Ethics in the Workplace CH3

Jordan Kabani
Sept 22, 2021
Ethics in the Workplace
- Ethics
o Beliefs about what is right and wrong or good and bad (DFN)
o An individual’s personal values and morals
 The social context they occur determines if their values are ethical or
unethical
- Ethical behaviour
o Behaviours that conforms to individuals beliefs and social norms about right vs
wrong
- Unethical behaviour
o Behaviour that individual beliefs and social norms define as wrong
- Business ethics
o The ethical or unethical behaviours by a business’s manager or employee (DFN)
Individual Ethics
- Ethics vary person to person and situation to situation / culture to culture
o Some things are universal
 Ex. stealing
- Identifications for behaviour
o Ethical and legal
 Giving good products to consumers
o Unethical and legal
 Making kids in india work for $2 an Hour 2 make ur clothes
o Ethical and illegal
 Robin hood
o Unethical and illegal
 Tax fraud
- Sometimes good/ethical things can’t be sold because they have the power to do evil
o Ex. a software that can block child-porn can also be used to censor specific info
govt. doesn’t want people to know
Individual Values and Morals
- Ethical views of individuals in a business
o Managers
o Employees
o Other legal representatives
 Determined by a combination of factors
 Childhood responses to situations
 Peers
 Media
 Etc
- Values support our agenda
o Ex. if making money is your agenda, your values support that goal
 Might deem scamming Indian kids as okay bc u get more money
Business and Managerial Ethics
- Managerial ethics
o The standards of behaviour that guide managers in their work (DFN)
o 3 categories:
 Behaviour toward employees
 Hiring and firing, wages and working conditions are ethical
questions
o In Canada they are “supposed” to only be based on
performance
 Paying worker less bc they can’t afford to quit isn’t illegal, but
maybe unethical?, maybe smart business?
 Personal Information Protection and Electronic Documents Act
(PIPEDA)
o Requires organizations to obtain consent to collect, use, or
disclose information about individuals.
 Behaviour toward the organization
 Employees & honesty:
o Employees stealing from employers
 Most employees are honest, but not all
 Conflict of interest
o Occurs when an activity benefits an employee at the
expense of the employer (DFN)
 o Most companies forbid buyers from accepting gifts from
suppliers

 Behaviour toward other economic agents

 Ethical disputes can arise between company &:
o Customers
o Competitors
o Stockholders
o Unions, etc
 Bribes are illegal and unethical in Canada, but not worldwide
Assessing Ethical Behaviour
- 3 step model to apply ethical judgements to situations in business
o Gather relevant factual information
o Determine most appropriate moral values
o Make an ethical judgment based on the rightness or wrongness of the proposed
activity or policy
- Applying this to Expense account claims
o Supposed to only be used for work related things: example:
 Manager takes a client to dinner 2 talk about business and it costs
 $100, and company is supposed to reimburse
 Next night same thing happens, but this time its 4fun instead of
business
o Manager bills company again: unethical, but more
money ;D
o 4 ethical norms to make a determination about moral values:
 Utility
 Does a particular act optimize what is best for those who are
affected by it
o The manager benefits, but owners don’t & co-workers
don’t
 Rights:
 Does it respect the rights of the individuals involved?
o Inflating expense count = bad for others
 Justice
 Is it consistent with what we regard to be fair?
o Unfair &
 Caring
  Is it consistent with people’s responsibilities to each other
o compromises manger’s responsibilities to others
 therefore it wouldn’t be ethical to submit the second receipt
Encouraging Ethical Behaviour in Organizations
- To promote ethical behaviour, managers need to understand why unethical behaviour
happens:
o Pressure
 Employee has a problem that can’t be solved via legit way
o Opportunity
 Can use unethical methods to solve a problem/get ahead
o Rationalization
 Employee seems themselves as ethical person in an unfortunate situation
- Ethics training good way to enforce ethics and standards
- (3 things below are ways to enforce ethics and standards)
Demonstrate Top Management Commitment to Values

- Top management needs to be committed to high ethical standards

o Ex. Mountain Equipment Co-op (MEC) does this well
- An organization’s business strategies can change, but core principles and values
shouldn’t change
Adopt Written Codes of Ethics

- Written code of ethics is a formal acknowledgement that a company intends to do good

business in an ethical manner
o Increases public confidence in a company
o Helps managers respond to illegal or unethical behaviour
o Improves internal operations
- 2/3 canadian companies have code of ethics
- Consistent enforcement is necessary for code of ethics to work
Provide Ethics Training

