- Ethics is the study of how/ The manner by which we try to live our lives according to a standard of “right”

or “wrong” behavior—in both how we think and behave toward others and how we would like them to
think and behave toward us.; - Moral standards are principles based on religious, cultural,or philosophical
beliefs by which judgments are made about good or bad behavior.; - When individuals share similar
standards in a community, we can use the terms values and value system; The terms morals and values
are often used to mean a set of personal principles by which you aim to live your life.; - Value System: A
set of personal principles formalized into a code of behavior.; - Value; + Intrincsic value: the quality by
which a value is a good thing in itself and is pursued for its own sake, whether anything good comes from
that pursuit or not. Ex: happiness, self-respect, friendship, love, wisdom, pleasure, beauty, health < > +
Instrumental value: the quality by which the pursuit of one value is a good way to reach another value.
Ex: money is valued for what it can buy rather than for itself; - Doing the right thing: 1. Simple truth—
right and wrong or good and bad. Something that most people can understand and support. You assume that
everyone is committed to doing the right thing, and it’s not until you are exposed to unethical behavior that
you are reminded that, unfortunately, not all people share your interpretation of what “the right thing” is,
and even if they did, they may not share your commitment to doing it; 2. Personal Integrity: A question of
someone’s personal character. Demon-strated by someone’s behavior—looks at ethics from an external
rather than an internal viewpoint; 3. Rules of appropriate individual behavior: represent the idea that the
moral standards we develop for ourselves impact our lives on a daily basis in our behavior and the other
types of decisions we make.; 4. Rules of appropriate behavior for a community or society: remind us
that we must eventually bring our personal value system into a world that is shared with people who will
probably have both similar and very diff erent value systems.

- The Golden Rule: Do unto others as you would have them do unto you, or treat others as you would like
to be treated.;- Ethical Theories: 1)Virtue ethics:Aristotle’s belief in individual character and integrity
established a concept of living your life according to a commitment to the achievement of a clear ideal—
what sort of person would I like to become, and how do I go about becoming that person? The problem is
societies can place different emphasis on different virtue! Focus on actions and ideals, not results. < > 2)
Ethics for the greater good: more focused on the outcome of your actions rather than the apparent virtue
of the actions themselves, a focus on the greatest good for the greatest number of people. David Hume, also
referred to as utilitarianism. The problem is the idea that the ends justify the means. If all you focus on is
doing the greatest good for the greatest number of people, no one is accountable for the actions that are
taken to achieve that outcome; 3) Universal Ethics (moral principles accepted by most people):
Immanuel Kant, argues that there are certain and universal principles that should apply to all ethical
judgments. Actions are taken out of duty and obligation to a purely moral ideal rather than based on the
needs of the situation, since the universal principles are seen to apply to everyone, everywhere, all the time.
The problem is the reverse of the weakness in ethics for the greater good. If all you focus on is abiding by
a universal principle, no one is accountable for the consequences of the actions taken to abide by those
principles.; - Ethical Relativism: when faced with the requirement to select a model of how we ought to
live our lives, many people choose the idea of Ethical Relativism whereby the traditions of your society,
your personal opinions, and the circumstances of the present moment define your ethical principles. ; -
Ethical Dilemma: A situation in which there is no obvious right or wrong decision, but rather a right or
right answer, a situation that requires selecting between conflicting values that are important to the
employee or the organization.

- Ethical Reasoning: Looking at the information available to us in resolving an ethical dilemma, and
drawing conclusions based on that information in relation to our own ethical standards. Lawrence
Kohlberg’s Stages of Ethical Reasoning: Level 1: Preconventional: a person’s response to a perception
of right and wrong is initially directly linked to the expectation of punishment or reward.• Stage 1:
Obedience and punishment orientation. A person is focused on avoidance of punishment and deference
 to power and authority—that is, something is right or wrong because a recognized authority figure says it
is.• Stage 2: Individualism, instrumentalism, and exchange. a person is focused on satisfying his or her
own needs, right or wrong because it helps the person get what he or she wants or needs Level 2:
Conventional: aware of broader influences outside of the family.• Stage 3: “Good boy/nice girl”
orientation.: focused on meeting the expectations of family members, • Stage 4: Law-and-order
orientation: increasingly aware membership in a society and the existence of codes of behavior, right or
wrong because codes of legal, religious, or social behavior dictate it. Level 3: Postconventional: makes a
clear effort to define principles and moral values that reflect an individual value system rather than simply
reflecting the group position. Stage 5: Social contract legalistic orientation.: focused on individual rights
and the development of standards based on critical examination, right or wrong because it has withstood
scrutiny (xem xét kỹ lưỡng) by the society in which the principle is accepted.• Stage 6: Universal ethical
principle orientation. focused on self-chosen ethical principles that are found to be comprehensive and
consistent, right or wrong because it reflects that person’s individual value system and the conscious
choices he or she makes in life

