Business ethics

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Business ethics

• Start off with choices
• Video--What would you NOT do.

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Definitions (p. 106-107)

• Ethics standards about what is good/bad right or
  wrong with ones conduct
• Ethical behavior is generally accepted as what is
  right or good behavior
• Beyond legal issues.
• Often confronted as a manager with making ethical
  choices.

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Issues

• What is right and good or wrong and bad to whom?

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Ethics covers all aspect of decision and
business. Daily interactions

• Honesty vs white lies with others
• Conflicts of interest
• Environmental issues
• Product safety and reliability
• Accounting and stockholders
• Information technology and privacy (cookies).

5
New problem.

• Single parent. Excessively late. Talked once
  and warned. Got better for one month but then
  back to old patterns. What do you do?

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How do you determine what is right?

• Utilitarianism and individualism. Act in self
  interest. If everyone is free to do so (major
  assumption), the good of society is served.
• Moral rightsFreedom comes with Rights and
  Responsibilities. Contractual relationship.
• Justice viewimpartial and fair treatment for
  all. Treat all similarly. Define rules
• Care view compassion for those who need it.
  Treat everyone differently. Some have greater
  needs than others.

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Difficulties in ethics

• Ethics is relativistic (Cultural relativism) or
  constant.
• Examples Bribes, child labor, sexual
  harassment, pollution.

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Do Businesses really care?

• Evidence for caring.
• Evidence for not caring.

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Evidence for Caring

• Companies engage in codes of ethics.
• Ethical standards for dealing with different
  issues.
• A number of companies put ethics in their mission
  statements.
• Some companies of ethics officers (usually
  internally auditors).

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Most importantly

• Most companies (not all) operate fairly and
  honestly with customers and other external groups
  such as suppliers and bankers

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Evidence for not caring

• Bottom line is to make money at any reasonable
  cost.
• Bottom line is for me to get ahead of others in
  my career at any reasonable cost.

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Do employees care

• Survey of 2000 secretaries
• 58 of secretaries lie about their supervisors
  whereabouts
• 27 have shared confidential information
• 17 have notarized a document without witnessing
  a signature

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• 12 have changed or been involved with changing
  the minutes of a meeting
• 10 have destroyed damaging information
• What will you do if asked?
• What will you ask others to do?

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Why Unethical/ethical

• Bottom line question.

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Book suggests that diverse interests.

• What makes people behave ethically or ethically
  or unethically.
• Small group of people who have strong sense of
  ethics. Strong value base. People who are
  willing to risk quality of life for values.
  Thoreau, Nelson Mandela, Gahndi, Martin Luther
  King.

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Most of us have relativistic ethics

• Moral dilemmas are complex. We are forced to
  make lots of choices. Often act in self
  interest.
• Examples with pollution. An owner and an
  employee.
• Both were good people.
• No difference than the current batch of
  accountants. Arthur AndersonLeader in Ethics.

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• People act in an organization and organization
  influences behavior. Lets talk about the
  examples. Why did people do what they did?

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The most important is the organization.

• Logistics issue.
• Truckers 10 hours a time max.
• Irate customer calls and shipment is 4 hours away
  if driver violates time rules.
• Policy satisfaction or money back.
• What does this rule do?

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Columbia and HCA

• Get double digit profits in industry that grows
  in single digits. On top of that, 50 of
  business is medicaid medicare with predefined
  prices. How to achieve?

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The employing organization

• Endemic to culture--short term interests prevail
  over long term interests.
• Self-interest vs interests of others
• What are the long term benefits of making ethical
  decisions.

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Creating a culture that supports ethical behavior.

• Long term relationships
• Book suggests codes of Ethics and training.
• While a help, Arthur Anderson did this.
• Selection is important and does help.

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• Watch dogEthics officer. Whistle Blower.
• Role Model
• Reward systems (need to go beyond quality and
  quantity).
• Sensitivity to organizational rules and
  practices that make ethical behavior difficult.
• Minimizing power of supervisors and empowering
  subordinates in teams.

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Summary

• Why be ethical?
• Why do some managers take advantage of their
  leadership positions
• What are the main reasons managers become
  corrupted.
• How well should you reward good ethical behavior.

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Short term vs Long term

• Your reputation is all that you have.
• Finish with a story about someone by the name
  of Janetta.