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© Colin Boyd 2006IABC Ethics Presentation
A Simple Model of Analysis forEthical Decision-Making
byColin Boyd
Professor of ManagementUniversity of Saskatchewan
© Colin Boyd 2006IABC Ethics Presentation
Oxymorons
• Jumbo shrimp• Military intelligence• Postal service• Gourmet pizza
• Business ethics
© Colin Boyd 2006IABC Ethics Presentation
Where is the boundary between moralityand immorality in the quest for profits?
In 1988 the West German newspapers described the activities of
a particular businessman. He had been advertising in Pakistan for
healthy volunteers to donate one of their kidneys, and several had
already come to Germany for the donation operation. The
businessman paid the volunteers about $10,000, a large sum in
comparison to annual incomes in Pakistan. He also paid the
donors’ expenses, and the medical costs involved in the removal
of the kidney from each healthy donor. The businessman sold the
kidneys for around $30,000 each, for transplant into patients
attending a private medical clinic. All of these patients were
wealthy, and most were from Arabic countries.
© Colin Boyd 2006IABC Ethics Presentation
Social Consensus
The Law
Should the law be taken as the definition of right and wrong in guiding managers as to the morality of business conduct? If it is legal, then surely it can’t be wrong?
© Colin Boyd 2006IABC Ethics Presentation
Everything that is moral
Everything that is legal
All that is moral and legal at the
same time
Legal but immoral: discriminationagainst Jews in Nazi Germany
Moral but illegal: exceeding theSpeed limit in rural Saskatchewan
© Colin Boyd 2006IABC Ethics Presentation
You can't teach me ethics!
I learned all my values .....on my mother's knee
.....in kindergarten
.....at my church
You can move fromlower to higher levelsof moral reasoning
"daddy says it is wrong” - fear of punishment
"my friends won't like me" - peer pressure
"eating meat is wrong” - moral principles
© Colin Boyd 2006IABC Ethics Presentation
We spend very little time examining our core values
• ……and yet they seem to have a great influence on our daily lives……for example, how much
time and money do you spend each week related to your core
values regarding
PERSONAL HYGIENE ??
© Colin Boyd 2006IABC Ethics Presentation
Jane Smith, an old school friend, calls you on the phone to say that she is in town, staying at the Quality Inn for a night while on a business trip for Ajax Limited, her Halifax-based employer. She asks if you would like to get together and talk over old times. You meet in the hotel bar, and later decide to eat together in the hotel restaurant. When the bill comes you offer to pay your share, but Jane says no, she can charge the meal and drinks to her room. Ajax will pay, she says. She will pretend you were a business client.
Honesty: Dinner with Jane
© Colin Boyd 2006IABC Ethics Presentation
Jane later contacts you.....
1 to ask if you will give her a reference for a job
2 to ask for a reference for a job as a financial controller where she will be handling a lot of cash
3 to apply for a job as the financial controller of the company that you own
© Colin Boyd 2006IABC Ethics Presentation
the profits of the firm
the wellbeing of employees
customer satisfaction
paying suppliers on time
respect for the environment
In business, which comes first?
Which has priority?
What happens when you cannot satisfy these different
constituencies?
© Colin Boyd 2006IABC Ethics Presentation
ETHICSGreek - “proper conduct”
ETHNICpeople of one's own kinda community of shared values
ETHOSGreek - the essential character or
spirit of a person or organizationthe prevalent sentiment of a
community
© Colin Boyd 2006IABC Ethics Presentation
Ethical AnalysisOr
Moral Reasoning
•Stakeholder identification•End-point ethics, Utilitarianism•Human Rights•Justice or Rule-based ethics
© Colin Boyd 2006IABC Ethics Presentation
PRIMARY STAKEHOLDERS(those who have a direct economic stake in the welfare of the organization)
SHAREHOLDERS
COMPETITORS
CUSTOMERS
DISTRIBUTORS (WHOLESALERS,
RETAILERS)
CREDITORS
SUPPLIERS
EMPLOYEES (UNIONS)
MANAGERS
Buy products
Compete for customers
Distribute products
Sell raw materials
Provide labour
Provide admin skills
Lend cash
Invest capital
© Colin Boyd 2006IABC Ethics Presentation
SECONDARY STAKEHOLDERS
+future
stakeholders?future
generations?
THE GENERAL
PUBLIC
NEXT-DOOR NEIGHBOURS
THE LOCAL COMMUNITY
FEDERAL GOVERNMENT
THE MEDIA
LOCAL GOVERNMENT
BUSINESS LOBBY GROUPS
SOCIAL ACTIVIST GROUPS
…are affected not so much by the scale of the organization, but more by its existence. These
stakeholders are not inferior to primary stakeholders, but have a secondary type of relationship
© Colin Boyd 2006IABC Ethics Presentation
A Utilitarian Analysis
TotalBenefits
TotalHarms
Do the benefits exceed the harms?At the end-point, what is the balance?
© Colin Boyd 2006IABC Ethics Presentation
Alternative A Alternative B
Stakeholder #1
Stakeholder #2
Stakeholder #3
Stakeholder #4
Stakeholder #5
Do the total benefits exceed the total harms?
Net Outcomes
End-Point Ethics, or Utilitarianism
© Colin Boyd 2006IABC Ethics Presentation
The cost is $11 per car x 11 million Pintos
= $121 million
The benefit is the saving of 180 lives @ $200,000 per life
= $36 million
Utilitarianism in Action:The Ford Pinto
As the cost of $121 million outweighed the social benefit of $36 million, Ford concluded that improving the Pinto design would not be profitable for Ford, or for society in general. Ford managers decided to go ahead with production of the Pinto as designed.
