Why does business have such a negative image 1

1
Why does business have such a negative image? (1)

• As weve discussed before, its difficult to
  find a positive portrayal of business in movies,
  books, or TV shows.
• More generally, less than two percent of
  Americans rated U.S. companies as excellent
  corporate citizens (Batstone, 2003).

2
Why does business have such a negative image? (2)

• In some sense the negative image of business is
  unfair. Most businesspeople do not wake up
  wanting to do harm to their stakeholders. But
  competitive pressures, individual greed, and
  differing cultural contexts generate ethical
  issues for organizational managers.

3
Why does business have such a negative image? (3)

• Further, in almost every organization some
  people will have the inclination to behave
  unethically (the ethical egoist)necessitating
  systems to ensure that such behavior is either
  stopped or detected (after unethical behavior
  occurs) and remedied.

4
Ethical dilemmas in business (1)

• A dilemma exists when you have a choice between
  two or more options.
• A business dilemma exists when an
  organizational decision maker faces a choice
  between two or more options that will have
  various impacts on (a) the organizations
  profitability and competitiveness and (b) its
  stakeholders.

5
Ethical dilemmas in business (2)

• Ethics (also called moral philosophy), involves
  systematizing, defending, and recommending
  concepts of right and wrong behavior.
• Business ethics is the application of general
  ethical principles to business dilemmas.

6
Why should businesses act ethically? (1)

• There are a number of reasons why businesses
  should act ethically
• to meet stakeholder expectations (and protect the
  formers reputations),
• to prevent harm to the general public,
• to build trust with key stakeholder groups,
• to protect themselves from abuse from unethical
  employees and competitors,

7
Why should businesses act ethically? (2)

• to protect their own employees, and
• to create an environment in which workers can act
  in ways consistent with their values.
• The U.S. Corporate Sentencing Guidelines also
  provide an incentive to set up corporate ethics
  programs.

8
Functional-area ethics

• The specialization of business tasks creates
  ethical issues specific to particular functions
  (accounting, finance, marketing, etc.).
• That said, each functional area must also be
  aware of its relationship to the entire
  organization.

9
International business ethics

• Briberyprohibited in the U.S. by the Foreign
  Corrupt Practices Actincreases costs paid by
  foreign buyers (often government officials who
  divert money needed for the human needs of the
  population to themselves). There have been a
  number of attempts by NGOs and governments to
  develop codes of conduct for the international
  operations of businesses.

10
Ethics and the law (1)

• Remember that everything that is legal is not
  ethical. Business ethics encompasses a broader
  range of issues and concerns than laws do.
  (Further, it is often possible for businesses to
  preempt legislationand in do doing preserve some
  autonomy.)

11
Ethics and the law (2)

• Most corporate ethics codes go beyond mere
  compliance with the law and take in a broad range
  of social responsibilities to various
  stakeholders.
• As weve seen from various business
• scandals, the costs associated with illegal
  and/or unethical activities are in the untold
  billionsnot to mention non-monetary costs.

12
And finally. . .

• We need to go beyond the business sucks story
  (Freeman, 2002) if we are to make any progress in
  improving the image (and social performance) of
  business. One goal of managers should be to
  create a deal that allows all of an
  organizations stakeholders to benefit over time.