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Business Ethics Fundamentals

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Ethical Dilemma

Ethics

Law

grey area

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Asking Key Questions

1. What are my core values and beliefs?2. What are the core values and beliefs of my

organization?3. Whose values, beliefs and interests may be at

risk in this decision, and Why?4. Who will be harmed or helped by my decision

or the decision of the organization?5. How will I, and my organization be affected by

the decision?

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Why use Ethical reasoning in business?

1. Many times laws do not cover all aspects or “grey areas” of a problem– EXAMPLES

2. Free-market and regulated-market mechanisms do not inform owners/ managers how to respond to far reaching ethical consequences.– EXAMPLES

3. Many complex moral problems require an “intuitive/ learned understanding of fairness, justice to the community.– EXAMPLES

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Inventory of Ethical Issues in Business

• Employer-Employee Relations• Company-Customer Relations• Company-Shareholder Relations• Company-Community/Public Interest

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Business Ethics: What Does It Really Mean?E

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Ethical Problem

Ethical Problem

Society’s Expectations of Business Ethics

Actual Business Ethics

1950s Early 2000sTime

Business Ethics:Today vs. Earlier Period

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Business Ethics: What Does It Really Mean?

Definitions• Ethics involves a discipline that examines good

or bad practices within the context of a moral duty

• Moral conduct is behavior that is right or wrong

• Business ethics include practices and behaviors that are good or bad

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Business Ethics: What Does It Really Mean?

Two Key Branches of Ethics• Descriptive ethics – How people behave and what sort of moral

standards they claim to follow. “What is” true and factual.

• Normative ethics involves supplying and justifying moral systems– “What should be”

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Conventional Approach to Business Ethics

• Conventional approach to business ethics involves a comparison of a decision or practice to prevailing societal norms– Pitfall: ethical relativism

Decision or Practice Prevailing Norms

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Sources of Ethical Norms

Fellow Workers

Family

Friends

The Law

Regions of Country

Profession

Employer

Society at Large

Fellow Workers

Religious Beliefs

The Individual

Conscience

Ethics, Economics, and Law

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Four Important Ethical Questions

• What is?• What ought to be?• How do we get from what is to what ought to

be?• What is our motivation for acting ethically?

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3 Models of Management Ethics

1. Immoral Management—A style devoid of ethical principles and active opposition to what is ethical.

2. Moral Management—Conforms to high standards of ethical behavior.

3. Amoral Management– Intentional - does not consider ethical factors– Unintentional - casual or careless about ethical

considerations in business

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3 Models of Management Ethics

Three Types Of Management Ethics

Three Approaches to Management Ethics

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Moral Management Models and Acceptable Stakeholder Thinking

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Developing Moral Judgment

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Developing Moral Judgment

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Developing Moral Judgment

External Sources of a Manager’s Values

• Religious values• Philosophical values• Cultural values• Legal values• Professional values

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Developing Moral Judgment

Internal Sources of a Manager’s Values• Respect for the authority structure• Loyalty• Conformity• Performance• Results

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Elements of Moral Judgment

• Moral imagination• Moral identification and ordering• Moral evaluation• Tolerance of moral disagreement and

ambiguity• Integration of managerial and moral

competence• A sense of moral obligation