day. *thical dilemmas occur when a manager is

L. Pinto, Teaching Business thics

!rguments !gainst Business thics


8ltimately, businesses e#ist to ma%e a profit for their owners and shareholders. In most cases, ethical behaviour adds e#penses to the business, reducing profits. (rofits are a good thing they ensure that people have jobs. The smaller the profits, the fewer income ta# dollars are paid, which would hurt government programs. The government ta%es care of ensuring that businesses do things in an ethical way. 9o other forms of business ethics are re!uired.

!rguments for "usiness ethics


&usiness, li%e government, is a system that affects not only its managers and employees, but all members of the community. 0any business decisions affect the lives of people in important ways. If businesses operate in unethical ways, this can contribute to people getting sic% .as a result of pollution or defective products/4 or consumers could get ta%en advantage of .through false advertising/. The :arvard &usiness ,eview suggests that well over three-!uarters of businesses are trying to build ethics into their organi;ations. 0any business managers believe that, though more costly in the short run, ethical behaviour is profitable in the long run as customers and government regulators will appreciate it. This will ultimately result in higher profits. &usinesses earn huge profits from members of the community they owe it to the communities to put something bac% through donating to charities. "or e#ample, the major ban%s earn 35 - 36 billion dollars a year each. A small portion of that should go bac% to the communities from which it came.

<eontology is the belief that there are some things that a person should do ."right"/, and others a person should not do ."wrong"/. (eople should do the right things .such as being honest/, and refrain from doing the wrong things .such as stealing/, regardless of what the conse!uences are. This can cause problems, if doing the right thing has a negative conse!uence. "or e#ample, if you are honest about the whereabouts of someone being sought by the police and wrongly accused of crime, the conse!uence is that an innocent person will be arrested. Another problem with deontology is that no clear method e#ists classify behaviours and actions as absolutely right and absolutely wrong. <eontological arguments are based on adhering to sets of rules. 8tilitarianism suggests that you choose the behaviour or action that will result in the greatest good for the greatest number of people. It does not matter if the actual behaviour is "right" or "wrong", the result is %ey. 8tilitarian arguments are based on meeting a specific goal, and not on following rules.

%iscussion &uestions
2. $ome business ethicists argue that "acting" ethical in order to increase profits in the long run is unethical that businesses should be ethical because they want to contribute to the community. :ow do you feel about that statement= 1hy do you thin% the title of this article is "&usiness *thics - 7i%e 9ailing >ell-+ to a 1all"= <o you agree that the government should regulate aspects of a business to ensure they operate ethically= If so, what sorts of things should be regulated= "9o corporation is truly ethical unless it has banished all forms of e#ternal motivation for employees." 1hat do you thin% this statement means= ,econsider the story discussed earlier about $ally the convenience store owner who gave a carton of mil% to the poor mother. 1hat would a deontologist say about $ally s action= 1hat would a utilitarian say= <o you prefer deontology or utilitarianism= 1hy=

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thical #rame$orks
An ethical framewor% is a system that a person can use to help ma%e a decision when faced with a moral dilemma. :ere, two framewor%s will be described' deontology, and utilitarianism.

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L. Pinto, Teaching Business thics

BUSINESS ETHICS
'ase Worksheet

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(nstructions
2. 5. 6. ?. Two members of your group must choose to play managers, two play ethicists. *ach group will receive a case envelope. *veryone in the group must reads the case articles sheets in your envelope. *ach person answers the !uestions on this sheet .to be handed in at the time you present/. Cour group will have class time to prepare a presentation .ma#imum 2D minutes long/. The instructions are shown below. 0a%e sure that you read your peer evaluation sheet so you %now what is e#pected of you. The presentation should include' An introduction in which the bac%ground of the case is described to the class. A role play in which all members of the group participate, and argue their sides using an ethical framewor%. A conclusion, where you reflect upon the role play, and discuss the ethical issues involved and how they could be resolved in "real life".

&uestions)

2. <escribe the ethical dilemma you will be faced with. 1hat are the main issues= 1hat facts do you have=

5. 1ill you use a deontological argument, or a utilitarian argument in your presentation= 1hy=

6. <escribe what information you plan to communicate in your argument to the other side.

