B E important P

Why is M
78
standards
Significant pressure on employees to compromise

Malpractice can inflict enormous harm

Huge power w in
society
More complex r challenging demands by stakeholders
Potential to provide contribution to society
Faces trust deficit

Large companies t BE
Priorities financial integrity employeecustomer issues

Approach in managing ethics

formal
PR system based
Responsible accountable to stakeholders shareholders

Main constraints shareholder orientation size complexity

Principles vs Values d
Principles used to develop values
widely accepted establish boundaries
cultures
accepted among
i
used to develop values
establish pervasive boundaries
i
valued across cultures
d
no
to choice
subjective t related to choice to develop norms
used
used to
develop norms to orgs
guidance
 I g g differ a
cultures
differs across cultures

Ethical Decision
Indu
Making
vs
Group
Individual factors

age gender nationality education

Ethical issues intensity
diff indu perceive ethical issues diff

sensity
perceived relevance importantance

Rationalizing unethical behavior

denial of responsibility arm is twisted
my
denial of was harmed
injury no one
really
denial of victim they deserved it
social weighting you have no
right to criticize

appeal to higher loyalties answered to a more imp

cause

metaphor of the ledger I work overtime I

can do personal things at work

Organizational factors
Corp culture t structure of indu relationships
beliefs
norms

goals
 shared way of solving problems
peers managers etc biggest influencers
of work group
a decision
orgs value greater influence on

thats his own values

Business Ethics
intentions
behavior
evaluations
Recognize the Need to chose an action
Normative considerations
institutions as the foundation for normative values

e gTransparency Int l
principle t core values
prevent bending the rules

principles
values enduring beliefs on conduct
Improve Ethical Decisions
use ethical decision making model
not a guide
provides insights knowledge on
typical
decision making process

Opportunity
conditions that provide rewards internal or external
 b
unethical
can be eliminated through policies rules
enforced by management
ethical rewarded

Ethicaldecisionmaking
Individual vs Organization
Individual factors

age gender nationality education perceive

Ethical Issues Intensity different indu act differently

to diff ethical issues

sensitivity to subject
importantance relevance

Rationalizing Unethical Behavior

Denial of responsibility arm is twisted
my
Denial of na'im no one
got hurt
Denial of victim they deserved it
Social have no to criticize
weighting you right
Appeal to higher we answered to a more imp
cause

Metaphor of ledger I work overtime I can do t

Organizational Factors
corporate culture t structure of indu relationships
norms values beliefs
goals shared way
 s
g i
Ethical culture or not peers managers
co workers biggest influence of group
solved
by following directives
organizations values greater influence on

indu decision that his own values

Business Ethics
Intentions
Behavior IBE

Evaluation
Recognize the Need to chose an Action
Normative Considerations
institutions as the foundation of normative
values
e
g Transparency Int
principles core values

prevent bending the rules

principles mainly justice
core values enduring beliefs abou

appropriate conduct
Improve Ethical Decisions
use ethical decision making model
not a guide for decision making

provides insights knowledge on

typical
decision making processes
 11 Y
conditions that provide rewards internal or external
or limit barriers to behavior
unethical
can be eliminated
through policies rules t

most
importantly enforced by management

imora.in ves
Deff set of principles to decide right from wrong

Objective
guidelines
conflict
resolving
optimizing mutual benefit win win

Philosophies
telogical consequentialist acts are
morally
egoism if desired result selfieftyerest
right they produce
right or acceptable actions are those
maximize a person's self interest as

defined by that person

e
g telemarketers on old ppl
preying
utilitarianism actions that maximize total utility
or the greatest
good for the greatest number of
people
preservation of individual rights
deontology
 behavior rather than consequences
e
g worker dies on manufacturing plan
company must modify production process
no matter what the cost
relativist evaluates ethical ness
subjectively
on the basis of individuals and group
experiences
accountant's to adiettise
e.g right
virtue ethics assumes what is moral in

a
given situation is not only what convential
morality requires but also what the mature
with a good moral character deems appropria
e
g aristotle loyalty courage wit
e
g virtues that support business
transactions
trust
loyalty truthfulness
fairness gratitude
fair treatment t due reward in
justice
accordance with ethical or
legal standards
1 distributive based on evalue of outcome
benefit derived equity in rewards
2 based the
procedural on
process
activities emphasizes decision making
opennefsticipation
processes level of access
3
 I

