Business Ethics and Sustainability Module

Lecture 1 – Introduction to Module

Dr Chris DoranMaxwell 328c.e.doran@salford.ac.uk

Business Ethics + Sustainability

TOPICS

Ethical Leadership

Global Ethics

Ethical Codes of Conduct

History of Business Ethics

Business Ethics Theory

Business Sustainability

Corporate Social Responsibility

Business and the Environment

Ethics and the Internet

Ethics in the Supply Chain

Future of Business Ethics and CSR

Student Charter Reminder

Chris’s Tips to get a good mark

• Attend all sessions• Be up to date with the news, what are the ethical

issues• Be innovative and creative• Read around, see further reading on BB• 3rd year is not easy – expectations are high• Think about application• Know about the themes of the Expo• Get involved ask and answer questions• The early bird …………….

Welcome to your Course

Lecture Breakdown:45 min, Break, then 45 min

WHAT IS ETHICS?

Definition of Ethics: “INQUIRY INTO THE NATURE AND

GROUNDS OF MORALITY WHERE THE TERM MORALITY IS TAKEN TO MEAN MORAL JUDGMENTS, STANDARDS AND RULES OF CONDUCT” (1)

Determining what is right and what is wrong

BY ITS NATURE, THE AREA OF BUSINESS ETHICS IS CONTROVERSIAL AND THERE IS NO WORLDWIDE ACCEPTED APPROACH

(1) BUSINESS ETHICS – ETHICAL DECISION MAKING AND CASES BY O C FERREL, JOHN FRAEDRICH AND LINDA FERRELL, SEVENTH EDITION, PUBLISHER: HOUGHTON MIFFLIN COMPANY, 2008.

What is ethics?

http://www.youtube.com/user/appliedethicscenter?feature=mhum#p/u/2/vmVu66Fpd9U

Business Ethics is the study of standards of business behaviour which promote human welfare and ‘the good’

"Ethics has to do with what my feelings tell me is right or wrong.""Ethics has to do with my religious beliefs.""Being ethical is doing what the law requires.""Ethics consists of the standards of behaviour our society accepts.""I don't know what the word means."

Michael Josephson, in Chapter 1 of Ethical Issues in the Practice of

Accounting, describes the “Ten Universal Values: “Honesty, integrity, promise keeping,

fidelity, fairness, caring, respect for others, responsible citizenship,

pursuit of excellence, and accountability.”

President

Lincoln said:

Honor is

better than

honors.

INDIVIDUALS AND ETHICAL ISSUES

SOURCE: “Top Items Employees Pilfer” Vault’s Office Survey 2006

A SURVEY OF NEARLY 25,000 STUDENTS REVEALED THE FOLLOWING:

62% ADMITTED CHEATING IN EXAMINATIONS AT LEAST ONCE

35% CONFESSED TO COPYING FROM THE INTERNET

27% ADMITTED SHOPLIFTING 23% OWNED UP TO CHEATING TO WIN IN SPORTS

IF TODAY'S STUDENTS ARE TOMORROW’S BUSINESS LEADERS….THEN IS IT LIKELY THAT THERE WILL BE A CORRELATION BETWEEN THEIR BEHAVIOUR TODAY AND THEIR BEHAVIOUR IN THE FUTURE?

(2) Michael Josephson, “The Biennial Report Card 2004

Business Ethics is nothing new

Some philosophers have argued that moral concepts are timeless, limited and unchanging, others emphasise that moral concepts change as social life changes (MacIntyre: 2009:1). This is supported by Loucks (1986) who has argued that business ethics dilemmas have been prevelant since 560 B.C. Loucks refers to the Greek thinker Chilon, who registered the opinion that “a merchant does better to take a loss than to make a dishonest profit.” (Loucks, 1986:2) His reasoning was that a loss may be painful for a while, but dishonesty hurts forever. This case identifies that although societal issues change the business ethics has always been prevalent in some form.

The reputation of a thousand years may be determined by the conduct of one hour.

Japanese proverb

The Role of Business Ethics Today

• Due to the internet the world demands organisations to be transparent.

