common form of cheating in schools today. ETHICS AND YOU Studies found a strong relationship between academic dishonesty and dishonesty at work. 4-2 3-3 Corporate Governance Broader responsibility --
Private corporations have responsibility to society that extend beyond making a profit
3-6 Carrolls 4 Responsibilities 3-7 Corporate Stakeholders Affect or are affected by the achievement of the corporations objectives
3-8 Corporate Stakeholders Stakeholder Analysis
Primary stakeholder Sufficient bargaining power to affect outcomes
Secondary stakeholder Indirect stake but are affected by corporations actions
Stakeholder Input Determine whether input is necessary
ACTING RESPONSIBLY TO SATISFY SOCIETY Responsibilities of Business 2-9 Johnson & Johnsons Credo (Part 1) 2-10 Johnson & Johnsons Credo (Part 2) 2-11 RESPONSIBILITIES TO THE GENERAL PUBLIC? 3-12 Responsibilities to the General Public 2-13 Guidelines for Environmental Claims in Green Marketing 2-14 . Consumers tend to favor industries that are environmentally friendly thus encouraging green marketing a strategy that promotes environmentally safe products and production methods Environmental concerns are creating new technologies, which raises new issues, such as concerns about genetic engineering Corporate philanthropy can assist businesses by: providing altruistic opportunities increasing employee morale enhancing the business image improving customer relationships making communities better places for businesses to exist providing an opportunity to align company marketing with their charitable giving
3-15 Responsibilities to Customers Consumerismpublic demand that a business consider the wants and needs of its customers in making decisions. 2-16 Right to Be Safe Consumers should feel assured that what they purchase will not harm them in normal use Product Liability Testing and warning labels Right to Be Informed Consumers should have enough access to education and product information to make responsible buying decisions False advertising etc. 2-17 The Right to Choose To select which goods and services they want and need to purchase Socially responsible firms attempt to preserve this right, even if their own sales are diminished. The Right to Be Heard Should be able to express legitimate complaints to appropriate parties
2-18 Responsibilities to Employees Workplace Safety. Quality of Life Issues. Balancing work and family is becoming an increasingly difficult task due to additional demands, such as caring for elderly parents and children, and running more complex households and schedules flexible work arrangements subsidized or on-site child care subsidized education assistance with household tasks Ensuring Equal Opportunity in the Job. Age Discrimination. Harrassment Labour Laws in Pakistan Provincial in nature now 2-19 Responsibilities to Investors and the Financial Community Fundamental goal of any business is to make a profit. William J. Byron Maximizing profits is like maximizing food it cannot be your primary goal Investors and the financial community demand that businesses behave ethically as well as legally. 2-20 3-21 Ethical Behavior business ethics
Argument that there is no such thing it is an oxymoron
3-22 Ethical Decision Making Corporate practices --
Massive write-downs and restatements of profit Misclassification of expenses as capital expenditures Pirating corporate assets for personal gain
3-23 Ethical Decision Making Recent Survey Results --
70% distrust business executives Enron WorldCom 3-24 Reasons for Unethical Behavior Provocative Question --
Why are businesspeople perceived to be acting unethically? 3-25 Reasons for Unethical Behavior Perceptions caused by --
Not aware of impropriety Cultural norms and values vary Governance systems based on rule or relationships Differences in values between businesspeople and key stakeholders 3-26 Reasons for Unethical Behavior Allport-Vernon-Lindzey Study of Values --
Aesthetic Economic Political Religious Social Theoretical 3-27 Reasons for Unethical Behavior Most common reasons for bending rules --
Organizational performance required it Ambiguous or out of date rules Pressure from others everyone else does it 3-28 Moral Relativism Morality is relative to some personal, social, or cultural standard and there is no method for deciding whether one decision is better than another.
Nave relativism Role relativism Social group relativism Cultural relativism 3-29 Kohlbergs Levels of Moral Development 1. Preconventional level
Characterized by a concern for self Personal interest Avoidance of punishment 3-30 Kohlbergs Levels of Moral Development 2. Conventional level
Characterized consideration of societys values External code of conduct 3-31 Kohlbergs Levels of Moral Development 3. Principled level
Characterized by adherence to internal moral code Universal values or principles 3-32 Encouraging Ethical Behavior Codes of Ethics
Specifies how an organization expects its employees to behave on the job.