- Educating employees about ethics is key

o Giving reminders is also important
- Sometimes ethics training is done by people who previously done by those who went to
prison for breaking laws (extreme case/not as common)
- Dealing with ethical issues is difficult
Corporate Social Responsibility
- Corporate social responsibility (CSR)
o The way in which a business tries to balance its commitments to important
individuals and groups in its external environment (DFN)
- B Corp
o Provides certification for companies that want to meet rigorous standards for
social and environmental responsibility
- There are different views on social responsibility
o Managerial capitalism
 Company’s only responsibility is to make as much money as possible for
shareholders w.o breaking the law
o Some people worry businesses being too involved in social concerns will give
them too much power on how it is addressed
o Fair-trade movement
 A movement designed to help workers in developing countries receive fair
payments for their work (DFN)
 Bad stuff happening:
 Unfair wages
 Child labour (illegal)
 People not being paid for products they make overseas
 ChocoSol practices (and overdoes it in a good way) fair-trade movement
The Stakeholder Model of Responsibility
- Organizational stakeholders
o Individuals and groups that are direction affected by the practices of an
organization and that therefore have a stake in its performance (DFN)
- As there is more emphasis on a company’s social responsibility to stakeholders there is a
push to use a new measure to determine a return on investment:
o Social Return on Investment (SROI)
 Helps companies understand, manage and communicate social value of
activities to stakeholders
 Social responsibility to 5 types of stakeholders:
 Customers
 Employees
 Investors
 Suppliers
 Local communities
Responsibility Toward Customers:
- 3 Key areas for customer social responsibility
o Consumer Rights
o Unfair pricing
o Ethics in advertising

Consumer Rights

- Consumerism
o A social movement that seeks to protect and expand the rights of consumers in
their dealings with businesses (DFN)
o Consumer rights:
 Right to safe products
 Physical or mental health of consumers shouldn’t be damaged by a
company’s product
o Doesn’t always happen (mis sold) food = food poison by
accident
 The right to be informed about all relevant aspects of a product
 Ex. food has to have all ingredients on box
 Ex. clothes need to have their material make-up, etc
 The right to be heard
 Ex. you can call a number about a product if needed or return
 The right to choose what they buy
 People are allowed to buy what they want & have options (free-
market)
 The right to be educated about purchases
 Prescription drugs have warnings/explanations about
safety/dosage, side effects, etc
 Right to courteous service
 TLDR: good customer service from the bros
Unfair Pricing

- Collusion among companies

o Getting together to “fix” prices is against the law
- Max prison sentence for price fixing = 14 years
o Max fine = $25 million
Ethics in Advertising
 - Truth in advertising
o Advertising claims must be demonstratably true
o This is often violated
 Someone is paid by a company to give a movie a 1v9 review, but they
don’t rly exist
- Stealth advertising
o Pay real people to spread the word of how “good” their products are
 People believe strangers instead of company bc they think company trying
2 scam them but strangers not

- Morally objectionable advertising

o Portrayals of individuals or products that offend customers’ sense of decency.
 Ex. marketing tobacco or alcohol to teens
 Ex. Showing women in skimpy outfits
 Morally questionable
- Advertising of counterfeit brands
o Ex. china makes fake yeezys and sells them and ppl get scammed
Responsibility Toward Employees
- Basis for social responsibility behaviour toward employees:
o Recruiting, hiring, training, promoting, compensating
- Socially competent companies hire regardless of:
o Race, sex, political beliefs, etc
o Provide safe workplace
o Don’t tolerate sexual harassment in the workplace
o Pay a living wage
o Emphasize mental health
- Businesses need to respect the privacy of their employees
o How much is debatable
o Should truck drivers be drug tested?
 Yes?
 No?
 Maybe?
 12% failed a drug test so kinda monkaS
Whistle-Blowers

- Respecting people as employees means respecting their behaviour as ethically

responsible individuals.
 o If an employee finds illegal/unethical activity in the workplace they should report
it FAST
 They should believe management will do smth about it
- Whistle blower:
o An employee who discovers and tries to put an end to a company’s unethical,
illegal, or socially irresponsible actions by publicizing them (DFN)
o Are often fired, or demoted when they make public accusations
 Have to decide if ethics is more important to job.
- Canada has whistle-blower hotline to protect the bros

Responsibility Toward Investors

- Managers can be irresponsible to investors when they pay themselves 2 much more or
smth
- Financial mismanagement:
- Improper financial management, misrepresentation of finances, cheque kiting, insider
tracking
Improper Financial Management

- Bad decisions managers can make:

o Pay themselves 2 much money
o Give themselves bonuses
o Use company to buy like yacht or swiss watch (rolex gang)
o Use govt money for personal gain/waste investor money
Misrepresentation of Finances

- Producing false financial statements to make a company look more valuable than it is to
get more investors
Cheque Kiting