accuracy of info truthfulness respect

mom
sets of principles that determine right from wrong

Objective
guidelines
resolving conflict
benefit
optimizing mutal win win

Philosophies
teleological consequentialist act is morally right
if
they provide desired result self interest utility
action tha
right or acceptable are those
maximize a particular person's self
interest defined them
as
by
e g telemarketers preying on old ppl
utilitarinism actions that maximize total
utility
or thegreatest good for the greatest number
of people
deontology preservation of individual rights
on the intentions associated with behavior
rather than on the consequences
e a worker dies at manufacturing
g
 I n I I r 1
no matter the cost
relativist evaluates ethical ness
subjectively on
the basis of individual group experiences
account's right to advertise
e.g
virtue ethics assumes what is moral in
a
given situation is not only what convential
morality requires but also what a mature
person w good values would deem apropriate
e.g aristotle
loyalty wit
e.g virtues that support business transact
truth trust gratitude
Justice fair treatment t due reward associated
with ethical t
legal standards
1 Distributive based on the evaluation of outcom

derived benefits equity of rewards

2 Procedural based on the processes
activities emphasizes decision making model
level of access openness participation
3 Interactional based on relationships
treatment of others emphasizes
courtesy of respe
deal t
truthfulness accuracy

FIffibergismodet
 C g M I I
1 Punishment obedience
e
g forbidding buyers to accept gifts
companies
from salespeople
buyers use policy to refuse
buyer might accept if think no chance
of
being caught
2 Individual instrumental purpose exchange
e
g sales rep in a
foreign county t gift
defines right as what his
giving serves

own needs
3 Mutual interpersonal expectations relationships conformity
interest of others fairness is motive
4 Social system t conscience maintenance
e
g duty to society to protect privacy t
therefore refrain from monitoring employees
conversations
5 Prior social contract
rights or
utility
e president of a firm
g the establishes
an ethics program as it provides a buffer

against legal problems

6 Universal ethical principles
e business person discontinues a product
g
that has caused a death ble is
killing
regardlessofprofit
wrong
Reasons Indu use diff philosophies
in work vs
person
1 Goals pressures in the business arena are
motivated by profit it's not personal it's
business
environment values
2 corp culture t core

c.mn
1 Framing effect
2 Overvaluing outcomes
3 Status quo tendency
4 Self enhancement bias
5 Egocentric bias
6 Escalation of commitment

J.Omissionbias
Ethical Decision
Individual factors
Making
age gender nationality education
Ethical issues
intensity
diff people perceive react differently to ethical issues
 y d
g
importance relevance

Rationalizing unethical behavior

Denial of responsibility arm is twisted
my
Denial of no one hurt
injury got
Denial of victim they deserved it
Social weighting have no criticize us
you right to
Appeal to answered to more important
higher we a

Metaphor of ledger I work overtime okay

Organizational factors
corporate culture a structure of indu relationships
Corp culture beliefs values norms shared
value of
solving problem
ethical or notpeers managers etc are

influence of workplace solved

biggest by
following directives by superiors
orgs values greater influence on indu
that they value
Business Ethics

Behavior

Recognize the need to chose an action

Normative Considerations
institutions provide foundation for normative
 a
e
g Transparency Int l
Principles t core values prevent
bindings
Principles mainly justice
core values beliefs ab
enduring
appropriate conduct
Improve Ethical I isions
use of ethical decision making model
not guideline
a

provides insight knowledge on typical

decision making processes
Opportunity
conditions that provide rewards or limit barriers
to behavior
unethical
can be eliminated w
policies t rules t most

importantly implemented by management

rewarded
ethical
Normative considerations
institutions provide foundation for normativ
values
e
g Transparency Int l
principles t core values

prevent bending the rules

principles mainly justice

 appropriate for conduct
that indu use
orgs value norms

in their decision making

Improve Ethical Decisions
provide insight knowledge on typical
decision making processes
Opportunity
conditions that provide rewards or

more
of from
set principles to determine right wrong
Objective
guidelines
conflict
resolving
optimizing mutual benefit win win

