Textbook- CH 5

• Ethics of business


  The rules, standards, codes, or principles that provide guidance for morally appropriate behaviour in managerial decision making relating to the operation of the corporation and business's relationship with society
• Levels of ethical assessment

  • Awareness of moral or ethical implications
  • Ethical implications assessed upon individual, organizational, economic efficiency, governmental, and societal influences
  • Decisions or actions based upon systematic analysis of outcomes, and benefits versus harms to stakeholders
• Influences on ethical behaviour

  • Influences of individuals
  • Corporate or organizational influences
  • Economic efficiency influences
  • Government and the legal system influences
  • Societal influences
• Value judgments


  Subjective evaluations of what is considered important and are based on how managers intuitively feel about the goodness or rightness of various goals
• Moral standards

  The means by which individuals judge their actions and the actions of others based upon accepted behaviour in society
• The Better Business Bureau's (BBB) mission is to be the leader in advancing marketplace trust
• One BBB value is integrity by being honest and ethical in all business activities
• Another BBB value is trust, and its standards for trust include: advertise honestly, tell the truth, be transparent, honour promises, be responsive, safeguard privacy, and embody integrity
• The capitalist economic system was discussed in Chapter 2 and the implications for the ethics of business were identified
• Economic efficiency


  The belief that it is necessary to maximize output as it is in society's interests to provide the essentials of food, clothing, and shelter
• Economic efficiency differs from self-interest in that business must operate within market constraints
• Government legislation does influence business decisions
• The legal system makes certain behaviour illegal, and most managers are sensitive to behaving within the law
• For many in business the law does represent the minimal moral standards
• The cultural traditions of a country or an ethnic group influence how managers view society and business practices especially for Canadian managers operating in a foreign country
• One test of ethical behaviour is whether the manager can defend the decision if it becomes known through the media
• Societal influences


  Members of society form social relationships with those of similar interests, customs, beliefs, or values
• Views of appropriate ethical behaviour

  May be influenced by dominant culture, political views, and economic status
• Stakeholders representing societal views

  • Volunteer organizations
  • Charitable organizations
  • Religious organizations
  • Service organizations
  • Fraternal organizations
  • Cultural organizations
  • Ethnic organizations
• Cultural traditions


  Influence how managers view society and business practices, especially for Canadian managers operating in a foreign country
• Test of ethical behaviour


  Whether the manager can defend the decision if it becomes known through the media
• NGOs (non-governmental organizations)


  Activist or advocacy groups in society that can have an impact on business decisions
• Ethical relativism


  The belief that ethical answers depend on the situation and no universal standards or rules exist to guide or evaluate morality
• Ethical relativism is considered a lazy way to approach ethics as it lacks a rigorous analysis of the circumstances and consequences
• Ethical relativism contradicts everyday behaviour where individuals seek differing views and opinions
• It is dangerous when individuals become moral absolutists, believing that they alone know what is acceptable in society
• Most influences on ethical behaviour are not based on any theoretical basis of ethical assessment
• The degree of assessment of ethical implications is most likely not complete or thorough when not based on a theoretical basis
• Value judgments


  Subjective evaluations of what managers think is important; based upon a manager's own values
• Moral standards


  Represent the expectations of society and the means by which managers judge their actions
• Ethical principles


  The fundamental rules by which moral standards and value judgments can be examined
• Self-interest ethic (ethical egoism)


  Individuals or corporations set their own standards for judging the ethical implications of their actions; only the individual's values and standards are the basis for actions
• Carried to the extreme, self-interest is not desirable as an ethic
• Egoism


  Excessive interest in oneself, ignoring completely the interests of others
• Altruism


  The goals are to account for and be sensitive to the interests of others to the point where their own interests are sacrificed or neglected
• Many people find no fault with reasonable, measured, and proportionate self-interest, as long as the interests of others are considered
• Personal virtues ethic


  An individual's or corporation's behaviour is based upon being a good person or corporate citizen with attitudes and character traits such as courage, honesty, wisdom, temperance, courage, fidelity, integrity, and generosity
• Managers and corporations must be honest, open, and truthful, and should be proud of their actions
• Standards of behaviour toward others reflect fair and courteous treatment of one another—or, in the case of business, the treatment of its stakeholders
• TV test or light of day test


  Managers should ask, "Would I feel comfortable explaining to a national television audience why a particular decision was made?"