Class: Business Law Bus. 02

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WELCOME!

• Class Business Law (Bus. 02)
• Instructor Carolyn Johnson

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Agenda

• Administration and Todays Agenda
• Chapter 2 Review
• Video - Business Ethics an oxymoron?
• Group Work Chapter 2
• Break
• K-W-L
• Chapter 3 Review
• Group Work Chapter 3
• Class Review
• Handout Review
• Assignment Review
• Journal and Student Feedback
• Preview

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BUSINESS LAW TODAY Essentials 8th Ed.Roger
LeRoy Miller - Institute for University Studies,
Arlington, TexasGaylord A. Jentz - University of
Texas at Austin, Emeritus
Ethics and Business Decision Making
Chapter 2
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Learning Objectives

• What is ethics? What is business ethics? Why is
  business ethics important?
• How can business leaders encourage their
  companies to act ethically?
• What are corporate compliance programs?
• How do duty based ethical standards differ from
  outcome-based ethical standards?
• What types of ethical issues might arise in the
  context of international business transactions?

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Business Ethics

• Ethics is the study of right and wrong behavior
  whether an action is fair, right or just.
• In business, ethical decisions are the
  application of moral and ethical principles to
  the marketplace and workplace.

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Why is Business Ethics Important?

• Directors and Officers owe a complex set of
  ethical duties to the company, shareholders,
  customers, community, employees, and suppliers.
• When these duties conflict, ethical dilemmas are
  created.

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Importance of Ethical Leadership

• Importance of Ethical Leadership.
• CASE 2.1 In re the Exxon Valdez (2004).
• Creating Ethical Codes of Conduct.
• Costco.
• Clear Communications to Employees.
• Johnson and Johnson web-based ethical training.
• Corporate Compliance Programs ?
• Sarbanes-Oxley and Web-based reporting.
• Conflicts and Trade-Offs.

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Corporate Compliance

• A number of contexts, within the
  employer-employee relationship, are fraught with
  ethical considerations, such as
• Having a system in place to detect, prevent,
  eliminate, and punish behavior of a harassing
  nature toward employees.
• Avoiding wrongful discharge, either actual or
  constructive.
• Adhering to ethical principles during corporate
  restructuring and downsizing.

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Companies That Defy the Rules

• Enrons Growth and Demise in a Nutshell.
• Merck Company A Brief History of Vioxx.
• Mercks awareness of the risks.
• Mercks choice.

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Business Ethics and the Law

• Legal compliance is the moral/ethical minimum.
• Simply obeying the law does not necessarily make
  the business practice ethical.
• Gray areas in the law.
• Business leaders must contemplate the ethical
  implications of a business decision.
• CASE 2.2 Guin v. Brazos Higher Education
  Service Corp. (2006).

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Approaches to Ethical Reasoning

• Duty Based Ethics - derived from religious and
  philosophical principles.
• Religious Ethical Standards.
• Kantian Ethics.
• Rights Principles.
• Outcome-Based Ethics - seek to ensure a given
  outcome.
• Utilitarianism.

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Corporate Social Responsibility

• Profit Maximization a corporation exists to use
  its resources to increase its profits, within the
  bounds of the law.
• Stakeholder Approach. Corporate actions affect
  others.
• Corporate Citizenship. Corporations should be
  good citizens.
• Maximum vs. Optimum Profits.
• CASE 2.3 Fog Cutter Capital Group Inc. v.
  Securities Exchange Commission (2007).

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Business Ethics on a Global Level

• American companies must be trained in
  cross-cultural business practices.
• Monitoring the Employment Practices of Foreign
  Suppliers.
• Corporate Watch groups can disseminate
  information instantly around world.
• Foreign Corrupt Practices Act.
• Bribes and Accounting Practices.

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Learning Objectives

• What is ethics? What is business ethics? Why is
  business ethics important?
• How can business leaders encourage their
  companies to act ethically?
• What are corporate compliance programs?
• How do duty based ethical standards differ from
  outcome-based ethical standards?
• What types of ethical issues might arise in the
  context of international business transactions?

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Group Work

• Sucks SitesCan They Be Shut Down?
• Give examples of your own ethical standards and
  explain how you arrived at those standards.
• If there is a conflict between a law and an
  ethic, should an individual disobey the law, or
  should an individual obey the law even if he or
  she thinks it would be unethical to do so? Is
  there a higher law than what society provides in
  a particular place at a particular time?

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Group Work

• Would you, as owners of a business, offer a
  prospective employee a lower salary if (1) the
  employee indicated during the interview that she
  expected a lower salary than they had been
  prepared to offer based on other companies
  salaries for similar positions? (2) paying the
  lower salary would violate no law? (3) the
  position was unique within the company (so that
  there were not other employees with whom she
  could compare pay)?
• Should ethical standards be adapted to deal with
  the new forms of social disruption made possible
  by the Internet (for example, data theft,
  hacking, virus implanting, and invasion of
  privacy)? What new ethical standards, if any,
  are needed to resolve problems online?