- Writing a cheque from account one into account 2 then spending the money from account
2 while the money is in transit
o Send money back and forth to urself so u have 2x the money or smth I guess?
Insider Trading

- Insider trading
 o The use of confidential information to gain from the purchase or sale of a stock
(DFN)
 Basically wall-street XD
- Traders use info not available to the general investor to buy a stock just before it goes up
or down bc they know when it will pump or dump
- Rly hard to prove insider trading because the evidence is very circumstantial

Responsibility Toward Suppliers

- Businesses need to have good relationships with suppliers because they mutually benefit
each other
o Keep suppliers updated with company plans and negotiate fair delivery schedule
 I scratch your back and you scratch mine type of thing

Responsibility Toward Local and International Communities

- Businesses can demonstrate social responsibility in local communities by donating to like
local soccer club or smth
Corporate Charitable Donations

- Many companies donate money and time to different causes

o Ex. Canada Goose pays for shipments to Artic communities
 Gotta help out the bros
o Ex. Ronald McDonald fund + McHappy Day etc
Responsibility Toward the Environment
- Pollution
o The injection of harmful substances into the environment (DFN)
- Controlling pollution large social responsibility challenge for business firms
- 3 main types:
o Air pollution
o Water pollution
o Land pollution
Air Pollution

- Air pollution
o When a combination of factors lowers air quality
  Ex. carbon monoxide emitted by automobiles adds air pollution
 ex. Smoke from manufacturing plants
- Canada air quality improved over last 30 years
o Shitty in places like china tho
- Air pollution has lead to emphasis on developing of clean renewable energy
o Wind
o Solar
o Hydroelectric power
- Goal is to prevent earth temperature from rising by more then 2 degrees Celsius
- Carbon tax:
o Potential way to reduce greenhouse gasses
o If u exceed amount of carbon u can use per year u get astro taxed
Water Pollution

- For many years businesses & municipalities dumped waste into water sources
o Rivers
o Lakes
o Streams, etc
o This doesn’t really happen as much but oil spills are still a problem
Land Pollution

- Toxic wastes
o Dangerous chemical and radio active by-products of manufacturing processes that
are harmful to animals and human
- Recycling
o The reconversion of waste materials into useful products (DFN)
o Was specifically developed to combat land pollution
- Biomass
o Plant and animal waste that can be recycled to produce energy
- Fracking
o Put chemicals in earth, so u can drill into places that u previously couldn’t for oil

 Problem: causes more earthquakes, and pollutes underground water

resources
Consumers and Pollution

- Consumers can take several actions to reduce pollution

o Recycling
o Walking instead of driving
 o Reducing household waste
o Using environmentally friendly products
Approaches to Social Responsibility
- 4 stances to social responsibility
o Obstructionist stance
 Companies do as little as possible to solve social and environmental
problems
 If they do smth unethical or illegal they try and deny or cover up their
actions
 Low regard for ethical conduct
o Defensive stance
 Companies do everything legally required of them but nothing more

Ex. a company would install pollution control equipment that’s legally
mandated, but wouldn’t get higher quality equipment
 This is most tobacco companies
o Accommodative stance
 Meets legal and ethical requirements and goes further in certain cases if
asked
 Ex. if girl guides ask them to buy cookies to support them, they
will say yes

o Proactive stance
 Takes to heart the arguments in favor of the CSR
 CSR = corporate social responsibility
 Commitment to maintain social responsibility by a corporation
 Ex. direct financial support from a company to various social programs
Managing Social responsibility Programs
- Happens at Formal and Informal Levels
Formal Activities
- Formal level
o Top management states strong support for CSR and makes it a factor in strategic
planning
 Requires support of management and a special agenda &executive
- Social audit
 o A systematic analysis of how a firm is using funds earmarked for social
responsibility goals and how effective these expenditures have been (DFN)
- Sustainable development
o Activities that meet current needs but will not put future generations at a
disadvantage when they try to meet their needs (DFN)
- Social audits and sustainability reports together constitute triple-bottom-line-reporting
o Measuring the social, environmental, and economic performance of a company
Informal Activities
- The culture of the organization is important in inhibiting or facilitating social
responsibility
o Even culture that isn’t discussed is important and can influence attitudes and
opinions, such as about social responsibility
- Whistle blowing doesn’t usually become a formal activity unless an employee can’t get
any satisfaction with the company

Small Businesses & Social Responsibility

- Owners face many of the same ethical & social responsibilities
- Sometimes they have ethical dilemmas that other places don’t
o Ex. a building inspector saying a cash payment would “expedite” application for a
building permit
o Ex. as a nightclub manager do you call police for fake ID.
- Sometimes small businesses can’t pursue CSR objectives
o Not enough money