Conducting Business Ethically and Responsibly

1
Conducting Business Ethically and Responsibly
Carl Fiorina, former CEO of Hewlett-Packard,
October 19, 2006Personal Ethics (4 min.)
Prof. Bauer-Ramazani
2
Ethical Dilemma -- definition

• A predicament in which a (business) person must
  resolve whether an action may be considered
  unethical even if it benefits the organization,
  the individual, or both.
• An ethical dilemma may arise when two norms or
  values are in conflict
• Identify the 2 norms or values.
• Tradeoffs

3
What Is Ethical Behavior?

• Ethics
• Right or wrong, good or bad, in actions that
  affect others
• Ethical Behavior
• Conforming to individual beliefs AND social norms
  about whats right and good
• Business ethics
• Ethical or unethical behavior by employees of
  organizations

4
Formalizing the Commitment to Ethics
Adopting Written Codes
Instituting Ethics Programs
5
Code of Ethics

• formal statement a guide for how people within
  a particular organization should act and make
  decisions in an ethical fashion.
• s Code of
  Business Conduct (in 15 languages)
• Our Code of Business Conduct serves to guide the
  actions of our employees, officers and directors
  in ways that are consistent with our core values
  honesty integrity diversity quality respect
  responsibility and, accountability. The Code
  helps our people play by the rules wherever we
  operate around the world. (http//www.thecoca-col
  acompany.com/ourcompany/business_conduct.html)

6
Ethical Decision Model by the Josephson Institute
of Ethics

1. All decisions must take into account and reflect
   a concern for the interests and well-being of ALL
   stakeholders.
2. Core ethical values and principles ALWAYS take
   precedence over non-ethical ones, e.g.
   self-interest.

7
6 Core Ethical Values for Ethical Decisions
8
Major Corporate StakeholdersGroups,
individuals, and organizations that are directly
affected by the practices of an organization
Businesses have a social responsibility toward
them.
9
Steps in Making Ethical Decisions
10
Responsibility Toward Customers
Consumer Rights
Fair Pricing
Ethics in Advertising
11
Responsibility Toward Employees

• Ethical Commitments
• Whistle-blowers

• Legal and Social Commitments
• Safe work environment
• Equal pay

12
David Batstone on whistleblowing Unethical
behavior at work? (246 min)
13
Responsibility Toward Investors

1. NO improper financial management
2. NO insider trading
3. NO misrepresentation of finances on financial
   statements

14
Responsibility Toward Local Communities

• Environment
• Air pollution
• Water pollution
• Land pollution
• Clean up toxic waste
• Use recycling
• Growth / infrastructure
• Social well-being of all members of the
  community

15
Company Practices and Business Ethics
Best Approach Open, Honest, Responsive!
Lawsuits as a result of pharmaceutical company
Mercks announcement about the potential side
effects of its drug Vioxx and subsequent
withdrawal
16
7 possible Guidelines for Making Ethical
Decisions in the Work Place (Please refer to
your handout.)

1. The Golden Rule
2. The Utilitarian Principle
3. Kants Categorical Imperative
4. The Professional Ethic
5. The TV Test
6. The Legal Test
7. The Four-Way Test

Business Ethics My Life in Headlines (1 min.)
17
Social Audits

• Many companies attempt to regulate themselves on
  the topic of social responsibility and ethics.
  They do this through social audits.
• A social audit is a form of self-regulation in
  which the company attempts to monitor managers
  and employees ethical behavior.

18
Managing Social Responsibility Ethics
Programs

• Key steps
• Social responsibility and ethics must start at
  the top.
• A committee of top managers must develop a plan
  detailing the level of top management support.
• One executive must be put in charge of the firms
  agenda.
• The organization must conduct periodic social
  audits
• Evaluate progress in achieving social
  responsibility goals