• Spread of news means the world can quickly find out about behaviour.

• Competition increase means the public are more probable to give their £ to ethical corporations.

• It is no longer acceptable for organisations simply to make as much money as possible.

• Still difficult to depict what is right and wrong. Who is responsible for ethics. What society demands. The law. Codes of conduct and rise of Corporate Social Responsibility. (CSR)

• In recent years there have been several business scandals that caused serious damage to the credibility of the companies involved, occasionally the entire industry in which they operate, banking/oil.

Paradigms to Understand Our ValuesParadigms to Understand Our Values

THE WORD PARADIGM IS MORE COMMONLY USED TODAY TO MEAN:

MODEL, THEORY, PERCEPTION, ASSUMPTION OR FRAME OF REFERENCE

THE WAY WE “SEE” THE WORLD – NOT IN TERMS OF OUR VISUAL SENSE OF SIGHT, BUT IN TERMS OF PERCEIVING, UNDERSTANDING AND INTERPRETING

PARADIGMS ARE LIKE PERSONAL MENTAL MAPS REALITY? VALUES?

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What Shapes Our Own Ethics?

CULTURE CITIZENSHIP

AGE FRIENDS

SEX FAMILY

RELIGION MONEY

UPBRINGING STORIES

PARENTS ADVERTISING

TV NEWSPAPERS

BELIEFS THE INTERNET

RACE WORK

SEXUALITY THE NEWS

EXPERIENCE THE LAW

EDUCATION DISABILITIES

PARADIGM TEST

Say What you See

PARADIGMSPARADIGMS

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EXAMPLE: MAKING THE WRONG ASSUMPTIONS:

A DEPARTMENTAL STORE MANAGER HEARD ONE OF HIS SALESASSISTANTS SAY TO A CUSTOMER,

“NO WE HAVE NOT HAD ANY FOR SOME WEEKS NOW AND ITDOESN’T LOOK AS IF WE WILL BE GETTING ANY SOON”

THE MANAGER WAS SHOCKED AT THE SALES ASSISTANT’SCOMMENTS TO THE CUSTOMER. THE MANAGER CONFRONTEDTHE SALES ASSISTANT SAYING,

“NEVER, NEVER SAY WE DO NOT HAVE SOMETHING IN, IF WE DO NOT HAVE AN ITEM ,SAY THAT IT IS ON ORDER AND WILL BE IN THE STORE SHORTLY. NOW WHAT DID THE CUSTOMER WANT?”

“RAIN”, SAID THE SALES ASSISTANT

ACTIONS/ THE WAY WE MANAGE IS DIRECTLY RELATED TO OUR PARADIGMS

Whether we derive a code of ethics from religious beliefs, a

study of history and literature, or personal experience and

observation: We can all agree upon some basic values.

Sources of Ethical Norms

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Fellow Workers

Family

Friends

The Law

Regions of Country

Profession

Employer

Society at Large

Social Experiences

Religious Beliefs

The Individual

Conscience

Ethics and the Law

•Law often represents an ethical minimum

•Ethics often represents a standard that exceeds the legal minimum

Ethics Law

Frequent Overlap

ETHOS

EthosEthos is a Greek word originally meaning "accustomed place" Ethos forms the root of ethikos, meaning "moral, showing moral character". To the Greeks ancient and modern, the meaning is simply "the state of being", the inner source, the soul, the mind, and the original essence, that shapes and forms a person or animal. Late Latin borrowed it as ethicus, "moral philosophy") is the origin of the modern English word ethics

Ethos, according to The Oxford English Dictionary, is defined as "the characteristic spirit, prevalent tone of sentiment, of a people or community; the 'genius' of an institution or system", although it originally has its roots in the Greek word 'etho' or "to be accustomed to.“ However, the word ethos has been translated to contain many different meanings within the English language. One such definition in accordance with the opinion of S. Michael Halloran is that the concept of ethos listens to accepted standards, rather than what is more modernly thought of as character unique to a certain individual.

