Emerging Business Ethics Issues

Business Ethics - BBA

 Ethical Dilemma

• Aker & Aker case

• Bristol Mayer Squibb case

Business Ethics - BBA

 Understanding Ethical Issues

• An ethical Issue is a problem or opportunity that

requires an individual or group to choose among
actions that are ethical or unethical
• An ethical dilemma is a problem, situation, or
opportunity that requires an individual or group to
choose among several wrong or unethical actions

Business Ethics - BBA

 Stakeholders Define Ethical Issues

• Stakeholders are the parties getting influenced by

the business
• These parties want to have influence on the business
as well

Business Ethics - BBA

 Identifying Stakeholders
• Primary stakeholders
– Customers
– Employees
– Shareholders
– Suppliers
– Community
– Government & regulatory agencies
• Secondary stake holders
– Special interest groups
– Mass media
– Trade associations
– Competition

Business Ethics - BBA

Stakeholder groups and issues
Employees
1. Compensation & benefit
2. Training & development
3. Employee diversity
4. Occupational health and safety
5. Communication with management
6. Sexual harassment
Business Ethics - BBA
Indicators of impact on the stakeholders
Ratio of lowest wage to minimum wage
and local standard of living
Changes in average years of training for
employees
Percentage of employees from different
races and genders
Standard injury rates and safety measures
Availability of open-door policy
Definition & reporting
Stakeholder groups and issues
Customers
1. Product safety & quality
2. Management of customer complaints
3. Services to disabled
Indicators of impact on the stakeholders
Quality control standard and product
recalls
Number of complaints, procedure to
answer and resolution
Availability and nature of measures taken
to ensure availability to disabled

Business Ethics - BBA

Stakeholder groups and issues Indicators of impact on the stakeholders
Investors
1. Transparency of shareholder Procedures to inform shareholders about
communications company activities
2. Shareholder rights Frequency and type of litigation involving
shareholders

Business Ethics - BBA

Stakeholder groups and issues
Suppliers
1. Encouraging suppliers in developing
areas
2. Encouraging minority suppliers
3. Fair practices in dealing with suppliers
Indicators of impact on the stakeholders
Prices and information offered to
suppliers in developing areas
Percentage of minority suppliers
Providing correct information,
transparency in ordering and payment
terms

Business Ethics - BBA

Stakeholder groups and issues
Community
1. Public health and safety protection
2. Conservation of energy and materials
3. Donations and support of local
organizations
Indicators of impact on the stakeholders
Availability of emergency response plan,
waste disposal procedures
Data on reduction of waste
Annual and time and money spent on
community work

Business Ethics - BBA

Stakeholder groups and issues
Environmental groups
1. Minimizing the use of energy
2. Minimizing adverse environmental
effects of goods and services
3. Minimizing emission and waste
Indicators of impact on the stakeholders
Amount of power consumed, portion of
green energy
Percentage of product weight reclaimed
after use
Type amount and designation of waste
generated

Business Ethics - BBA

 Specific Types of Observed Misconduct
• Company resource abuse
• Abusive behavior
• Lying to employees
• Email or internet abuse
• Conflict of interest
• Discrimination
• Lying to stakeholders
• Employee benefit violation
• Employee privacy breach
• Improper hiring practices
• Falsifying time or expenses
• Poor product quality
• Stealing

Business Ethics - BBA

Ethical Issues

Business Ethics - BBA

 Honesty
• Honesty: Truthfulness or trustworthiness
• Dishonesty: A lack in integrity, incomplete
disclosure, or an unwillingness to tell the truth
– Issues related to honest can arise when people begin to
perceive business as something that has its own rules

Business Ethics - BBA

 Fairness & Integrity
• Fairness: The quality of being just, equitable, and
impartial
– Equality: How wealth or income is distributed
– Reciprocity: Occurs when an action that has a positive effect upon
someone else is reciprocated
– Optimization: The tradeoff between equity & efficiency
• Integrity: One of the most important term regarding
virtue. It means uncompromising adherence to
ethical values

Business Ethics - BBA

 Abusive or Intimidating
Behavior
• Can mean anything from physical threats, false
accusations, profanity, insults, harshness, ignoring
someone, or even unreasonableness
– Intent is important in determining abuse
• Bullying is a growing problem in workplace

Business Ethics - BBA

 Lying
• Joking without malice
• Commission lying: creating a fasle perception by
choosing words that intentionally deceive the
receiver
– Creating noise
• Omission lying: intentionally not informing channel
members of problems, related to product that
affects awareness, intention, or behavior

Business Ethics - BBA

 Conflict of Interest
• Exist when an individual must choose whether to
advance his or her own personal interests, those of
the organization, or some other group
– Individual must separate personal interests from business
dealings

Business Ethics - BBA

 Bribery
• Practice of offering something in order to gain an
illicit advantage
• Different types of bribery
– Active bribery
– Passive bribery
• Facilitation payments

Business Ethics - BBA

 Corporate Intelligence
• Collection and analysis of information on:
– Markets
– Technologies
– Customers and competitors
– Socioeconomic and external political trends
• Hacking
• Dumpster diving
• Phone eavesdropping

Business Ethics - BBA

 Discrimination
• Refusing to hire an individual for discriminatory
reasons
• Unreasonable exclusion of an individual from
employment
• Unreasonable discharge an employee
• Discriminate against an individual with respect to
hiring, employment terms, promotion, or privileges

Business Ethics - BBA

 Sexual Harassment
• A repeated, unwanted behavior of a sexual
nature perpetrated upon one individual by
another
• Hostile work environment
– The conduct is unwelcome
– The conduct is severe, pervasive, and regarded by the
claimant as so hostile or offensive as to alter conditions of
employment
– The conduct is such that a reasonable person would find it
hostile or offensive

Business Ethics - BBA

 Dual Relationship
• Dual relationship: A personal, loving, and/or
sexual relationship with someone with whom
you share professional responsibilities
• Unethical dual relationship: The relationship causes a conflict
of interest or impairment of professional judgment

Business Ethics - BBA

 Environmental Issues
• Recycling
• Buying renewable energy
• Using greener transportation
• Selecting minimal packaging
• Kyoto protocol
• Water pollution

Business Ethics - BBA

 Fraud
• Any purposeful communication that deceives, manipulates, or
conceals facts in order to create a false impression
• Accounting Fraud
• Marketing Fraud
– Puffery
– Implied falsity
– Literally false
• Consumer Fraud
– Collusion: an employee who helps a consumer commit fraud
– Duplicity involves a consumer duping a store
– Guile is associated with the person who uses tricks to obtain an unfair advantage

Business Ethics - BBA

 Financial Misconduct
• Illegal insider trading
• Rewarding risk

Business Ethics - BBA

 Intellectual Property Rights
• Employee use of technology
• Consumer privacy

Business Ethics - BBA