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• Ethics


  The system of rules that governs the ordering of values
• Business ethics


  Moral principles and standards that guide behavior in the world of business
• Ethical issue


  Situation, problem, or opportunity in which an individual must choose among several actions that must be evaluated as morally right or wrong
• Possible Outcomes of Lying and Telling the Truth


  • Lying
  • Telling the truth
• Ethical Systems: universalism


  • Universalism- all people should uphold certain values that society needs to function.
  • -ex. an organization treats all employees who work in diff countries w fairness n dignity
• Decisions Made Under Different Ethical Systems

  • Examples
• Sarbanes-Oxley Act

  An act passed into law by Congress in 2002 to establish strict accounting and reporting rules to make senior managers more accountable and to improve and maintain investor confidence. ex. law requires companies to have an independent board of directors to adhere strictly to accounting rules and to have managers sign off on finacial results
• Some Ethical Issues in Business


  • CEO pay
  • Climate
  • Globalization
  • Health
  • Online privacy
  • Social media
  • Wages
• Ways to make an ethics code effective


  • Involve those who live with it in writing the statement
  • Focus on real-life situations that employees can relate to
  • Keep it short and simple, so it's easy to understand and remember
  • Write about values and shared beliefs that people can really believe in
  • Set the tone at the top
• Compliance-based ethics programs


  Company mechanisms typically designed by corporate counsel to prevent, detect, and punish legal violations
• Integrity-based ethics programs


  Company mechanisms designed to instill in people a personal responsibility for ethical behavior
• A "Typical" Process for Ethical Decision Making


  1. gets all the facts

  2. identify the issues

  3.identify all stakeholders

  4. apply an ethical framework

  5.Make & implement a decision
• Corporate social responsibility (CSR)


  Obligation toward society assumed by business
• Sustainable growth


  Economic growth and development that meet present needs without harming the needs of future generations
• Four Pillars of Corporate Social Responsibility


  • Economic responsibilities- Produce goods and services that society wants at a price that perpetuates the business and satisfies its obligations to investors
  • Legal responsibilities-Obey local, state, federal, and relevant international laws
  • Ethical responsibilities- Obey local, state, federal, and relevant international laws
  • Philanthropic responsibilities- Additional behaviors and activities that society finds desirable and that the values of the business support
• Sustainability is fully compatible with the natural ecosystems that generate and preserve life
• CSR reflects the social imperatives and the social consequences of business practices
• What Have We Learned in Chapter 5?
• • Egoism- a system defining acceptable behavior as that which maximizes consequences for the individual.
  • ex. entrepreneur builds a company for personal gains but ultimately ends up hiring thousands of employees
• • Utilitarianism- ü: An ethical system stating that the greatest good for the greatest number should be the overriding concern. ex. after a company loses 2 important clients the employees accept a 10% pay deduction instead of having people laid off.
• • Relativism- Philosophy that bases ethical behavior on the opinions and behaviors of relevant other people. ex. a student refuses to share test answers w peers because her friends would never engage in such activities
• • Virtue ethics-Perspective that what is moral comes from what a mature person with “good” moral character would deem right. ex. a manager believes it is critical to stand up for what is right and not be unduly influenced by her manager or organizational pressure
• Corporate social responsibility (CSR)

  •Obligation toward society assumed by business •CSR reflects the social imperatives and the social consequences of business practices
• Sustainable growth

  •Economic growth and development that meet present needs without harming the needs of future generations •Sustainability is fully compatible with the natural ecosystems that generate and preserve life