THE ETHICAL DILEMMA

FOR A BUSINESS TO SURVIVE IT MUST MAKE A PROFIT

IF PROFITS ARE ACHIEVED THROUGH MISCONDUCT THE BUSINESS IS LIKELY TO HAVE A SHORT EXISTENCE

COMPANIES SUCH AS ARTHUR ANDERSON, ENRON, WORLDCOM AND SUNBEAM MADE HEADLINES DUE TO WRONGDOING AND SCANDAL RESULTING IN LEGAL AND FINANCIAL REPERCUSSIONS

BUSINESSES NEED TO BALANCE THEIR DRIVE TOWARDS PROFITS AGAINST THE NEEDS AND DESIRES OF SOCIETY

Ethics doesn't give right answers

Ethics doesn't always show the right answer to moral problems.

Indeed more and more people think that for many ethical issues there isn't a single right answer - just a set of principles that can be applied to particular cases to give those involved some clear choices.

Some philosophers go further and say that all ethics can do is eliminate confusion and clarify the issues. After that it's up to each individual to come to their own conclusions.

Ethics can give several answers

Many people want there to be a single right answer to ethical questions. They find moral ambiguity hard to live with because they genuinely want to do the 'right' thing, and even if they can't work out what that right thing is, they like the idea that 'somewhere' there is one right answer.

But often there isn't one right answer - there may be several right answers, or just some least worst answers - and the individual must choose between them.

For others moral ambiguity is difficult because it forces them to take responsibility for their own choices and actions, rather than falling back on convenient rules and customs.

Differences between Business Ethics and Corporate Social Responsibility

Business Ethics CSR

Differences between ethics and CSR

Business Ethics CSR

The whole encompassing behaviour of businesses

CSR as an element business ethics

Business Ethics is the VERY broad field of study concerning good ethical decision-making in commercial contexts.

CSR is more narrowly about a company’s SOCIAL obligations…that is, a company’s obligations to society in general.

Business Ethics is concerned with not just social obligations, but also obligations to employees, customers, suppliers and competitors.

CSR is about the extent to which companies owe something to “society at large” (i.e., those who do not have a direct involvement with the business).

Business ethics is more about “good” or “bad” conduct according to moral standards

CSR : integrating economic, social and environmental targets in one strategy…

Terms are difficult to define and these inconsistences mean debate on the differences

Differences between business ethics and CSR

Difference between Business Ethics and Social Responsibility

Though business ethics and social responsibility seem to be overlapping, there has always been a contradiction between the two. Companies, though they are committed to be socially responsible for their behaviour have been found to be engaging in acts that cannot be called ethical.

What is good for the society is sometimes not good for the business, and what is good for the business is almost always not good for the society.

If the society is conscious, it responds in such a way that businesses are forced to behave responsibly. The same applies to the administration and the judiciary of any country.

Selling of liquor and tobacco in any society is not against business ethics though it may be against the principles of social responsibility. The same applies to lotteries and gambling. But it is certainly against business ethics as well as against social responsibility to entice minors to engage in smoking and drinking.

Some people claim that the two overlap interchange and even mean the same. Others claim they are in direct and stark contrast

Sustainability

We did not inherit this world from our parents, we borrowed it from our children.

One day we will return it to them. When we do, it should be every bit as bountiful as it was when we found it.

This is what sustainability means. (Ireland Pavilion, Milano Expo 2015)

Ethical Relatvism

Ethical relativism definition

In ethics, the belief that nothing is objectively right or wrong and that the definition of right or wrong depends on the prevailing view of a particular individual, culture, or historical period.

That there is no moral standard which is applicable to any one people or culture or time.

When in Rome do as the Romans do.

Ethical Absolutism

Ethical absolutism definition

It is the theory holding that morals, values, goodness or evil are absolute and are not changeable or dependent on other factors.

When in Rome, one should do what is right at Home no matter what you can get away with and regardless of what Romans do.

Seminar Session: Carrier Bags

The Trolley Dilemma

http://www.youtube.com/watch?v=6WB3Q5EF4Sg