Managing Business Ethics

Chapter 1

by Linda Klebe Trevio and Katherine A. Nelson

Chapter 1 Overview
Taking away the mystery
Isnt business ethics just a
fad?
Can business ethics be
taught?
Defining ethics
Managing ethics
Bringing ethics down to size
Ethics and the law

Definition of Business
Ethics
The principles, norms, and standards
of conduct governing an individual
or group

CHARACTERISTICS OF INDIVIDUALS
Individual Differences
Cognitive Biases

Process of Individual Ethical Decision-Making

Behavior
MORAL
ETHICAL
ETHICAL
AWARENESS
JUDGMENT
BEHAVIOR

CHARACTERISTICS OF ORGANIZATIONS
Group and Organizational Pressures
Organizational Culture

Aspen Institute Research

2,000 MBA students (2001 graduates)
Expect difficult values conflicts on job
Most would leave job rather than try to
change things from within
Two-thirds felt that strong ethics code was the
mark of a well-run company
Only 10% consider a companys ethics code
an important factor in their decision to join an
organization

Other Research
Industry Week survey:
75% of respondents say that the ethics code is
meaningful in their company

Ethics Resource Center:

70% of respondents say that they have never
observed illegal or unethical conduct on the job
70% say respect, trust, and honesty are applied
frequently in their company
85% say that supervisors and executives model
ethical behavior

Why Bother Teaching Ethics?

Bad apples are
encouraged by bad
barrels
Good character isnt
always enough
Adults develop moral
judgment into their 30s
Conduct is influenced
by environment

Relationship between Ethics

and the Law
Ethics
Ethics

Law

Test Your Cynicism Quotient

1 = Strongly Disagree 5 = Strongly Agree

Financial gain is all that counts in business.

Ethical standards must be compromised in business practice.
The more financially successful the business person, the more
unethical the behavior.
Moral values are irrelevant in business.
The business world has its own rules.
Business persons care only about making profit.
Business is like a game one plays to win.
In business, people will do anything to further their own interest.
Competition forces business managers to resort to shady practices
The profit motive pressures managers to compromise their ethical
concerns.