- Business ethics involves the application of ethical standards of moral behavior to business
situations/behaviors. 2 distinct perspectives: 1. A descriptive summation of the customs, attitudes, and
rules that are observed within a business, simply documenting what is happening. 2. A normative
(prescriptive) evaluation of the degree to which the observed customs, attitudes, and rules can be said to be
ethical, more interested in recommending what should be happening; Stockholders or shareholders,
Employees, Customers, Suppliers/vendor partners, Retailers/wholesalers, Federal government, Creditors,
Community; Oxymoron: The combination of two contradictory terms, such as “deafening silence” or
-“jumbo shrimp” -> doubt if business can meet ethical objectives (maximize profit <> help people);
Corporate Governance: The system by which business corporations are directed and controlled.; Code of
Ethics: A company’s written standards of ethical behavior that are designed to guide managers and
employees in making the decisions and choices they face every day; - Ethical Dilemma (Types of
Conflicts): + Truth versus loyalty. + Short term versus long term. + Justice versus mercy +
Individual versus community.; - 3 resolution principles: + Ends-based.Which decision would provide
the greatest good for the greatest number of people? => focus on consequences+ Rules-based.What would
happen if everyone made the same decision as you? => ignore consequences, based on moral and universal
principles + The Golden Rule => put yourself in one’s shoes

- Organizational Culture: The values, beliefs, and norms that all the employees of that organization share.
The culture represents the sum of all the policies and procedures—both written and informal—from each of
the functional depart-ments in the organization in addition to the policies and procedures that are estab-
lished for the organization as a whole; - A value chain is composed of the key functional inputs that an
organization provides in the transfor-mation of raw materials into a delivered product or service.
Traditionally, these key functions are identified as: •Research and development (R&D)If “better, cheaper,
faster” is the ideal, then com-promises have to be made in functionality or manu-facturing to meet a
targeted cost figure. If too many features are taken out, salespeople face difficulties in selling the product
against stiff competition. If too few changes are made, the company cannot generate profit on each unit
and meet its obligations to shareholders. Product Quality. Do we use the best materials available or the
second best to save some money? Do we run a full battery of tests or convince ourselves that the computer
simulations will give us all the information we need? • Manufacturing: Do you want it built fast, or do
you want it built right?” want both, especially if you know that competitor racing to put a new product on
the market (and if it gets there before you do, all your sales projections for your product will be worthless).
Which corners can be cut, by how much. You want to build the product to the precise design specifications,
but what if there is a supply problem? Do you wait and hold up delivery, or do you go with an alternative
(and less reliable) supplier? Can you be sure of the quality that alternative supplier will give you? •
 Marketing (and advertising) => Utilitarianism: Marketers emphasize customer service and argue that
since their customers are satisfied, the good outcome justifies the methods used to achieve that outcome no
matter how misleading the message or how unnecessary the product sold. Universal ethics: how can you
be proud of an out-come when the customer never needed that product to begin with and was manipulated,
or at the very least influenced, by a slick ad campaign into feelings of envy, inadequacy, or inequality if he
or she didn’t rush out and buy it? • Sales • Customer service. Supporting each of these functional areas
are the line functions: •Human resource management (HRM): ensure ethics is a top organizational
priority; ensure leadership selection + development processes include an ethics component.; ensuring right
programs and policies are in place.; stay abreast of ethics issues (the changing legislation and sentencing
guidelines for unethical conduct). • Finance: Function (Financial transactions—the process by which
the flow of money through an organization is handled—involve receiving money from customers + using
that money to pay employees, suppliers, creditors (taxes,…), with hopefully enough leftover to create a
profit that can be either reinvested back into the business or paid out to owners/shareholders; Accounting
function keeps track of all financial transactions by documenting the money coming in (credits) and money
going out (deb-its) and balancing the accounts at the end of the period; Auditing function: Certification of
an organization’s financial statements, or “books,” as being accurate by an impartial third-party
professional. An organization can be large enough to have internal auditors as well as using external
professionals—typically certified professional accountants and/or auditing specialists. For small businesses,
most important customers are government agencies—state income and sales taxes and federal taxes the IRS
collects on the profits generated by business. Lenders , creditors want to see financial statements
certified.; . • Information systems (IS or IT), which maintain the technology backbone of the organization
—data transfer and security, e-mail communications, internal and external Web sites, as well as the
individual hardware and soft ware needs that are specific to the organization and its line of business. •
Management, the supervisory role that oversees all operational functions; - Conflict of Interest: A
situation in which one relationship/obligation places you in direct conflict with an existing
relationship/obligation.