Philosophies
teleological consequentialist act is morally right i
they provide desired result self interest or utility
d act such it
right or acceptable that maxs

a person's self interest determined by them

utilitarianism act maximizes total the
utility or

greatest good for the greatest number of

people
 d g
gy
intentions associated with behavior rather tha

consequences
e worker gets killed in
factory
g
fix production process no matter cost
relativist evaluate the ethicalness subjectivey
the basis of indu
on or
group experienc
accountant's to advertise
e
g right
virtue ethics whatmorally right in a
is

situation is not only conventionally morally

but also what mature
required a person
w good moral character would deem approp
Aristotle wit
e
g loyalty
Virtues that support business
transactions
truthful ess fairness
trust
learning
empathy
self control
civility
Justice fair treatment a due reward in accordant
with legal t ethical standards
1 Distributive based on the evaluation of outcome
derived benefits equity in rewards
2 Procedural based on the processes activities
 em
g 1
level of access participation t openness
3 Interactional based on relationship
the
treatment of others emphasizes
truthfuless of info respect'ittesy
accuracy
in
Kohlberg's Misdei 6 stages of

Cognitive Moral Development

1 Punishment Obedience
e
g company policy that buyers can't accept
gifts from salespeople
buyers use policy as reasoning
may accept if don't think get caught
2 Individual instrumental exchange t purpose
e
g business in foreign county t
gift exchange do whatever that is
in their best interest own needs
3 Mutually interpersonal expectation relationship conformity
treatment of others fairness motive
is

4 Social system conscience maintenance

moral right to protect privacy so as
company don't listen to employees
5 Prior rights social contract
utility
ethics program in place as buffer for legalprob
 I I
businessman discontinues product that
someone dies from ble killing wrong

moral ethical
Applying philosophy to
decision in work
individuals
making
diff work
use philosophies in vs person
1
pressures in business arena that profit is
focus it's not personal it's business
2 environment corporate culture score valued
aren't same as the indu

Common Cognitive Traps

effect
Framing
Overvaluing outcomes
Status quo tendency
Self enhancement bias
Escalation of commitment

Egocentric bias
Omission bias

in
Stakeholders Who are
they
customers
investors any person entity
influenced t have
 to affect
employees
the ability
business
suppliers
gov't agencies customers employees
suppliers shareholders
am
t agency common
9
character investors
rs
situation standford prison
awareness experiment
judgement
action
leadership character
on vs
situation
leadership
mandatesÉÉÉÉÉ eness
sarbanes act
oxley
practices in financial record keeping t

reporting for corporations

oversight board 2002 increase
oversight
Dodd Frank Wall street Reform
consumer Protection Act consumer
protection
2010 act
Ethical dilemma no right or
wrong
ethical issue clear
right or wrong order
creates t
compliance to identify
a specific for
primary necessary employees
commit
to
strives
secondary media conduct values
orientation
 values sha
Stakeholders matter
Why they
provide resource that's essential for long term success
of the firm
tangible intangible
taking away withdrawing resources provides them
power
primary stakeholders continued association is crucia
to survival
in
secondary not engaged business
transactions

7 Stages of Ethics
Auditing
1 Secure the commitment of the top manager
2 Establish a committee to oversee the process

Article Note on human behavior

situation vs character
Traditional view on character leadership
judgement
action
leadership
awareness
situations can lead the majority of people to
display
stand
 o

moral inaction
bystander
groupthink
views
contemporary
moral blind spots
judgement distorted emotions
by
Kohlberg's 6 stages Cognitive Moral
Development
1 Punishment obedience
2 Indu instrumental purpose t
exchange
3 Mutual interpersonal relationship expectation conformity
4 Social system conscience maitenance
5 Prior rights social construct or utility
6 Universal ethical principles

Federal for
sentencing Guidelines orgs
carrot a stick approach
companies that act to prevent misconduct
ethical compliance carrot
t
programs
to avoid penalties
companies that continuously tolerate
misconduct FS 60 encourages judge
to increase fines

vs
 I 9
Compliance Programs
order to
creates requires employees
commit to
identify w t aspecific conduct
Benefits teaches rules t
penalties for non
compliance
Limits cannot forsee all upcoming ethical
situations or shift in stakeholders
Values orientation program
strives to develop shared values
focus on abstract core ideals
Benefits positively influence workplace
defined basis to make decisions
clearly
Limits diversity in work place
Ethics Audit
regular complete r documentated measurements
of compliance w the companies published
policies procedures