Social & Legal Issues

Business Ethics and Values

Social & Legal Issues

Business Ethics

The application of general ethical concepts to the unique situations confronted

in business
business. It asks what is right or wrong behavior in business and what
principles or rules can be used as guidance in business situations.

Social & Legal Issues

Relativism

Egoism

The 4
Concepts of
Ethics
Utilitarianism

Deontologism

Social & Legal Issues

Relativism

There
h is
i no universal
i
l standard
d d by
b which
hi h morality
li can be
b judged
j d d
What is correct for one society may be wrong for another
Ethics and morality are relative

Social & Legal Issues

Egoism

One ought to act in his or her own self interest

Ethical behavior is that which promotes ones own self interest

Social & Legal Issues

Utilitarianism

The morality of an action can be determined by its consequences

An action is ethical if it promotes the greatest good for the greatest number

Social & Legal Issues

Deontologism

Derived from the Greek word for Duty

Actions are not justified by their consequences. Factors other than good
outcomes determine the rightness of actions

Social & Legal Issues

Company value

Customer Focus: Customers are the focus of our business. Align all
business objectives with the expectations of customers. Build long term
customer relationships through superior performance.
performance Responsive,
Responsive
straight-forward and committed in all dealings with customers.
Continuous Improvement: Committed to improving everything.
The relentless pursuit of excellence drives our daily activities. Operate in an
environment that encourages innovation and creativity and is naturally
skeptical of maintaining the status quo.

Social & Legal Issues

Company values

Q
Quality:
y A ggoal of a company
p y is to be the recognized
g
leader in our
marketplace; recognized for innovation, quality, responsiveness and value.
Continuously strive to be the standard by which performance is measured.
Respect for the Individual: Treat people with dignity, fairness and courtesy.
Create an inclusive environment that is focused on a common purpose.
p p
Continual invest in our people. Diversity in people and perspective is valued
Teamwork: Success is achieved through collaborative efforts committed to
achieving

Social & Legal Issues

Company Values

Innovation: Apply original thought, creativity, and sound business

jjudgment
g
to overcome obstacles,, meet aggressive
gg
goals
g
and improve
p
products and processes.
Committed to technical and market leadership
Integrity: Conduct business with the highest standards of ethics,
developing
p g a mutual trust with each other, customers, shareholders,
suppliers and the community. Integrity is the foundation of everything.

Social & Legal Issues

Whistle blowing
Whistle-blowing
"Our lives begin to end the day we become
silent about things that matter."
-Martin Luther King, Jr.

Social & Legal Issues

Definition of Whistle-Blowing
Whistle Blowing
One
O who
h reveals
l wrong-doing
d i within
i hi an organization
i i
to the public or to those in positions of authority.
One
O who
h di
discloses
l
information
i f
i about
b
misconduct
i
d in
i
their workplace that they feel violates the law or
endangers the welfare of others.
others
One who speaks out, typically to expose corruption or
dangers to the public or environment
environment.

Social & Legal Issues

Types of Whistle-Blowing
Whistle Blowing
Internal Whistle-Blowing

External Whistle-Blowing

9 When an individual
advocates beliefs or
revelations within the
organization.

9 When and individual

advocates beliefs or
revelations outside the
organization.

Social & Legal Issues

Altruistically Motivated
Utilitarian
Uninterested in Altering Their
Behavior
Allows Own Attitudes and Beliefs
to Guide Them
Often are Well Educated and
Holds Professional Positions

Social & Legal Issues

Do
D iit anonymously
l
let the evidence speak for itself and protect yourself if possible

Do
D it in
i a group
charges have more weight and wont seem like a personal vendetta.

Present just the evidence

leave interpretation of facts to others.

Work through internal channels

start with your immediate supervisor or follow the standard
reporting procedure

Work through external channels

go public (biggest risk)

Social & Legal Issues

Effects of Whistle-Blowing
Whistle Blowing
F
Forced
d to lleave
organization/demotion
Credibility
C dibili ruined
i d
Family, health, and/or
lif in
life
i jeopardy
j
d
Outrage and
di i i
divisiveness
off people
l
directly or indirectly
involved

Physical or
psychological isolation
Organization
experiences loss of
money, restitution,
productivity, and
positive reputations.
Incarceration

Social & Legal Issues

Protection Laws
The Whistleblower
Protection Law ~ 1989

The Whistleblower Act

~ 1994

Social & Legal Issues

2002: Year of the Whistleblower

Cynthia Cooper
WorldCom

Coleen Rowley
FBI

Sherron Watkins
Enron

Social & Legal Issues

Sherron Watkins

Former Vice President of Enron Corporation

Alerted then
then-CEO
CEO Ken Lay in August 2001
to accounting irregularities within the
company

Warned that Enron 'might implode in a wave

of accounting scandals.'

