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Business Ethics Concepts

Business Ethics Concepts

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Business Ethics, Anderson University DBA Fall 2001
2001by Karl R. Knapp
Page 1 of 17
Business Ethics Concepts & Cases
ummary of the main points of the first two chapters in the book. The remaining chapters are application of the concepts summarized as relating to political forms of government and market systems. These further chapters are less relevant to the DBA class that this summary was prepared for.
Chapter 1 ± Ethics & Business
is the principles of conductgoverning an individual or a group. It isthe study of morality.
are the standards that anindividual or group has about what is rightand wrong, or good and evil.
oral norms 
can usually be expressed asgeneral rules or statements, such as´Always tell the truthµ.
oral values 
canusually be expressed as statementsdescribing objects or features of objectsthat have worth, such as ´Honesty isgoodµ and ´Injustice is badµ.Five characteristics can help pin down thenature of moral standards.1.
oral standards deal with matters that we think can seriously injure orseriously benefit human beings.2.
oral standards are not established orchanged by the decisions of particularlegislative bodies.3.
 We feel that moral standards should bepreferred to other values including (especially?) self-interest.4.
oral standards are based on impartialconsiderations. ² that is, a point of  view that does not evaluate standardsaccording to whether they advance theinterests of a particular individual orgroup, but one that goes beyondpersonal interests to a ´universalµstandpoint in which everyone·sinterests are impartially counted asequal.5.
oral standards are associated withspecial emotions and a special vocabulary.
is the discipline that examines one·smoral standards or the moral standards of a society.
 Ethics is the study of moral standards 
  ² the process of examining the moralstandards of a person or society todetermine whether these standards arereasonable or unreasonable in order toapply them to concrete situations andissues. The ultimate aim of ethics is todevelop a body of moral standards that wefeel are reasonable to hold ² standardsthat we have thought about carefully andhave decided are justified standards for usto accept and apply to the choices that fillour lives.
Business Ethics, Anderson University DBA Fall 2001
2001by Karl R. Knapp
Page 2 of 17
 Although ethics is a normative study of ethics, the social sciences engage in adescriptive study of ethics. A
normative study 
aims to discover what should be. A
descriptive study 
attempts to describe orexplain the world without reaching any conclusions about whether the world is asit should be.
The Nature of Business Ethics
Business ethics 
concentrates on the moralstandards as they apply to businesspolicies, institutions, and behavior.Business ethics, in other words, is a formof applied ethics. It includes not only theanalysis of moral norms and moral values,but also attempts to apply the conclusionsof this analysis to that assortment of institutions, technologies, transactions,activities, and pursuits that we callbusiness.Business ethics investigates three differentkinds of issues: systemic, corporate, andindividual.
 ystemic issues 
in business ethicsare ethical questions raised about theeconomic, political, legal, and other socialsystems within which businesses operate.
Corporate issues 
in business ethics are ethicalquestions raised about a particularcompany.
Individual issues 
in business ethicsare ethical questions raised about aparticular individual or particularindividuals within a company.Because corporate acts originate in thechoices and actions of human individuals,it is these individuals who must be seen asthe primary bearers of moral duties andmoral responsibility. Nonetheless, it makesperfectly good sense to say that acorporate organization has moral dutiesand that it is morally responsible for itsacts. The fact that multinationals operate inmore than one country produces ethicaldilemmas for their managers thatmanagers of firms limited to a singlecountry do not face.
 The ability to shift its operationsbetween countries enables themultinational to escape the socialcontrols that a single nation mightattempt to impose on the multinationaland can allow the multinational to play one country against another.
It can sometimes transfer raw materials, goods and capital among itsplants in different countries at termsthat enable it to escape taxes and fiscalobligations that companies limited to asingle nation must bear.
 They often have the opportunity totransfer a new technology or set of products from a more developedcountry into nations that are lessdeveloped.
It is often faced with the quandary of deciding which of these differentnorms and standards to implement inits many operations.
 Ethical relativism 
is the view that there areno ethical standards that are absolutely true and that apply or should be applied tothe companies and people of all societies. Thus, the theory of ethical relativismimplies that whatever the majority in oursociety believes about morality isautomatically correct. The fundamentalproblem with ethical relativism is that itholds that the moral standards of a society are the only criteria by which actions inthat society can be judged. Almost all ethical issues raised by new technologies are related in one way or
Business Ethics, Anderson University DBA Fall 2001
2001by Karl R. Knapp
Page 3 of 17
another to questions of risk.
any of theethical issues new technologies havecreated ² especially informationtechnologies ² are related to privacy.Information technologies have also raiseddifficult ethical issues about the nature of the right to property when the property inquestion is information. Finally,biotechnology has created yet another hostof troubling ethical issues.
Moral Development & Moral Reasoning 
 As people mature, they change their valuesin very deep and profound ways. Theability to make reasoned moral judgmentsdevelops in identifiable stages (Kohlberg).
 At these first two stages, the child is able torespond to rules and social expectations andcan apply the labels of good, bad, right and wrong. These rules, however, are seen assomething externally imposed on the self.1.
Punishment and Obedience Orientation 
²  At this stage, the physicalconsequences of an act wholly determine the goodness and badnessof that act.2.
Instrument and Relativity Orientation 
²  At this stage, right actions becomethose that can serve as instrumentsfor satisfying the child·s needs of theneeds of those for whom the childcares.
aintaining the expectations of one·s ownfamily, peer group, or nation is now seen as valuable in its own right, regardless of theconsequences.1.
Interpersonal ConcordanceOrientation ² Good behavior at thisearly conventional stage is living tothe expectations of those for whomone feel loyalty, affection, and trust,such as family and friends.2.
aw and Order Orientation 
² Right and wrong at this more matureconventional stage now come to bedetermined by loyalty to one·s ownlarger nation or surrounding society.
Post Conventional, Autonomous, or Principled 
 At these stages, the person no longer simply accepts the values and norms of the groups to which he or she belongs. Instead the personnow tries to see situations from a point of  view that impartially takes everyone·s interestsinto account.1.
ocial Contract Orientation 
² At thisfirst post-conventional stage theperson becomes aware that peoplehold a variety of conflicting personal views and opinions and emphasizesfair ways of reaching consensus by agreement, contract, and dueprocess.2.
niversal Ethical PrinciplesOrientation ² At this final stage,right action comes to be defined interms of moral principles chosenbecause of their logicalcomprehensiveness, universality andconsistency.
 Although people generally progressthrough the stages in the same sequence,not everyone progresses through all thestages. Kohlberg has been criticized forclaiming that the higher stages are morally preferable to the lower stages. It fails toadequately trace out the pattern of development of women. Females, Gilliganclaimed, tend to see themselves as part of a ´webµ of relationships. For women,morality is primarily a matter of ´caringµand ´being responsibleµ for others with whom one is involved in personalrelationships, and not a matter of adhering to impartial and impersonal rules.
oraldevelopment for women is marked by progress toward more adequate ways of caring and being responsible for oneself and for others. This is called the
care  perspective 
oral reasoning 
refers to the reasoning process by which human behaviors,institutions, or policies are judged to be inaccordance with or in violation of moralstandards.
oral reasoning alwaysinvolves two essential components:

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