Business Ethics Fundamentals

MGT 3800 Chapter 61

Chapter OutlineBusiness Ethics and Public OpinionWhat Does Business Ethics Mean?Ethics, Economics and Law: Venn ModelFour Important Ethics Questions

Three Models of Management EthicsMaking Moral Management ActionableDeveloping Moral JudgmentElements of Moral JudgmentSummary

Introduction Business EthicsPublics interest in business ethics increased during the last four decadesPublics interest in business ethics spurred by the media

IntroductionInventory of Ethical Issues in Business

Employee-Employer RelationsEmployer-Employee RelationsCompany-Customer RelationsCompany-Shareholder RelationsCompany-Community/Public Interest

Publics Opinion of Business EthicsGallup Poll finds that only 17 percent to 20 percent of the public thought the business ethics of executives to be very high or high To understand public sentiment towards business ethics, ask three questionsHas business ethics really deteriorated?Are the media reporting ethical problems more frequently and vigorously?Are practices that once were socially acceptable no longer socially acceptable?

Business Ethics: What Does It Really Mean? Expected and Actual Levels of Business EthicsEthical ProblemEthical ProblemSocietys Expectations of Business EthicsActual Business Ethics1950sEarly 2000sTimeBusiness Ethics:Today vs. Earlier Period

Business Ethics: What Does It Really Mean?DefinitionsEthics involves a discipline that examines good or bad practices within the context of a moral dutyMoral conduct is behavior that is right or wrongBusiness ethics include practices and behaviors that are good or bad

Business Ethics: What Does It Really Mean?Two Key Branches of EthicsDescriptive ethics involves describing, characterizing and studying moralityWhat isNormative ethics involves supplying and justifying moral systemsWhat should be

Conventional Approach to Business EthicsConventional approach to business ethics involves a comparison of a decision or practice to prevailing societal normsPitfall: ethical relativism

Decision or Practice Prevailing Norms

Sources of Ethical Norms

Ethics and the LawLaw often represents an ethical minimumEthics often represents a standard that exceeds the legal minimumEthicsLawFrequent Overlap

Making Ethical Judgments Behavior or act that has been committedPrevailing norms of acceptabilityValue judgments and perceptions of the observercompared with

Ethics, Economics, and Law6-14

Four Important Ethical QuestionsWhat is?What ought to be?How to we get from what is to what ought to be?What is our motivation for acting ethically?

3 Models of Management EthicsImmoral ManagementA style devoid of ethical principles and active opposition to what is ethical.Moral ManagementConforms to high standards of ethical behavior.Amoral ManagementIntentional - does not consider ethical factorsUnintentional - casual or careless about ethical considerations in business

3 Models of Management EthicsThree Types Of Management Ethics

Three Approaches to Management Ethics6-18

Three Models of Management Morality and Emphasis on CSR6-19

Moral Management Models and Acceptable Stakeholder Thinking6-20

Making Moral Management Actionable Important FactorsSenior managementEthics trainingSelf-analysis

Developing Moral Judgment6-22

Developing Moral Judgment6-23

Developing Moral JudgmentExternal Sources of a Managers ValuesReligious valuesPhilosophical valuesCultural valuesLegal valuesProfessional values

Developing Moral JudgmentInternal Sources of a Managers ValuesRespect for the authority structureLoyaltyConformityPerformanceResults

Elements of Moral JudgmentMoral imaginationMoral identification and orderingMoral evaluationTolerance of moral disagreement and ambiguityIntegration of managerial and moral competenceA sense of moral obligation

Elements of Moral JudgmentAmoral ManagersMoral ManagersMoral ImaginationMoral IdentificationMoral EvaluationTolerance of Moral Disagreement and AmbiguityIntegration of Managerial and Moral CompetenceA Senses of Moral Obligation

Selected Key TermsAmoral managementBusiness ethicsCompliance strategyConventional approach to business ethicsDescriptive ethicsEthical relativism EthicsFeminist EthicsImmoral management

Integrity strategyIntentional amoral managementKohlbergs levels of moral developmentMoral developmentMoral managementNormative ethicsUnintentional amoral management

Selected Key TermsAmoral managementBusiness ethicsEthicsImmoral managementLevels of moral developmentMoral managementMorality

1Business Ethics and Public OpinionThe Gallup PollHas Business Ethics Really Deteriorated?Are the Media Reporting Ethical Problems More Vigorously?Is It Society That Is Actually Changing?What Does Business Ethics Mean?The Conventional Approach to Business EthicsEthics and the LawMaking Ethical JudgmentsFour Important Ethics QuestionsWhat Is?What Ought to Be?How Do We Get from What Is to What Ought to Be?What Is Our Motivation in All This?Three Models of Management EthicsImmoral ManagementMoral ManagementAmoral ManagementTwo HypothesesMaking Moral Management ActionableDeveloping Moral JudgmentLevels of Moral DevelopmentSources of a Managers ValuesElements of Moral JudgmentMoral ImaginationMoral Identification and OrderingMoral EvaluationTolerance of Moral DisagreementIntegration of Managerial and Moral CompetenceA Sense of Moral ObligationSummary