Testified before Congressional Committees

from the House and Senate investigating
Enron's demise.

Lauded in the press for her courageous

actions, but left her job at Enron after a few
months
th when
h she
h wasn't't given
i
muchh to
t do
d

Social & Legal Issues

Coleen Rowley

Fanny Pack

FBI staff attorney

Wrote 13-page memo to FBI Director about pre9/11 intelligence in May 2002

Testified for the Senate Judiciary Committee

Concerned the FBI was becoming more

bureaucratic and micromanaged

Helped government focus on better intelligence

management

Social & Legal Issues

Cynthia Cooper

WorldComs Director of Internal Audit

Her team discovered $3 billion in questionable

expenses

Met with 4 executives to track down and explain the

undocumented expenses

g , WorldCom stock frozen,,

Disclosed findings,
corporate credit rating went from B+ to CCC-

Remained as VP of Internal Audit, not promoted, no

gratitude,
tit d resented
t d by
b employees
l

Social & Legal Issues

Case
JJonica
i Gunson
G
iis the
h environmental
i
l compliance
li
manager for
f a
small plastics manufacturing company. She is currently faced
p
money
y on new
with the decision whether or not to spend
technology that will reduce the level of a particular toxin in the
wastewater that flows out the back of the factory and into a
lake.
lake
The factory's emission levels are already within legal limits.
However,, Jonica knows that environmental regulations
g
for this
particular toxin are lagging behind scientific evidence. In fact,
a scientist from the university had been quoted in the
newspaper recently
recently, saying that if emission levels stayed at
this level, the fish in the lakes and rivers in the area might soon
have to be declared unsafe for human consumption.

Social & Legal Issues

Case
F
Further,
h if companies
i in
i the
h region
i don't
d ' engage in
i some selflf
regulation on this issue, there is reason to fear that the
ggovernment backed byy ppublic opinion
p
mayy force
companies to begin using the new technology, and may also
begin requiring monthly emission level reports (which would
be both expensive and time consuming).
consuming)
But the company's environmental compliance budget is tight.
Askingg for this new technology
gy to be installed would pput
Jonica's department over-budget, and could jeopardize the
company's ability to show a profit this year.

Social & Legal Issues

Questions for Discussion:

What motives would the company
p y have to
install the new technology?
What motives would the company have to
delay installing the new technology?
Why might the companies in this region prefer
for the ggovernment to impose
p
new regulations?
g

Social & Legal Issues

Case

Chantale works
orks as a clerk for A
Avco
co En
Environmental
ironmental Ser
Services,
ices a small
toxic-waste disposal company.
The company has a contract to dispose of medical waste from a local
hospital During the course of her work,
hospital.
work Chantale comes across
documents that suggest that Avco has actually been disposing of some
of this medical waste in a local municipal landfill. Chantale is shocked.
She knows this practice is illegal. And even though only a small
portion
i off the
h medical
di l waste that
h Avco
A
handles
h dl is
i being
b i disposed
di
d off
this way, any amount at all seems a worrisome threat to public health.
Chantale gathers together the appropriate documents and takes them to
her immediate superior,
superior Dave Lamb.
Lamb Dave says,
says "Look,
"Look I don't think
that sort of thing is your concern, or mine. We're in charge of recordkeeping, not making decisions about where this stuff gets dumped. I
gg you
y dropp it."
suggest

Social & Legal Issues

Case

The next
ne t day,
da Chantale decides to go one step further,
f rther and talk to Angela
van Wilgenburg, the company's Operations Manager. Angela is clearly
irritated. Angela says, "This isn't your concern. Look, these are the sorts of
g moves that let a little company
p y like ours compete
p with our
cost-cutting
giant competitors. Besides, everyone knows that the regulations in this area
are overly cautious. There's no real danger to anyone from the tiny amount
of medical waste that 'slips' into the municipal dump. I consider this matter
closed "
closed."
Chantale considers her situation. The message from her superiors was loud
and clear. She strongly suspects that making further noises about this issue
could jeopardize her job.
job Further,
Further she generally has faith in the company
company'ss
management. They've always seemed like honest, trustworthy people. But
she was troubled by this apparent disregard for public safety. On the other
hand, she asks herself whether maybe Angela was right in arguing that the
d
danger
was minimal.
i i l Chantale
Ch
l looks
l k up the
h phone
h
number
b off an old
ld friend
fi d
who worked for the local newspaper.

Social & Legal Issues

Questions for Discussion

What should Chantale do?
What are the reasonable limits on loyalty to
one's
' employer?
l
?
Wou
Wouldd it makee a difference
d e e ce if Chantale
C
e hadd a
position of greater authority?
Would
W ld it make
k a difference
diff
if Chantale
Ch t l had
h d
scientific expertise?