Compliance-Based Ethics Code -- Emphasize preventing unlawful behavior by increasing control and by penalizing wrongdoers. Integrity-Based Ethics Code -- Define the organizations guiding values, create an environment that supports ethically sound behavior and stress a shared accountability among employees.
Ethical Reasoning Codes of conduct cannot detail a solution for every ethical situation. So corporations provide training in ethical reasoning. Ethical Awareness the foundation of shaping ethical conduct in an organization 1. Helps employees identify ethical problems 2. Provides guidance as to how to respond Code of Conduct & Ethical Reasoning constitute ethical awareness
3-33 Ethics starts at the top Trust between workers and managers must be based on fairness, honesty, openness and moral integrity. Leadership can help instill corporate values in employees.
3-34 HOW ORGANIZATIONS SHAPE ETHICAL CONDUCT Structure of an Ethical Environment 2-35 Ethical Action Helping employees recognize and reason through ethical problems and turning them into ethical actions. 1. Firms must also provide structures and approaches that allow decisions to become ethical actions 2. Individual, departmental and organizational goals can affect ethical behavior 3. Ethical action can be encouraged by providing support, such as hotlines to report wrong doing Ethical Leadership 1. Executives must demonstrate ethical behavior, especially in extreme or emergency situation 2. All employees must be personally committed to the companys core values and be willing to behave accordingly 3. Must charge and challenge every employee with the responsibility to be an ethical leader 4. Everyone should be aware of transgressions and be willing to defend the organizations standards.
2-36 ACTING RESPONSIBLY TO SATISFY SOCIETY Social Responsibilitymanagements acceptance of the obligation to consider profit, consumer satisfaction, and societal well-being of equal value in evaluating the firms performance. Social Auditsformal procedures that identify and evaluate all company activities relate to social issues such as conservation, employment practices, environmental protection, and philanthropy.
2-37 SOCIAL AUDITING Social Audit -- A systematic evaluation of an organizations progress toward implementing programs that are socially responsible and responsive. Four Types of Social Audit Watchdogs - Socially conscious investors - Environmentalists - Union officials - Customers 4-38 SOCIAL RESPONSIBILITY Recognition that business must be concerned with qualitative dimensions of consumers, employees, and society benefits, as well as the quantitative measures of sales and profits. Historically, social performance was measured by the organizations contribution to the overall economy and employment opportunities. Today additional factors include: providing equal employment opportunities respecting cultural diversity of employees and customers responding to environmental concerns providing a safe, healthy workplace producing safe, high-quality products
3-39 3-40 Encouraging Ethical Behavior Guidelines for Ethical Behavior
Ethics
Morality
Law 3-41 Encouraging Ethical Behavior Approaches to Ethical Behavior
Utilitarian Judged by consequences
Individual Rights Fundamental rights in all decisions
Justice Distribution in equitable fashion Distributive justice Fairness Retributive justice What other forms? 3-42 Encouraging Ethical Behavior Approaches to Ethical Behavior
Categorical imperative golden rule Means - Ends
MIND MAP & CASE Integrate all the concepts Case study discussion
3-43 2-44 Common Business Ethical Challenges On-the-Job Ethical Dilemmas Conflict of Interestsituation in which a business decision may be influenced for personal gain. Ethical ways to handle conflicts of interests can be avoiding them or disclosing them
Honesty and Integrity Honesty when a person can be counted on to tell the truth Integrity involves adhering to deeply felt ethical principles; includes doing what you say you are going to do Violations are widespread 2-45 On-the-Job Ethical Dilemmas Loyalty vs. Truthbusinesspeople expect their employees to be loyal and truthful. But ethical conflicts may arise.
Whistleblowingemployees disclosure to government authorities or the media of illegal, immoral, or unethical practices in the organization.
2-46 1. Top management must adopt and unconditionally support an explicit corporate code of conduct. 2. Employees must understand that senior management expects all employees to act ethically. 3. Managers and others must be trained to consider the ethical implications of all business decisions.
(continued) HOW TO IMPROVE BUSINESS ETHICS 4-47 4. An ethics office must be set up with which employees can communicate anonymously. Whistleblowers -- People who report illegal or unethical behavior. HOW TO IMPROVE BUSINESS ETHICS 5. Involve outsiders such as suppliers, subcontractors, distributors and customers. 6. The ethics code must be enforced.