Ethics

ethics

accepted principles of right or wrong that govern the conduct of a person, the members of a profession, or the actions of an organization

Business ethics

accepted principles of right or wrong governing the conduct of business people

What are ethical Issues in the Global Business Environment?

• sustainability

• countries to supply and buy from

• child labour

Ethical Issues in the Global Business Environment

• Corruption

• Employment / Practices/Child / Labor Abuses

• Human rights

• Environment Pollution

• AI & Data Ethics

Arguments For Bribery

• it’s necessary for profits in order to do business

• everybody does it

• it’s accepted practice in many countries

• briberies are forms of commissions, taxes, or compensation for conducting business between cultures

Arguments Against Bribery

• it’s illegal in many developed countries

• such demands, once started, never stop

• those receiving bribes are the only ones who benefit

• it deceives stockholders and pass on costs to customers

• one should take a stand for honesty, morality, and ethics

Ethical dilemmas

• situations in which none of the alternatives seem ethically acceptable

• gift giving in many Asian countries is considered proper behavior, but some Western countries see it as a form of bribery

• there may be no agreement about accepted ethical principles

• from an international business perspective, some argue that what’s ethical depends upon one’s cultural perspective

Why we have Ethical Dilemmas

• Because real world decisions are complex, difficult to frame, and involve various consequences that are difficult to quantify

• Ethical obligations of multinational corporations aren’t always clear cut

Why do managers behave unethically?

• Decision making processes: Managers may not realize that they’re unethical

• Organization culture: values and norms shared among employees

• Unrealistic performance goals: there’s pressure from parent firm

• Leadership: If leaders aren’t acting ethically

• Societal Culture: also influence behavior

How to deal with ethical issues

1. Favor hiring and promoting people

2. Build organizational culture

3. Put decision making processes

4. Ethical officers

5. Develop moral courage

6. Make CSR a cornerstone enterprise policy

7. Pursue sustainable strategies

Favor hiring and promoting people

Hire and promote people with a well-grounded sense of personal ethics

Build organizational culture

• Emphasize the importance of a code of ethics

• Implement a system of incentives that recognize people who engage in ethical behavior

Put decision making processes

• Make sure ethical issues are considered in business decisions

• Would people close to me (family members, friends, colleagues) approve of the decision?

Ethical officers

Institute ethical officers in the organization

Develop moral courage

Gives an employee the strength to say no to a superior who instructs employee to pursue actions that are unethical

Make CSR a cornerstone enterprise policy

Advocates argue that businesses need to recognize their responsible business conduct and give something back to the societies that have made their success possible

Pursue sustainable strategies

Actions impart long-run economic and social benefits on stakeholders

Why ESG is important

“Failing to consider long-term investment value drivers, which include environmental, social and governance issues, in investment practice is a failure of fiduciary duty.”

Environmental, Social, and Corporate Governance (ESG)

• Environmental

  • Climate change strategy, Biodiversity, Water efficiency

• Social

  • Equal opportunities, Freedom of association, Health and safety

• Governance

  • Business ethics, Compliance, Board independence

3 central factors in measuring the sustainability and societal impact of an investment in a company or business.

Social responsibility

idea that businesspeople should consider the social consequences of economic actions when making business decisions, and that there should be a presumption in favor of decisions that have both good economic and social consequences.

Noblesse oblige

implies that with wealth, power, and prestige come with responsibilities