Chapter 4 Revising and Proofreading Business Messages Ch. 4-1.
Business Ethices Ch#1
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Transcript of Business Ethices Ch#1
Copyright © 2003 by South-Western, a division of
Thomson Learning 1
Chapter One
Business Ethics, The Changing
Environment, And Stakeholder Management
Copyright © 2003 by South-Western, a division of Thomson Learning 2
Chapter Topics1. Business ethics and the changing
environment2. What is business ethics? Why does it
matter?3. Levels of business ethics4. Five myths about business ethics5. Why use ethical reasoning in business?6. Can business ethics be taught and
trained?
Copyright © 2003 by South-Western, a division of Thomson Learning 3
Business Ethics and the Changing Environment Businesses & governments operate in changing
technological, legal, economic, social & political environments with competing stakeholders & power claims.
Stakeholders are individuals, companies, groups & nations that cause and respond to external issues, opportunities, and threats.
The rate of change and uncertainty in which stake- holders & society must make & manage business & moral decisions have accelerated due to the impact of:
Internet and information technologies Globalization Deregulation Mergers Wars
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Environmental Forces and Stakeholders
Local, national, and international environments are increasingly moving toward and into a global system of dynamically interrelated interactions among local, national, and regional politics, economies, regulations, technologies, demographics, and international law.
Economic environment Technological Political Governmental and regulatory Legal Demographic
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Stakeholder Management Approach The stakeholder management approach is a way
of understanding the effects of environmental forces and groups on specific issues that affect real-time stakeholders and their welfare.
This approach attempts to enable individuals and groups to articulate collaborative win-win strategies: based on:
Identifying and prioritizing issues, threats, or opportunities Mapping who the stakeholders are Identifying their stakes, interests, and power sources Showing who the members of coalitions are or may become Showing what each stakeholder’s ethics are and should be Developing collaborative strategies and dialogue from a
higher ground perspective to move plans and interactions to the desired closure for all parties
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What is Business Ethics? Why Does It
Matter? Ethical solutions to business and organizational
problems may have more than one right alternative and sometimes, no right solution may seem available.
We can learn from case studies, role playing, and discussions about how our actions affect others in different situations.
Laura Nash has defined business ethics as “the study of how personal moral norms apply to the activities and goals of commercial enterprise,” as dealing with three basic areas of managerial decision making:
Choices about what the laws should be and whether to follow them
Choices about economic and social issues outside the domain of law
Choices about the priority of self-interest over the company’s interests
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What Are Unethical Business Practices?
Surveys have identified the following recurring themes to prominent everyday ethical issues facing businesses and their stakeholders:
Managers lying to employees Office nepotism and favoritism Taking credit for other’s work Receiving/offering kickbacks Stealing from the company Firing an employee for whistle-blowing Padding expense accounts Divulging confidential information or trade
secrets Terminating employment without sufficient notice Using company property/materials for personal
use
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What Are Unethical Business Practices?
The most unethical behavior, per one survey, happens in the following areas:
Government Sales Law Media Finance Medicine Banking Manufacturing
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Why Does Ethics Matter In Business?
“Doing the right thing” matters to employers, employees, stakeholders, and the public.
For companies, it means saving billions of dollars each year in lawsuits, settlements, and theft
Tobacco industry Dow Corning
Costs to businesses include: Deterioration of relationships Damage to reputation Declining employee productivity,creativity,
and loyalty Ineffective information flow throughout the
organization Absenteeism
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Levels of Business Ethics
Because ethical problems are not only an individual or personal matter, it is helpful to see the different levels at which issues originate and how they move to other levels.
Five levels are: Individual Organizational Association Societal International
Examination of the RU 486 story
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Asking Key Questions The following questions can be asked when a
problematic decision or action is experienced or perceived before it becomes an ethical dilemma:
What are my core values and beliefs? What are the core values and beliefs of my
organization? Whose values, beliefs, and interests may be at
risk in this decision? Why? Who will be harmed or helped by my decision or
by the decision of my organization? How will my own and my organization’s core
values and beliefs be affected or changed by this decision?
How will I and my organization be affected by the decision?
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Five Myths About Business Ethics
A myth is “a belief given uncritical acceptance by the members of a group, especially in support of existing or traditional practices and institutions.”
Myth 1: Ethics is a personal, individual affair, not a public or debatable matter
Myth 2: Business and ethics do not mix Myth 3: Ethics in business is relative Myth 4: Good business means good
ethics Myth 5: Information and computing are
amoral
Myth 1: Ethics is a personal, individual affair, not a public or debatable matter
This myth supported in part by Milton Friedman, a well known economist.
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Myth 2: Business and ethics do not mix This myth is based on scientific,
rather than religious or ethical, principles.
This myth given by widespread consequences of compute hacking on individual, commercial and govt system that effect public welfare.
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Myth 3: Ethics in business is relative
It holds that no right or wrong way of believing or acting exists.
Right and wrong are in the eyes of the beholder
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Myth 4: Good business means good ethics
Myth 5: Information and computing are amoral
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Why Use Ethical Reasoning In Business? Ethical reasoning is required in business
for at least three reasons: Many times laws are insufficient and do not
cover all aspects or gray areas of a problem Free-market and regulated-market
mechanisms do not effectively inform owners and managers about how to respond to complex issues and crises that have far-reaching ethical consequences
Complex moral problems require an intuitive or learned understanding and concern for fairness, justice, and due process to people, groups, and communities
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Can Business Ethics Be Taught And Trained?
Ethic courses should not: Advocate a set of rules from a
single perspective Not offer only one best solution to
specific ethical problems Not promise superior or absolute
ways of thinking and behaving in situations
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Can Business Ethics Be Taught And Trained?
Ethic courses and training can do the following:
Provide people with rationales, ideas, and vocabulary
Help people make sense of their environments Provide intellectual weapons Enable employees to act as alarm systems for
company practices Enhance conscientiousness and sensitivity Enhance moral reflectiveness and strengthen
moral courage Increase people's ability to become morally
autonomous ethical dissenters Improve the firm’s moral climate
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Can Business Ethics Be Taught And Trained?
Other scholars argue that ethical training can add value to the moral environment of a firm and to relationships in the workplace by:
Finding a match between employer’s and employee’s values
Managing the push-back point Handling an unethical directive Coping with a performance system
that encourages unethical means
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Stages Of Moral Development
Kohlberg’s 3 levels of moral development: Level 1: Preconventional level (self-orientation)
Stage 1: Punishment Stage 2: Reward seeking
Level 2: Conventional level (others orientation)
Stage 3: Good person Stage 4: Law and order
Level 3: Postconventional level (universal, humankind orientation)
Stage 5: Social contact Stage 6: Universal ethical principles