Business Ethics

6 Common ethical issues

Societal

Consumer

Employee

Stockholder

Corporate Corruption

Dumping

What is ethics

The difference between right and wrong

What does business ethics include

Acceptable workplace chatter

Products and services sold

The people working and buying

3 Factors of ethics

The person (Family influences ect..)

The organization (School, company, ect..)

The environment (Society overall)

What is an ethical dilemma

Neither option is a good option, people will be upset no matter what you pick

6 Examples of and ethical dilemma

Discrimination

Sexism

Conflict of interest

Downsizing/ Outsourcing

Product safety

Pollution

Ethical role model

People pick up habits of those around them

Managers influence

Lead by example and set expectations

4 Common types of rationalization (Ethical reasoning)

Behavior is not really illegal

Behavior is in everyone’s best interest

Nobody will ever find out

The organization will ‘‘protect’’ you

4 Views of ethics

Utilitarian

Individualism

Mortal rights

Justice

Utilitarian view of ethics

Greatest good to the greatest number of people

Individualism view of ethics

Primary commitment is to ones self

Moral rights view of ethics

Respects the fundamental rights of all people

Justice view of ethics

Fair and impartial treatment of people according to rules and standards

2 Types of global ethical reasoning

Cultural relativism

Ethical Imperialism

Cultural relativism

Ethical behavior is always determined by cultural context

Ethical Imperialism

Behavior that is unacceptable in ones home environment should not be acceptable anywhere else

Societal Issues

Environmental pollution

Poverty and protectionism of rich nations

Loss of sovereignty due to globalization

Loss of control due to influence of MNC

Example of a societal issue

Canadian Barrack Gold mines in Chile, we are damaging their water and glaciers (Pollution)

Consumer issues

Quality and safety issues

Product recalls

2 Examples of a consumer issue

XL Beef recal

Maple leaf outbreak, they respond right

Employee issues

Workplace health and safety

Equality

Human rights issues

Labor issues

Stockholder issues

Protecting shareholders wealth

Full disclosure

Excessive executive pay packages

Fraudulent earning claims

Corporate Corruption and dumping

Illegal activities which further business’ interests

Corruption prevents investment

Bribes and kickbacks are common and accepted practice in countries

Example of corporate corruption and dumping

China dumping steel

Whats a stakeholder

People and groups the company must take into consideration when making decision because they are affected

7 Types of stakeholders

Shareholder

Employees

Customers

Distributors

Community

Labor unions

Government

Corporate social responsibility (CSR)

Looks at ethical issues at the organizational level

Beliefs CSR

People do better with work life balance

Healthy communities

Protect nepotism

Protect environment

2 Perspectives on social responsibility

Classical View

Socioeconomic view

Clasical view

Maximize profits

Socioeconomic view

Concerned for broader social welfare not just profits

5 Arguments for social responsibility

Better public image

Avoids government regulations

Businesses have ethical obligations

Better environment

Public wants it

4 Arguments against social responsibility

Loss in profits

Higher business costs

Less public accountability

Too much social power

Criteria for evaluation of social responsibility (4)

Economic

Legal

Ethical

Discretionary

4 Strategies for pursuing social responsibilities

Proactive

Accommodative

Defensive

Obstructionist

Proactive Strategy

Going above and beyond/ leading the way

(Economic, Legal, Moral + Ethical

Accommodative strategy

Doing minimum plus mortal, normally when forced (Moral, Economic, + Legal)

Defensive strategy

The minimum (Economic and Legal)

Obstructionist Strategy

Not even passing legal requirements (Economic)

Proactive Strategy (Stakeholders)

Go out of way to help stakeholders

Ex.. McDonalds > Ronald McDonald House

Accommodative strategy (Stakeholders)

Balance interest of all stakeholders

Defensive strategy (Stakeholders)

Stay within laws but nothing else

Shareholder interest above all stakeholders

Managers say society should make laws if change is needed

Ex… Tobacco companies

Obstructionist Strategy (Stakeholders)

Managers choose to not be socially responsible

Behave illegally and unethically and hide problems

Sweatshop

Places of employment with deplorable working conditions working long hard hours for pennies for hours worked, typically in RMG industry

Conflict of interest

A situation where a person or business is in a position to exploit their position for their own personal or corporate benefit

Planned obsolescence

Goods that are made to fall apart or break requiring a repurchase

Ex.. Apple phones

Child labor deterrence act

Outlawed importation of goods made with child labor to protect them but resulted in an increase in poverty and prostitution rates

Race to the bottom

Chasing the cheapest input costs results in a suppression of wages and standards world wide

Triple bottom line

People (Social)

Planet (Environment)

Profit

Excessive executive pay is an example of what type of ethical issue?

Stockholder

What type of ethical reasoning was employed when enacting the Child Labour Deterrence Act?

ethical imperialism

Indicate which stakeholder is mostly likely to be affected by the "Ride Program" in Georgetown.

community

Bob was given insider information on Apple prompting him to sell shares. Which ethical issue?

stockholder

How might Bob have rationalized his decision to sell Apple shares with information provided by an Apple employee?

nobody would get hurt

In China it is customary to provide a "red envelop" to secure a contract. What reasoning?

cultural relativism

According to the classical perspective of business which ethical framework must be met?

justice