Business ethics fundamentals From Buchholtz and Carroll chapter 7

• Is nowhere safe? Is everyone a hypocrite or liar? • Are all standards, and examples corrupt? • Enron ,WorldCom, Arthur Andersen Parmalat …. • Racial discrimination and sexual harassment.

Texaco and cost of $196 million settlement for racial discrimination on equal pay.

• Recent pressure on the Catholic church, BP in the Gulf of Mexico… the Pakistan cricket betting allegations– inappropriate unethical behaviour and responses.

• Universities under attack from plagiarism.

Public view of business ethics

• Business ethics as contradiction• ‘Only a fine line between a business

executive and a crook’ page 237• Trust gap for businesses even after Enron. • Corrupt executives who kept own wealth

and broke companies and put employees out of work

• Greed for money and power : weakening of personal values

• Executives can be ethical and successful• Media financial press do not protect public.

Any ethical lapse in a company erodes its culture

• Society is seeking (2000s) new emphasis on values, morals, ethics

• Has business ethics really deteriorated? Measurement?

• But media do report ethical problems more

• Is society actually changing? Unethical practices were once seen as ethical. Examples?

• Ethics =good and bad, moral duty and obligation

• Morality very similar to ethics = fairness and justice and the difficult question of equity

• Business ethics. In business context

3 major approaches to Business Ethics

• Conventional : how normal society views business ethics – this chapter

• Principles : use of principles or guidelines to direct behaviour actions and policies chapter 8 for this and tests approaches

• Ethical tests: short questions to guide ethical decision making

Conventional approaches/ prevailing norms of acceptability

• Bases are family, friends, religious beliefs the local community, region of country (but is this too American?) one’s employer, law the profession, etc

• Conscience: but is that erratic? Advertising as deceitful? What are acceptable conventions?

• Clash of norms: norms from culture and society against norms derived from employment law and business ethics (example is sexual innuendo)

Ethics and the law

• Ethics at a higher level to law, but overlap

• Law as minimum standards of conduct and behaviour but law is codified ethics page 246.

• Difference between letter and spirit of law. Example is Enron. Also Hewlett Packard which used questionable legal means to gather leaked information from board members.

• Law does not address all ethical questions.

• Issue of illegal behaviour by companies.

• Why do they do it?

• What are the consequences?

• Case for next slide . ‘You should not steal someone else’s property’. Paper clips, use of company phones? Consensus in principle not practice??

Making ethical judgements

• Stage 1. Decision action or practice

• Stage 2. Compare the practice with prevailing norms of acceptability

• Stage 3. Come to ethical (value) judgements, different personal interpretations.

• Working out stage 2 is very hard

• Danger of ethical relativism: pick and choose source of norms.

4 ethical questions =(tough central issues)

• What is? Real situation is hard to find..

• What ought to be? Rightness fairness or justice of a situation. What should mgt do?

• From what is to what ought to be: practical question for management.. What do we intend to accomplish? What circumstances permit us to accomplish? What are we able to accomplish?

• Motivation for being ethical? Manipulative or selfish

3 models of management ethics

• 1 Immoral management : no principles implied opposition to ethics

• 2 moral management : includes professionalism , view of the law.

• 3 Amoral management: company excludes moral considerations as irrelevant or is too casual about morality

Kohlberg and Gilligan

• Level 1 Preconventional

• Level 2 Conventional level

• Level 3 Postconventional, autonomous or principled level.

• Men deal with ethics in terms that are impersonal ,impartial , abstract.

• Challenged by Gilligan with her view that women value relationship maintenance and hurt avoidance

BBC Radio 4 Integrity test

• Use this link to find out your integrity score as set up by the Essex Centre for the Study of Integrity:

• http://news.bbc.co.uk/today/hi/today/newsid_9685000/9685729.stm

Situations: your views?

• Deloitte and Touche USA 2007 Ethics and the workplace survey

• Stealing petty cash

• Cheating on expenses

• Taking credit for another person’s accomplishments

• Lying on time sheets

• Coming into work hungover

• Telling a demeaning (racist) joke

• Taking office supplies for personal use

• Immoral management:

• Showing preferential treatment towards certain employees

• Rewarding employees who display wrong behaviour

• Harassing a fellow employee (verbally sexually racially)