Core Values – beliefs & principles, ultimate guide to

Intro to Business Ethics decision making

Core Ideology – commitment to ethics à good business
BUSINESS ETHICS (but not always true!)
- Rodriguez, 2009: study of morality & standards
- Hosmer, 1991: form of applied ethics that NATURE & GOAL OF ETHICS
examines ethical and moral problems that arise in I. Meaning:
a business envi a. moral science
- DesJardins, 2008: an academic discipline that not b. science of values
only studies standards, values & principles, but c. study of norms
also seeks to articulate & defend the ones that d. science of right conduct
ought to or should operate in business e. science of obligation
- the rights shape the obligation to the people f. general inquiry into what’s good
- good ethics = good/profitable business? II. Ethics viewed as important concern
o Enron, Lehman brothers, other scandals
o Success stories in “Built to Last” by Jim SOURCES OF ETHICS
Collins & Gerry Porras A. Culture
o Pro-Smoking Values of Philip Morris o defines behavior as acceptable/unacceptable
o Malden Mills Case B. Religion
- Ethics: important corporate concern o manifestation of divine
- major concern: what should the manager do in C. Law
situations? o guides human behavior w/in social fabric
o done because moral
WHY STUDY BUSINESS ETHICS
a. to prevent business from spiraling down like Enron, GOALS OF BUSINESS ETHICS
Arthur Andersen, Countryside Financial, 1. to describe, examine & evaluate ethical issues
Washington Mutual, Lehman Brothers from business settings
b. to prevent dishonest & fraudulent acts like 2. to focus on cognitive & intellectual aspects >
WorldCom, Tyco, Adelpha, Global Crossing, behavioral aspects
Health South, Quest, Merrill Lynch 3. to engage learners in active process of thinking &
c. to protect investors questioning
d. to remain sceptic
e. auditors: have the capabilities to manipulate THE FUNDAMENTAL QUESTIONS IN BUS. ETHICS
A. Individual Sense
SARBANES-OXLEY ACT o How should we live our lives? à Morality à
- Code of Ethics for Senior Financial Officers, rules & regulations that help us decide what to
requires to have a code of ethics applicable to its do & examining the character traits or virtues
principal financial officer and comptroller or for life to be worth living
principal accounting officer B. Collective Sense
- must include standards that promote: o Hoe should the society be structured? How
1. honest & ethical conduct (personal interest should we live together in a community? à
2. full, fair, accurate, timely standards Social Ethics à Public policy, law, civic virtue,
3. compliance w gov’t rules & regulations (also political philosophy
applies for American companies operating in the or
another country) MODEL FOR ETHICAL BUSINESS DECISION MAKING
1. Know facts
CORE VALUES 2. Identify ethical issues
- the essential & enduring tenets that help define the 3. Identify who will be affected
company 4. Alternative courses of action
- not compromised for financial gain or short-term 5. Determine public reaction
expediency (convenience) Bellomo, 2005: Vast majority of business owners are
- defines a company pretty good people who care about their employees,
their customers, and profits. Balancing these can be
VALUES & ETHICS difficult.

SUMMARY
Core
Core Clear • Key to becoming more ethical & promote an ethical
Values
Ideology Corporate institution is to develop the intellectual capacities:
Purpose 1. better understanding of ethical issues
Culture
2. a finely tuned analytical skills
3. refined moral or ethical sensitivity
 - main concern: how humans can live together
Chapter 2 in peace and avoid danger and fear of civil
conflict
VIRTUE-BASED ETHICS 2. David Hume (1711-1776)
• Virtues: motivations that lead us to a meaningful & - known for: philosophical empiricism &
happy life skepticism
• Vices: motivations that lead us to unhappiness 3. Adam Smith (1723-1790)
• developing virtues w/in an indiv is a long process - economics
• some possess virtue of modesty, self-control, 4. Jeremy Bentham (1748-1832)
unselfishness, humility - known for: utilitarianism
• seeks a full & detailed description of charac traits/ - happiness – pleasure, absence of pain
virtues, that would constitute good & full human life unhappiness – pain, deprivation of pleasure
• Egoism: act based on self-interest - Nature has places mankind under pain &
pleasure. It is for them alone to point what
• Self Interest: self-regarding motiv
we ought to do and what to do.
Altruism: other regarding motiv
5. John Stuart Mill (1806-1873)
- known for: logic, economics, utilitarianism,
KANTIAN PHILOSOPHY
principles of political econ
Dignity Respect Capable of living an
- happiness – ultimate good
autonomous life
- Human happiness is not mere hedonism.
accepted Humans are capable of enjoying happy
Act Maxims
& acted on experiences.
- Humans experience social & intellectual
Categorical Imperative of Immanuel Kant
pleasures that are different & superior to
1. Treat people as ends & never as means
mere feelings.
2. Treat people as subjects, not as objects
- writings: liberal democracy & liberal educ
- Society must be structured where happiness
PRINCILE-BASED ETHICS
is maximized for greater number of people.
• correct path determined not by consequences but
• implications for business & econ
by principles/duties
a. free market econ (allows indiv to decide wants
• obli, commitments, responsibilities
& bargain) à consumer demand à happiness
• ends don’t justify the means! b. free market econ à supply goods à scarcity
• have deep commitment to human dignity & indivs & compet
have rights not used as means to overall good o free market econ: version of utilitarianism,
max satisfaction of presence through
UTILITARIAN & BUSINESS POLICY structuring econ
• Utilitarianism
- social philosophy offering criteria by w/c the CHALLENGES TO UTILITARIANISM
basic structure of social institutions such as • Probs w/in
business & economy ought to be determined o must find defensible way to measure
- an action that looks at consequences happiness
- identified w the policy of maximizing overall o define good & implications for human freedom
good – “the greatest good for the greatest • Probs that challenge plausibility of unitil. proj.
number” o denies “the end does not justify the means”
- a consequentialist ethics
- where do we draw the line between rights & ETHICAL RELATIVISM
wants? we don’t claim rights by simply
• ethical values & judgments are dependent upon
wanting badly
culture, society & personal feelings
• General Policy Patterns of Utilitarianism
• ethical judgments = personal opinion
- Version 1: there are experts who can predict
• if 2 opinions differ, no legit way to decide between
the outcome of various policies that will
attain our end • serious challenge to ethics!
- Version 2: best means to attain utilitarian • ex: child labor, sexual harasment moral/immoral?
goals is through competitive markets
1. deregulation of industry CATEGORIES THAT SUPPORT AIG EXECUTIVES
2. protection of prop rights - reasons as to consequence
3. allows free exchanges à not motivated to perform well
4. encourage compet à not produce beneficial conseq
- reasons as to principles
UTILITARIAN ETHICS à not break contractual promise, unpopular results
1. Thomas Hobbes (1588-1679) à not benefit frm harms
- best known: political thought - reasons as to personal character
à accepting bonuses: greedy/distasteful
à paying bonus in the face of public criticism