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Plagiarizing from Internet materials is the most


common form of cheating in schools today.
ETHICS AND YOU
Studies found a strong
relationship between
academic dishonesty
and dishonesty at work.
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Corporate Governance
Broader responsibility --

Private corporations have responsibility to
society that extend beyond making a profit

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Social Responsibility
.
Milton Friedman
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Corporate Governance
Carrolls 4 Responsibilities

Economic
Legal
Ethical
Discretionary

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Carrolls 4 Responsibilities
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Corporate Stakeholders
Affect or are affected by the
achievement of the corporations
objectives

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Corporate Stakeholders
Stakeholder Analysis

Primary stakeholder
Sufficient bargaining power to affect outcomes

Secondary stakeholder
Indirect stake but are affected by corporations actions

Stakeholder Input
Determine whether input is necessary


ACTING RESPONSIBLY TO SATISFY SOCIETY
Responsibilities of Business
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Johnson & Johnsons Credo (Part 1)
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Johnson & Johnsons Credo (Part 2)
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RESPONSIBILITIES TO THE GENERAL PUBLIC?
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Responsibilities to the General Public
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Guidelines for Environmental Claims in Green Marketing
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. Consumers tend to favor industries that are environmentally
friendly
thus encouraging green marketing a strategy that promotes environmentally safe
products and production methods
Environmental concerns are creating new technologies, which raises new issues,
such as concerns about genetic engineering
Corporate philanthropy can assist businesses by:
providing altruistic opportunities
increasing employee morale
enhancing the business image
improving customer relationships
making communities better places for businesses to exist
providing an opportunity to align company marketing with their charitable giving

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Responsibilities to Customers
Consumerismpublic demand that a business consider the wants and needs of its customers
in making decisions.
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Right to Be Safe
Consumers should feel assured that what they purchase will not harm them in normal use
Product Liability
Testing and warning labels
Right to Be Informed
Consumers should have enough access to education and product information to make
responsible buying decisions
False advertising etc.
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The Right to Choose
To select which goods and services they want and need to purchase
Socially responsible firms attempt to preserve this right, even if their own sales are
diminished.
The Right to Be Heard
Should be able to express legitimate complaints to appropriate parties

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Responsibilities to Employees
Workplace Safety.
Quality of Life Issues.
Balancing work and family is becoming an increasingly difficult task due to
additional demands, such as caring for elderly parents and children, and
running more complex households and schedules
flexible work arrangements
subsidized or on-site child care
subsidized education
assistance with household tasks
Ensuring Equal Opportunity in the Job.
Age Discrimination.
Harrassment
Labour Laws in Pakistan
Provincial in nature now
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Responsibilities to Investors and the Financial Community
Fundamental goal of any business is to make a profit.
William J. Byron
Maximizing profits is like maximizing food
it cannot be your primary goal
Investors and the financial community demand that businesses behave ethically as
well as legally.
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Ethical Behavior
business ethics

Argument that there is no such thing it is an
oxymoron


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Ethical Decision Making
Corporate practices --

Massive write-downs and restatements of profit
Misclassification of expenses as capital
expenditures
Pirating corporate assets for personal gain


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Ethical Decision Making
Recent Survey Results --

70% distrust business executives
Enron
WorldCom
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Reasons for Unethical Behavior
Provocative Question --

Why are businesspeople perceived to be
acting unethically?
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Reasons for Unethical Behavior
Perceptions caused by --

Not aware of impropriety
Cultural norms and values vary
Governance systems based on rule or
relationships
Differences in values between
businesspeople and key stakeholders
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Reasons for Unethical Behavior
Allport-Vernon-Lindzey Study of Values --

Aesthetic
Economic
Political
Religious
Social
Theoretical
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Reasons for Unethical Behavior
Most common reasons for bending rules --

Organizational performance required it
Ambiguous or out of date rules
Pressure from others everyone else does it
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Moral Relativism
Morality is relative to some personal, social,
or cultural standard and there is no method
for deciding whether one decision is better
than another.

Nave relativism
Role relativism
Social group relativism
Cultural relativism
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Kohlbergs Levels of Moral Development
1. Preconventional level

Characterized by a concern for self
Personal interest
Avoidance of punishment
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Kohlbergs Levels of Moral Development
2. Conventional level

Characterized consideration of societys values
External code of conduct
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Kohlbergs Levels of Moral Development
3. Principled level

Characterized by adherence to internal moral
code
Universal values or principles
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Encouraging Ethical Behavior
Codes of Ethics

Specifies how an organization expects its
employees to behave on the job.

