Ethics

• Ethics


  Rational justification for our moral judgments; it studies what is morally right or wrong, just or unjust
• Ethics


  Reflects on human beings and their interaction with nature and with other humans, on freedom, on responsibility and on justice
• Consequence


  A result or effect of an action or condition
• Consequence


  Phenomenon that follows and is caused by some previous phenomenon
• Ethics


  Establishes the levels of honesty, empathy, trustworthiness, and other virtues by which we hope to identify our personal behavior and our public reputation
• Ethics in personal life

  Sets norms for the ways in which we interact with family and friends
• Ethics in professional life

  Guides our interactions with customers, clients, colleagues, employees, and shareholders affected by our business practices
• Being a Professional of Integrity

  Engaging in a philosophical dialogue with yourself to establish the standards of behavior you choose to uphold
• Acting with Integrity


  Practice what you preach, walk the talk, do what you believe is right based upon reason
• Stakeholders


  • Competitors
  • Clients
  • Customers
  • Community
  • Suppliers
  • Environment
  • Government
  • Media
  • Employees
  • Retailers
  • Investors
• Business ethics


  A form of applied ethics or professional ethics that examines ethical principles and moral or ethical problems that can arise in a business environment
• Concepts in business ethics


  • Trust
  • Principle
  • Reliability
  • Responsibility
  • Morality
  • Choice
  • Relationship
  • Behavior
• Normative ethical theories


  Branch of moral philosophy, or ethics, concerned with criteria of what is morally right and wrong
• Descriptive ethics


  The study of how people do behave and how they think they should behave
• Ends, means, and character in business

  Three normative approaches to evaluating the ethics of business decisions
• Short-term perspective


  Focuses on immediate goals and results, often within a year
• Long-term perspective


  Requires a broader strategy and focuses on goals to be met within four to five years, considers the sustainability of business practices and the long-term impact of decisions
• Stockholder


  An individual or institution that owns a share of a public company's equity
• Stakeholder


  Interested in a company's performance for reasons other than stock performance or appreciation, includes employees, customers, suppliers, and the community
• Ethical behavior in business can lead to increased goodwill and, ultimately, profit
• Companies that adhere to ethical standards are more likely to gain trust and support
• Companies that engage in Corporate Social Responsibility (CSR) initiatives often see a positive impact on their profitability
• Ethical relativism


  A philosophy according to which there is no right or wrong and what is ethical depends solely on the context
• Business ethics


  The moral principles, policies, and values that govern the way companies and individuals engage in business activity
• The concept of business ethics began in the 1960s as corporations became more aware of a rising consumer-based society that showed concerns regarding the environment, social causes, and corporate responsibility
• Principles of business ethics

  • Leadership
  • Accountability
  • Integrity
  • Respect for others
  • Honesty
  • Respect for laws
  • Responsibility
  • Transparency
  • Compassion
  • Fairness
  • Loyalty
  • Environmental concern
• Virtue ethics


  Focuses on character rather than rules or consequences, emphasizes cultivating virtues (exemplary traits) to guide ethical behavior
• Virtues in business


  • Integrity
  • Compassion
  • Courage
  • Fairness
  • Wisdom
• Utilitarianism


  A theory of morality that advocates actions that foster happiness or pleasure and oppose actions that cause unhappiness or harm
• Principles of utilitarianism


  • Pleasure/happiness has intrinsic value
  • Actions are right if they promote happiness, and wrong if they promote unhappiness
  • Everyone's happiness counts equally
• Act utilitarianism


  Interested only in an action's impact when judging if that action was good
• Rule utilitarianism


  Prioritizes good general rules over the particular consequences of a given action
• Theses of utilitarian principle

  • Consequentialism
  • Hedonism
  • Maximalism
  • Universalism
• Stakeholder


  A person, group or organization with a vested interest, or stake, in the decision-making and activities of a business, organization or project
• Types of stakeholders


  • Internal stakeholders (employees, board members, shareholders)
  • External stakeholders (customers, investors, suppliers, creditors, labor union, communities, government)
• Internal stakeholder


  Directly involved with the company, such as an employee or shareholder
• External stakeholder


  Not directly involved with the company but is still interested in its success or failure
• Examples of stakeholders


  • Employees
  • Board members
  • Shareholders
  • Customers
  • Investors
  • Suppliers
  • Creditors
  • Government
• Why stakeholder engagement matters

  • Empower people
  • Create sustainable change
  • Build relationships
  • Build a better organization
  • Increase success
  • Educate
• Types of stakeholders


  • Regulatory stakeholders
  • Normative stakeholders
  • Functional stakeholders
  • Diffused stakeholders