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The study of moral principles or values that determine whether actions are right or wrong and outcomes are good or bad. |
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Term
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(often called morality) refers to our efforts to figure out what we should do and how we should live. Specifically, it involves the challenge of figuring out how to justify our behavior – both to ourselves and to others (in business, e.g. to shareholders, employees, and the public) |
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| Corporate Social Responsibility (CSR) aka Sustainability |
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The way a corporation achieves a balance among its economic, social, and environmental responsibilities in its operations so as to address shareholder and other stakeholder expectations. – Robert W. Sexty |
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| Our efforts to figure out: what we should do and how we should live; how to justify our behavior |
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1.Deontology – looks at the actions or “means” people use to achieve their goals (does an action)
2.Character (Virtue) Ethics – looks at the agents or “persons” who are acting in the situation (person/agent)
3.Consequentialism (Utilitarianism) – looks at the ends or “goals” that are outcomes of actions (end result) |
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| deon - duty or obligation to follow standards; evaluates actions based on standards of right and wrong |
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| Agents (Character/Virtue Ethics) |
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A person of good character demonstrates virtues i.e. fairness, trustworthiness, courage
This person has integrity – high moral standards and the strength to act according to his beliefs |
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Focuses on the end result or consequences produced by an action
An action which creates more good than bad in terms of achieving our goals is considered good
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| Utilitarianism (a branch of consequentialism) |
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| seeks to create the most favourable balance of benefit over harm |
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| a society needs shared moral standards |
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| to keep people safe and to allow for free expression |
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| firms need shared moral standards |
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| to support conditions of efficient trade, to create a productive work environment |
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| 5 core principles of standards of conduct |
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1.Beneficence – People should provide help to others
2.Nonmaleficence – People should avoid causing harm to others
3.Autonomy – People should be free to make their own choices
4.Justice – People ought to give others what they are due and operate with fairness
5.Responsibility – People have certain expectations of themselves, which they expect in return from others |
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| tests for ethical decisions |
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decision guides: standards, character, goals/purpose
did i use fair process?
consistent with laws & values of firm?
tests publicity, reversibility, generalizability |
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| asks whether someone adversly affected could endorse the reasons for the decision |
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| raises the issue of consistency by asking whether you could defend your decision using the same reasoning in similar cases |
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| could you defend your choice if it was made public? |
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| Barriers to Ethical Decision Making |
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Personal - narrow self-interest, stunted moral development, rationalization, distancing from responsibility
interpersonal & organizational - external pressure, authority, tunnel vision, communication breakdown |
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| Kohlberg's Six Stages of Moral Development |
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1. punishment and obedience
2. individual instrumental purpose & exchange
3. mutual interpersonal expectations, relationships, & conformity
4. universal ethical principles
5. prior rights, social contract, or utility
6. law and order orienation |
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Preconventional Stages “Self-Centered”
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Stage 1:Children are obedient because they are afraid of beingpunished or want to be rewarded - punishment and obedience
Stage 2: A person determines what is right by the action that gets his/her needs met - individual instrumental purpose and exchange |
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Conventional Stages
“Social-Centered” |
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Stage 3: “Good” behaviour is defined as living up to the expectations of others - mutual interpersonal expectations, relationships, & conformity
Stage 4: People determine what is right by considering their duty to society at large - law and order orientation |
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Postconventional Stages
“Ethics-Centered”
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Stage 5: Upholding the basic rights, values, and legal contracts of society - prior rights, social contract, or utility
Stage 6: Right actions are determined by universal ethical principles i.e. justice, societal welfare, equality, respect for human dignity - universal ethical principles |
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| Forces Affecting Decision Making In Organizations |
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| authority, commuication breakdowns, distancing from responsibility, tunnel vision, rationalization, external pressure |
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| the answer to any ethical problem is relative, whether to the individual, the group, or the culture. There is no answer to questions of values, so any answer is as good as the next. |
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| what is right is fixed and is based on my (or my culture's) values and that dictates correct behavior regardless of where I am |
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| the idea that what is right is based oneahc individual's values and that we should make our decisions based on our values and not question the values used by others. |
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| the idea that what is right is dictated by our role in an organization (ex: follow orders at work) |
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| the idea that what is right is determined by what is being done by prominent groups within society (ex: if other companies are hiring child workers and it's accepted, we can do it too) |
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provides a set of 10 principles that govern how to conduct business:
Human Rights
1. support & respect the protection of internationally proclaimed human rights
2. make sure businesses aren't complicit in human rights abuses
Labor Standards
3. uphold the freedomof association & the effective recognition of the right to collective bargaining
4. the elimination of all forms of forced & compulsory labor
5. the effective abolition of child labor
6. the elimination of discrimination in respect of employment & occupation
Environment
7. support a precautionary approach to environmental challenges
8. undertake initiatives to promote greater environmental responsibility
9. encourage the development & diffusion of environmentally friendly technologies
Anti-Corruption
10. businesses should work against all forms of corruption, including extortion & bribery
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| Four Major Trends in Business |
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economic deregulation
political liberalization
environmental stewardship
advances in IT |
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| managerial view of business |
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shareholders are the center of business; change only happens when shareholders are unhappy
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| stakeholder approach to business |
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business is a set of relationships among groups that have a stake (vested interest) in the activities of the business
shareholders are only one of many stakeholders |
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most business decisions, or statements about business, have some implicit ethical view
most ethical decisions, or statements about ethics, have some implicit view about business |
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It makes no sense to talk about business without talking about ethics
It makes no sense to talk about ethics without talking about business
It makes no sense to talk about ethics or business without talking about human beings |
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ethics is not a choice
business ethics involves taking business seriously
ethics requires commitment
firms have to manage across all three levels of the framework
there is no "one size fits all" |
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| the responsibility principle |
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| most people, most of the time, want to and do accept responsibility for the effects of their actions on others |
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| definitional stakeholders |
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| customers, suppliers, employees, investors |
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| instrumental stakeholders |
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| public, local community, government, media |
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| stakeholder management is about |
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- making products and services that do what you say they are going to do
- doing business with suppliers who want to make you better
- having employees who are engaged in their work
- being good citizens in the community
- maximizing profits in the long run
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| 3 levels of stakeholder framework |
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respect, societal standards
stakeholder cooperation
values/goals of firm |
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