Compliance-Based Ethics Code -- Emphasize
preventing unlawful behavior by increasing control and
by penalizing wrongdoers.
Integrity-Based Ethics Code -- Define the
organizations guiding values, create an environment
that supports ethically sound behavior and stress a
shared accountability among employees.


Ethical Reasoning
Codes of conduct cannot detail a solution for every ethical situation. So corporations
provide training in ethical reasoning.
Ethical Awareness the foundation of shaping ethical conduct in an organization
1. Helps employees identify ethical problems
2. Provides guidance as to how to respond
Code of Conduct & Ethical Reasoning constitute ethical awareness



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Ethics starts at the top
Trust between workers and managers must
be based on fairness, honesty, openness and
moral integrity.
Leadership can help instill corporate values in
employees.

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HOW ORGANIZATIONS SHAPE ETHICAL
CONDUCT
Structure of an Ethical Environment
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Ethical Action
Helping employees recognize and reason through ethical problems and
turning them into ethical actions.
1. Firms must also provide structures and approaches that allow
decisions to become ethical actions
2. Individual, departmental and organizational goals can affect ethical
behavior
3. Ethical action can be encouraged by providing support, such as
hotlines to report wrong doing
Ethical Leadership
1. Executives must demonstrate ethical behavior, especially in extreme
or emergency situation
2. All employees must be personally committed to the companys core
values and be willing to behave accordingly
3. Must charge and challenge every employee with the responsibility to
be an ethical leader
4. Everyone should be aware of transgressions and be willing to defend
the organizations standards.

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ACTING RESPONSIBLY TO SATISFY SOCIETY
Social Responsibilitymanagements acceptance of the obligation to consider profit,
consumer satisfaction, and societal well-being of equal value in evaluating the firms
performance.
Social Auditsformal procedures that identify and evaluate all company activities
relate to social issues such as conservation, employment practices, environmental
protection, and philanthropy.

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SOCIAL AUDITING
Social Audit -- A systematic evaluation of an
organizations progress toward implementing
programs that are socially responsible and
responsive.
Four Types of Social Audit Watchdogs
- Socially conscious investors
- Environmentalists
- Union officials
- Customers
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SOCIAL RESPONSIBILITY
Recognition that business must be concerned with qualitative
dimensions of consumers, employees, and society benefits, as
well as the quantitative measures of sales and profits.
Historically, social performance was measured by the organizations
contribution to the overall economy and employment
opportunities.
Today additional factors include:
providing equal employment opportunities
respecting cultural diversity of employees and customers
responding to environmental concerns
providing a safe, healthy workplace
producing safe, high-quality products

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Encouraging Ethical Behavior
Guidelines for Ethical Behavior

Ethics

Morality

Law
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Encouraging Ethical Behavior
Approaches to Ethical Behavior

Utilitarian
Judged by consequences

Individual Rights
Fundamental rights in all decisions

Justice
Distribution in equitable fashion
Distributive justice
Fairness
Retributive justice
What other forms?
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Encouraging Ethical Behavior
Approaches to Ethical Behavior

Categorical imperative
golden rule
Means - Ends


MIND MAP & CASE
Integrate all the concepts
Case study discussion

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Common Business
Ethical Challenges
On-the-Job Ethical Dilemmas
Conflict of Interestsituation in which a business decision
may be influenced for personal gain.
Ethical ways to handle conflicts of interests can be
avoiding them or disclosing them

Honesty and Integrity
Honesty when a person can be counted on to tell the
truth
Integrity involves adhering to deeply felt ethical principles;
includes doing what you say you are going to do
Violations are widespread
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On-the-Job Ethical Dilemmas
Loyalty vs. Truthbusinesspeople expect their employees to be loyal and truthful.
But ethical conflicts may arise.

Whistleblowingemployees disclosure to government authorities or the media of
illegal, immoral, or unethical practices in the organization.


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1. Top management must adopt and unconditionally
support an explicit corporate code of conduct.
2. Employees must understand that senior
management expects all employees to act
ethically.
3. Managers and others must be trained to consider
the ethical implications of all business decisions.

(continued)
HOW TO IMPROVE
BUSINESS ETHICS
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4. An ethics office must be set up with which
employees can communicate anonymously.
Whistleblowers -- People who report illegal or
unethical behavior.
HOW TO IMPROVE
BUSINESS ETHICS
5. Involve outsiders such as
suppliers, subcontractors,
distributors and customers.
6. The ethics code must be
enforced.

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