BUSINESS ETHICS

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BUSINESS ETHICS RELATED APPROACHES

• Bilge Öztürk
• Mehmet Hartlap
• Murat Akkaya
• Mehtap Ulusal

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Topics to be Covered

• Basic Definitions Ethical Approaches
• Business Ethics and its Evolution
• Ethics in Business
• Managing Business Ethics

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Basic Definitions and Ethical Approaches

• Bilge ÖZTÜRK

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Basic Definitions

• Norms
• Values
• Morality
• Ethics

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Norms

• Action directives that tell us what we should or
  should not do in certain situations.

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Values

• Intrinsically worthy experiences, states of
  affairs and qualities of people or organizations.

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Morality

• The special set of values that mark off the more
  or less absolute limitations on behavior

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Ethics

• Ethics A set of moral principles or values
  that governs the conduct of an individual or a
  group.

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Ethics Continued

• Micro ethics our personal and professional
  concerns for living well and doing what is right
• Macro ethics larger concerns about the kind of
  society we live in, the kind of economic system
  that serves the society

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Ethical Theories
Ethical Fundamentalism
Utilitarianism
Ethical Relativism
Kantian Ethics
Rawlss Social Justice Theory
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Ethical Fundamentalism

• Ethical fundamentalism - When a person looks to
  an outside source for ethical rules or commands.

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Utilitarianism

• A moral theory that dictates that people must
  choose the action or follow the rule that
  provides the greatest good to society.
• This does not mean the greatest good for the
  greatest number of people.

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Kantian Ethics (Duty Ethics)

• A moral theory that says people owe moral duties
  that are based on universal rules.
• This theory would have people behave according to
  the categorical imperative
• Do unto others as you would have them do unto
  you.

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Kantian Ethics (Duty Ethics) (continued)

• Deontologys universal rules are based on two
  important principles
• Consistency
• Reversibility

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Rawlss Social Justice Theory

• Rawlss social contract
• A moral theory that says each person is presumed
  to have entered into a social contract, with all
  others in society, to obey moral rules that are
  necessary for people to live in peace and harmony.

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Rawlss Social Justice Theory (continued)

• Rawlss Distributive Justice Theory
• veil of ignorance would permit the fairest
  possible principles to be selected.

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Ethical Relativism

• A moral theory that holds that individuals must
  decide what is ethical based on their own
  feelings as to what is right or wrong.
• If a person meets his or her own moral standard
  in making a decision, no one can criticize him or
  her for it.

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Business Ethics and Its Evolution

• Mehmet Hartlap

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• The most powerful argument for ethics in
  business is success.Robert C. Solomon

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What is Business Ethics?

• Consist of principles and standards that guide
  behavior in the world of business.

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Evolution of Business Ethics

• Before 1960 Presented from a religious
  viewpointconcerns about fair wages labor
  practices capitalism
• The 1960s organization became ethical unit
  numerous consumer protection laws

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The 1970s

• Began to develop as a field of study
• Business Professors began to teach write about
  corporate social responsibility
• Philosophers applied ethical theories to
  business
• Centers dealing with issues of business ethics
  established

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The 1980s - Consolidation

• Acknowledged as a field of study
• Growth of college courses
• Growth of services provided by Centers of
  Business Ethics

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The 1990s - Institutionalization

• support of free trade, but greater restrictions
  on tobacco companies advertising
• Guidelines for Organizations, setting tone for
  ethical compliance programs

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2000 Beyond

• Trend to move away from legally based ethical
  efforts to.
• Culturally-based ethical initiatives
• Seeing development of global standards of ethics
  

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Business Ethics Today vs. Earlier Period

Societys Expectations of Business Ethics
Expected and Actual Levelsof Business Ethics
Ethical Problem
Actual Business Ethics
Ethical Problem
1950s
2000s
Time
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Ethics in Business

• Murat Akkaya

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Why study business ethics?
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Why? Why? Why?

• According to the study carried by Price
  Waterhouse Coopers, Turkey is the 4th country in
  CORRUPTION among 35 countries.
• According to international transparency, Turkey
  is numbered as 62nd among 102 countries in 2002,
  52nd in 2001 and 27th in 1995.
• We think, these are the enough results that shows
  the need to ethical studies of Turkey.

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Common Causes of Unethical Behavior

• Following bosss directives
• Meeting overly aggressive business/financial
  objectives
• Helping the organization survive
• Meeting schedule pressures
• Be a team player (group think)
• Rationalizing that others do it
• Resisting competitive threats
• Advancing own career

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1-Following bosss directives

• To be a journalist in Dogan Holding!

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Some Examples From Milliyet

• Aydin Dogan yine rekortmen!
• (http//www.milliyet.com/2004/04/07/ekonomi/aeko.h
  tml)
• Erzincana Aydin Dogan Kiz Ögrenci Yurdu!
• (http//www.milliyet.com/2006/03/19/guncel/gun05.h
  tml)
• 500 agaçlik Aydin Dogan Ormani!
• (http//www.milliyet.com/2002/04/12/yasam/yas09.ht
  ml)
• Sweet Heart Aydin Dogan in every topic!!!

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To be a journalist in Dogan Holding!!!

• You may see lots of topics in Milliyet or
  Hürriyet that priase Aydin Dogan.
• But surprisingly! You can not find such topics in
  other newspaper groups (Ciner, Uzan).
• Because the boss of the newspapers is Aydin Dogan
  and
• The bosss directives is clear
• Show me as the sweet angel of Turkey
• But we know from our research that ethical
  studies say journalism had to be independent.
• So, it is difficult to be an ethical journalist
  in Milliyet or Hürriyet.
• And What about us???