?. :ow do you thin% the other side will respond to your argument=

@. 1ith your group, write up an outline to describe your role play. *#plain which members will be doing the introduction, which will be doing the conclusion, and what information you plan to communicate.

L. Pinto, Teaching Business thics

BUSINESS ETHICS
*elf +eflection Worksheet

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Total

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In the space below, write a personal reflection on this activity. In it, describe your personal feelings about the case and related issues that you presented. )omment on how effectively you feel you argued your part, and what you would do differently if you were to repeat the e#ercise.

L. Pinto, Teaching Business thics

BUSINESS ETHICS
Peer ,aluation *heet

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Item
)larity of (resentation ,ole (lay Arguments )onclusion

Cons#der These Th#n$s


Appropriateness of language (reparedness of group All members participated )lear introduction -ood interaction among members ,ealistic positions $ound, realistic, and clear arguments made 8se of ethical framewor%s .deontology, utilitarianism/ )onclusion made sense given the case ,easonable possibilities for solutions offered Add up all the numbers you circled to determine the mar%.

Mark %c#rcle one&


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'roup Mark

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BUSINESS ETHICS
Peer ,aluation *heet

Cour 9ame' BBBBBBBBBBBBBBBBBBBBBBBBBBBB )ase 9ame' BBBBBBBBBBBBBBBBBBBBBBBBBBBBB 9ames of presenters' BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB

Item
)larity of (resentation ,ole (lay Arguments )onclusion

Cons#der These Th#n$s


Appropriateness of language (reparedness of group All members participated )lear introduction -ood interaction among members ,ealistic positions $ound, realistic, and clear arguments made 8se of ethical framewor%s .deontology, utilitarianism/ )onclusion made sense given the case ,easonable possibilities for solutions offered Add up all the numbers you circled to determine the mar%.

Mark %c#rcle one&


2 2 2 2 5 5 5 5 6 6 6 6 ? ? ? ? @ @ @ @

'roup Mark

("

L. Pinto, Teaching Business thics

BUSINESS ETHICS
Lesson Plan and Teacher (nstructions
)b*ect#ves
&y the end of the activity, students will' Enowledge' understand and define the concept of business ethics identify current ethical issues in business

$%ills apply various ethical framewor%s in order to solve ethical dilemmas create and perform a role play that demonstrates an understanding of ethics and of contemporary ethic issues that relate to business appreciate societal and personal needs for business ethics in modern commerce

Attitudes'

Mater#als Needed
+ne copy of "&usiness *thics 7i%e 9ailing >ello to the 1all" per person. $i# &usiness *thics case envelopes each containing' ? copies of a common case study4 5 copies each of confidential notes for managers and confidential notes for ethicists. *ach envelope contains a separate topic' *mployee 0onitoring :armful (roduct F2 .0il% and Agricultural :ormones/ :armful (roduct F5 .Tobacco in <eveloping )ountries/ )hild 7abour )ustomer (rivacy Eids and )lassrooms. +ne )ase 1or%sheet per person. +ne $elf-,eflection 1or%sheet per person. "ive (eer *valuation $heets per person.

+evelopment Strate$y
2. "irst )lass' <istribute "&usiness *thics 7i%e 9ailing >ello to the 1all". -o through %ey concepts with students. The delivery should be informal, and students should have the opportunity to contribute, creating a discussion atmosphere. $tudents will respond to the discussion !uestions in class. The teacher will e#plain the forthcoming assignment to students, and form groups. The pac%ages will be distributed to students4 they are e#pected to complete the re!uired reading for homewor%. 5. $econd )lass' $tudents will have time to wor% on formulating their role plays within their groups. The teacher will be present to assist with difficulties, and ensure students critically evaluate their positions. 6. Third )lass' $tudents will present their role plays. $pecific instructions and e#pectations appear on the attached student handouts. (eer evaluation will ta%e place. $tudents will complete the $elf-,eflection 1or%sheet as homewor%.

L. Pinto, Teaching Business thics

BUSINESS ETHICS -armful Product ./

L. Pinto, Teaching Business thics