© Colin Boyd 2006IABC Ethics Presentation
Global satelite positioning systems (GPS) can now be fitted to automobiles. When combined with data from a CD drive map of a local area, any car can know its own position to within a few meters. It can also know what the maximum speed limit is for that precise location
The UK Government is considering a recommendation for making automobiles automatically compliant with local speed limits – your car would not let you drive any faster than the local speed limit.
It is estimated that this simple measure would cut road deaths and injuries by around 60% per year. No one would be allowed to speed.
Automatic Vehicle Speed Control
© Colin Boyd 2006IABC Ethics Presentation
Are Human Rights Protected?
Basic Rights
LIBERTY RIGHTS
Things that I have that no one else should take from
me
WELFARE RIGHTS
Things that I do not have that someone else should give to
me
© Colin Boyd 2006IABC Ethics Presentation
Are Human Rights Protected?Basic Rights
LIBERTY
The duty not to remove rights, such as the right to:
Privacy
Free Speech
Free Consent
Freedom of Conscience
WELFARE
The duty to provide rights, such as the right to:
Employment
Housing
Food
Education
© Colin Boyd 2006IABC Ethics Presentation
Can your employer tell you how to vote?
Liberty Rights: The Right to Vote?
If an employee is seen advocating gay rights on TV at the weekend, is that relevant to the employer? Can a Christian employee try to convert fellow workers during work hours?
Liberty Rights: The Right to Free Speech?
Can an employer listen in on phone operators, reservations clerks? Watch you via video camera?
Liberty Rights: Do We Have a Right to Privacy?
© Colin Boyd 2006IABC Ethics Presentation
Timing Your Visits to the Washroom
Workers at the Gainers meat-packing plant in Edmonton lose their pay when they go on bathroom breaks. Company president Larry Harding said the “personal relief” program was instituted in January 1994 because management felt that employees were taking advantage of bathroom and phone privileges. Each of Gainers’ 850 employees must ask a supervisor for permission to leave work outside lunch or coffee breaks. The typical Gainers worker earns $12 an hour and is docked 60 cents for every minute he or she is absent. If the worker is away for more than 20 minutes a week, he or she is temporarily suspended.
Liberty Rights: Personal Time at Work?
© Colin Boyd 2006IABC Ethics Presentation
Welfare Rights: Do We Have a Right to a Job?
Loggers from North Vancouver Island protesting the creation of 23 new parks on Vancouver Island which threaten their right to their jobs
Coal miners in Sydney, N.S. argue against the closure of their mines
Welfare Rights: Do We Have a Right to an Education?
The USSU protesting that increased University of Saskatchewan tuition fees will prevent students from poor families from having access to secondary education. Everyone has a right to an education irrelevant of their economic background.
© Colin Boyd 2006IABC Ethics Presentation
Are Other Rights Protected?
• Future Generations• Stakeholders in Different Cultures• Animals• Plants• Ecological Systems• The Earth
© Colin Boyd 2006IABC Ethics Presentation
Late 20th Century Trends
• The evolution of rights issues• The collapse of paternalism (e.g. not
telling someone that they have
cancer – “it is best that Aunt Betty
not know…”)• The emergence of animal rights e.g.
the Body Shop, Cirque de Soleil,
attacks on animal transport in UK
© Colin Boyd 2006IABC Ethics Presentation
Justice or Rule Ethics
Are the harms and benefits fairly and justly distributed across the affected stakeholders?
Is it fair?
RAWL's THEORY of JUSTICE
If you were to design a system of distribution of the benefits and harms across the stakeholders without
knowing in advance which stakeholder you would be, then how would you want the harms and benefits to
be distributed?
© Colin Boyd 2006IABC Ethics Presentation
Justice or Rule Ethics
Test of Disclosure
How will the solution look if headlined in the newspaper?
Social Contract Ethics
Are the stakeholders willing partners, ready to swap positions with each other?
JANE FIDDLESHER EXPENSES
A B
© Colin Boyd 2006IABC Ethics Presentation
“Its just like money for nothing!” exclaimed Sally with a laugh as she put her glass back on the bar. “I can’t believe my luck. $15,000 for one day’s work, its just crazy!”. Sally was a consultant who writes computer software for accounting systems. She was celebrating after having received a contract to design a new system for a client who was under the impression that such a system takes about 2 months of design work to complete. Sally was jubilant; “They don’t know that I designed an identical system for one of their competitors only a few weeks ago. All I have to do is to dust off that package, change the client’s name, and that’s it. One day’s work at the most! Isn’t it great?”
Money for Nothing
© Colin Boyd 2006IABC Ethics Presentation
A Framework for Ethical Analysisof Business Decisions
Who are the affected stakeholders?
What are the outcomes for each stakeholderof the proposed solution to the problem?
© Colin Boyd 2006IABC Ethics Presentation
End Point Ethics
Do the totalbenefits exceedthe total harms?
Rights
Are humanrights
protected?
Rule Ethics
Are the harms andbenefits fairly andjustly distributed?
Test of Disclosure
How will the solutionlook if headlined
in the newspaper?
Social Contract Ethics
Are the stakeholderswilling partners, ready
to swap positionswith each other?