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2-Meeting overly aggressive business/financial
objectives

• To Be a banker in

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To Be a banker in

• Citibank in Germany
• Citibank in Japan
• Citibank in European Area
• (Hürrüyet, 16.12.2004)

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3-Advancing own career

• To be a manager in
• (Vatan, Emine Algan)

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To be a manager in

• You can buy a cancer drug of Roche privately for
  88 YTL in Turkey.
• But, it was sold to SSK for 230 YTL, because
  Roche assume that the government was so rich.
• Veysi Mungan, an engineer in Roche, complained to
  court about this interesting situation.
• But, all the top managers want to stop him.

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Common Unethical Acts

• Lying to supervisors
• Falsifying records
• Conflict of Interest
• Stealing
• Gift/entertainment receipt in violation of
  company policy

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Common Misconduct in Organizations

• Misrepresenting hours worked
• Management lying to employees, customers, vendors
  or the public
• Misuse of organizational assets
• Lying on reports/falsifying records
• Sexual harassment
• Stealing/theft
• Accepting or giving bribes or kickbacks
• Withholding needed information from employees,
  customers, vendors or public

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1-Misrepresenting hours worked

• Textile industry in Turkey and China
• No boundary of overworking (12 hour a day, 7 days
  in a week)
• No social gains (SSK in Turkey)
• No legal salary (Asgari Ücret in Turkey)
• Children meet to Factories in Turkey and also in
  china
• So, Who cares the rules?

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2-Management lying to employees, customers,
vendors or the public

• s message to customers and public
  
• I do not hire children in my company.
• But I work with the Chinese companies that hires
  children.

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3-Sexual harassment

• A question to business woman in Turkey
• Do you face to sexual harassment in your business
  life?
• Yes 40/No 48.84/Im not certain 11
• (Insankaynaklari.com)

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What are the effects of sexual harassment?
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4-Withholding needed information from employees,
customers, vendors or public

• Enron
• Tyco
• World-com

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EXAMPLES OF UNETHICAL BEHAVOIR

• Causing the removal/disappearance of information
• Professionals practicing beyond area of expertise
  
• Unnecessary stimulation of conflict
• Failure to follow proper procedure
• Disregarding individual privacy
• Misleading advertising
• Conflict of interest

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1-Misleading advertising

• Norwegian Fishers-Cosmetics Firms
• Pantene Pro-V, PG in England
• Gençlestiriyor, yeniliyor, sikilastiriyor,
  besliyor.
• (Hürriyet, 13.05.2005)

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The Summary Of this Section

• Hiçbir zaman idealist olmadim, ne yani aç mi
  kalsaydim?
• Mehmet Ali Erbil
• (Taken from the magazine, Haftalik)

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Managing Business Ethics
Mehtap Ulusal
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Ethical Dilemmas

• Making decisions under stress or dealing with
  complex issues that have no clear indication of
  what is right or wrong.
• There are NO simple ethical dilemmasall have
  layers of meaning and effect.

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Ethical Dilemmas

• Honesty integrity
• Conflict of interest
• Loyalty vs.. truth
• Whistle-blowing

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A Real Life Example

• WHAT WOULD YOU DO IF YOU WERE THE SALES MANAGER???

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The Ethics Check

• Is it Legal?
• Is it Fair?
• How do I feel about it?

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Helping Employees Do the Right Thing

• Prepare an Ethics Statement (codes of ethics)
• a written outline of the ethical principles of
  a business

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Codes of Ethics

• Areas often covered by codes of ethics
• Workforce diversity
• Bribes and kickbacks
• Political contributions
• Honesty of books or records
• Customer/supplier relationships
• Confidentiality of corporate information

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A Good ExampleJohnson Johnson

• We believe our first responsibility is to the
  doctors, nurses and patients, to the mothers and
  fathers and all others who use our products and
  services. In meeting their needs, everything must
  be of high quality. We constantly strive to
  reduce our costs in order to maintain reasonable
  prices. Customers orders must be serviced
  promptly and accurately. Our suppliers and
  distributors must have an opportunity to make a
  fair profit.

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A Good ExampleJohnson Johnson

• Clearly established Code of Ethics
• Constancy in adherence to Code
• Positive Community perception
• Higher Management support
• Maintenance of Focus
• Staff Involvement

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Helping Employees Do the Right Thing (continued)

• Talking about ethics
• Clarify employees responsibilities to
  stakeholders
• Dont punish employees for expressing moral views
• Encourage people to resolve problems through
  collaboration
• Eliminate all abuses of ethical standards
• Encourage discussion of ethical standards

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Helping Employees Do the Right Thing (continued)

• Dont reward unethical behavior
• Create departments of ethics and law
• Provide legal and Ethics Training
• Provide ethical leadership
• Maintain constancy of purpose

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Good Managers Make the Difference

• Managers must accept personal responsibility for
  doing the right things.
• Managers play a crucial role in responding to
  public demands.
• Ethics and social responsibility play a central
  role in managers decisions and activities.

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Benefits of Managing Ethics in the Workplace

• Improves society.
• Maintains a moral course in turbulent times.
• Cultivates employee teamwork, productivity,
  morale and development.
• Establishes values for quality management,
  strategic planning and diversity management.
• Promotes strong public image.
• It is the RIGHT thing to do!

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CLOSURE OF TOPIC

• Business ethics, practiced throughout the
  deepest layers of a company, become the heart and
  soul of the company's culture and can mean the
  difference between success and failure

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• Be Trustful, keep an Open Mind, Meet Obligations,
  Have Clear Documents, Become Community Involved,
  Maintain Accounting Control, Be Respectful...
• Robert Moment

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• THANK YOU!!!