Chapter 1

Chapter 1 - An Overview of Ethics 1

 Chapter 1 - Objectives
1. To understand ethics and why they are important in
ways that are consistent with a code of principles.
2. Understand why business ethics are becoming
increasingly important.
3. Identify what actions corporations are taking to
reduce business ethics risks.
4. Understand why corporations are interested in
fostering good business ethics.
5. Identify different approaches to ethical decision
making.
6. Discuss the risk of negative impact due to the
unethical use of information technology.
Chapter 1 - An Overview of Ethics 2
 Ethics Defined
• Moral codes are the rules that establish
the boundaries of generally accepted
behavior.
• Morality refers to social conventions
about right and wrong human conduct.
• Ethics are beliefs regarding right and
wrong behavior.
Chapter 1 - An Overview of Ethics 3
 Ethics Defined
• Virtues are habits that incline us to do
what is acceptable.
• Vices are habits that incline us to do what
is unacceptable.
• Value System is the complex scheme of
moral values that we choose to live by.

Chapter 1 - An Overview of Ethics 4

 The Importance of Integrity
• Integrity is used to refer to people who act in
ways that are consistent with their own code
of principles.
You often reflect on your principles when
you consider what you “ought” to do in
different situations.

Chapter 1 - An Overview of Ethics 5

 Ethics in the Business World
• Globalization of organizations has created
a complex business world.
• Risk is the likelihood of a negative event
times the impact of the event.

Chapter 1 - An Overview of Ethics 6

Why Business Ethics are Important
• Protect the organization and its employees
from legal action.
• Create an organization that operates
consistently.
• Produce good business.
• Avoid unfavorable publicity.
• Gain the goodwill of the community.
Chapter 1 - An Overview of Ethics 7
 Legal Overview
• Bribes involve providing money, property,
favors, or anything else of value to someone
in business or government in order to obtain
a business advantage.
• Gifts are made openly and publicly as a
gesture of friendship or goodwill with no
expectation of a future favor for the donor.

Chapter 1 - An Overview of Ethics 8

 Improving Corporate Ethics
• Appoint a corporate ethics officer.
• Ethical standards should be set by a board of directors.
• Establish a corporate code of conduct.
• Conduct social audits.
• Require employees to take ethics training.
• Include ethical criteria in employee appraisal/reward

systems.

Chapter 1 - An Overview of Ethics 9

 Code of Conduct
• A guide that highlights an organization’s key ethical issues
and identifies the overarching values and principles that
are important to the organization and that can help in
decision making.
• The code of conduct helps ensure that employees:
• Abide by the law.
• Follow necessary regulations.
• Behave in an ethical manner.

Chapter 1 - An Overview of Ethics 10

 Ethical Decision Making
1. Get the facts.
2. Identify the stakeholders and their positions.
3. Consider the consequences of your decision.
4. Weigh various guidelines and principles (Virtue,
Utilitarian, Fairness, Common Good).
5. Develop and evaluate options.
6. Review your decision.
7. Evaluate the results of your decision.

Chapter 1 - An Overview of Ethics 11

 Four Common Approaches Used in
Ethical Decision-Making
Approach to Dealing Principle
with Moral Issues

Virtue Approach The ethical choice is the one that best reflects
moral virtues in ourselves and our community.

Utilitarian Approach The ethical choice is the one that produces the
greatest excess of benefits over harm.

Fairness Approach The ethical choice is the one that treats everyone
the same and does not show favoritism or
discrimination.
Common Good The ethical choice is the one that advances the
Approach common good.
Chapter 1 - An Overview of Ethics 12
Table 1.5
 Ethics in Information Technology
• The increased use of information
technology has raised many ethical issues for
today’s IT professional.
• Licensing of IT professionals
• Internet communication
• Intellectual property
• Employee/employer issues

Chapter 1 - An Overview of Ethics 13

 Summary
• Ethics are beliefs regarding right and wrong behavior.
• Business ethics are becoming increasingly important because
the risks associated with inappropriate behavior have grown.
• Corporations are interested in fostering good business ethics:
1. Protect the company and employees from legal action.
2. Create an organization that operates consistently.
3. To produce good business.
4. To avoid negative publicity.
5. To gain the good will of the community.

Chapter 1 - An Overview of Ethics 14

 Summary
• Ethical decision making process:
1. Get the facts
2. Identify shareholders and their positions
3. Consider the consequences
4. Weigh guidelines and principles
5. Develop and evaluate options
6. Review your decision
7. Evaluate the results of your decision

• The growth of use in IT has also increased

the risk of unethical uses of IT.
Chapter 1 - An Overview of Ethics 15