- Corporate social responsibility (CSR) (corporate citizenship/corporate conscience: the actions of an

organization that are targeted toward achieving a social benefit over and above maximizing profits for its
shareholders and meeting all its legal obligations. This definition assumes that the corporation is operating
in a competitive environment and that the managers of the corporation are committed to an aggressive
growth strategy while complying with all federal, state, local legal obligations. These obligations include
payment of all taxes related to the profitable operation of the business, payment of all employer
contributions for its workforce, compliance with all legal industry standards in operating a safe working
environment for its employees, delivering safe products to its customers.; - Instrumental Approach The
perspective that the only obligation of a corporation is to maximize profits for its shareholders in providing
goods and services that meet the needs of its customers; - Social Contract Approach: The perspective that
a corporation has an obligation to society over and above the expectations of its shareholders; - The
Driving Forces behind Corporate Social Responsibility: 1. Transparency:We live in an information-
driven economy where business practices have become increasingly transparent. Companies can no longer
sweep things under the rug—whatever they do (for good or ill) will be known, almost immediately, around
the world. 2. Knowledge:The transition to an information-based economy also means that consumers and
investors have more information at their disposal than at any time in history. Th ey can be more dis-
cerning, and can wield more influence. Consumers visiting a clothing store can now choose one brand over
another based upon those companies’ respective environmental records or involvement in sweatshop
practices overseas 3. Sustainability: corporations are under increasing pres-sure from diverse stakeholder
constituencies to demonstrate that business plans and strategies are environmentally sound and contribute
to sustainable development 4. Globalization: The greatest periods of reform in U.S. history . . . produced
child labor laws, the minimum wage, the eight-hour day, workers’ compensation laws, unemployment
insurance, antitrust and securities regulations, Social Security, Medicare, the Community Reinvest-ment
Act, the Clean Air Act, Clean Water Act, Environmental Protection Agency, and so forth governmental
efforts to intervene in the economy in order to [improve] the worst excesses of market capitalism.
Globalization represents a new stage of capitalist development, this time without . . . public institutions [in
place] to protect society by bal-ancing private corporate interests against broader public interests. 5. The
Failure of the Public Sector: Many if not most developing countries are governed by dysfunc-tional
regimes ranging from the [unfortunate] and disorganized to the brutal and corrupt. In the United States and
other developed nations, citizens arguably expect less of government than they used to, having lost
confidence in the public sector as the best or most appropriate venue for addressing a growing list of social
problems. ; - As a testament to how seriously companies are now taking CSR, many have adapted their
annual reports to reflect a triple bottom-line approach (3BL), for which they provide social and
environmental updates alongside their primary bottom-line financial performance.; - CSR Bandwagon: +
Ethical CSR: Purest or most legitmate type of CSR in which organizations pursue a clearly defined sense
of social conscience in managing their financial responsibilities to shareholders, their legal responsibilities
to their local community and society as a whole, and their ethical responsibilities to do the right thing for
all their stakeholders. the relationship between companies and their consumers did not have to be an
adversarial one and that corporations should honor a social contract with the communities in which they
operate and the citizens they serve. + Altruistic CSR: Philanthropic approach to CSR in which
organizations underwrite specific initiatives to give back to the company’s local community or to
designated national or international programs. From an ethical perspective, this type is immoral since it
represents a violation of shareholder rights if they are not given the opportunity to vote on the initiatives
launched in the name of corporate social responsibility. Authorized without concern for the corporation’s
overall profitability+ Strategic CSR: Philanthropic approach to CSR in which organizations target
programs that will generate the most positive publicity or goodwill for the organization but which runs the
greatest risk of being perceived as self-serving behavior on the part of the organization.. Ethically
commendable because these initiatives benefit stakeholders while meeting fiduciary obligations to the
company’s shareholders. However, Without a win-win payoff, would such CSR initiatives be authorized?;
! Rather than waiting for the media or their customers to force them into better CSR practices, many
organizations are realizing that incorporating the interests of all their stakeholders (customers, employees,
shareholders, vendor partners, and their community partners), instead of just their shareholders, can
generate positive media coverage, improved revenues, higher profit margins. “Doing well by doing good”
seems, on the face of it, easy policy to adopt by making charitable donations, underwriting projects in their
local communities, sponsor-ing local events, and engaging in productive conversa-tions with special
interest groups about earth-friendly packaging materials and the use of more recyclable materials