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Business Ethics Chapter 2 Ethics? What is Ethics?.

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Business Ethics Chapter 2 Ethics? What is Ethics?
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Page 1: Business Ethics Chapter 2 Ethics? What is Ethics?.

Business Ethics Chapter 2

Ethics? What is Ethics?

Page 2: Business Ethics Chapter 2 Ethics? What is Ethics?.

Effective immediately, MSNBC will no longer simulcast the "Imus in the Morning" radio program. 

Effective immediately, MSNBC will no longer simulcast the "Imus in the Morning" radio program.  This decision comes as a result of an ongoing review process, which initially included the announcement of a suspension. It also takes into account many conversations with our own employees.  What matters to us most is that the men and women of NBC Universal have confidence in the values we have set for this company.  This is the only decision that makes that possible.  Once again, we apologize to the women of the Rutgers basketball team and to our viewers. We deeply regret the pain this incident has caused.—Statement from NBC News

Page 3: Business Ethics Chapter 2 Ethics? What is Ethics?.

Levels of CorporateLevels of CorporateSocial ResponsibilitySocial Responsibility

Societal ResponsibilitySocietal Responsibility

Stakeholder ResponsibilityStakeholder Responsibility

Profit ResponsibilityProfit Responsibility

Owners/StockholdersOwners/StockholdersGeneralGeneral

PublicPublic

CustomersCustomers

EmployeesEmployees

Suppliers/DistributorsSuppliers/Distributors

EcologicalEcological

EnvironmentEnvironment

Public Interest GroupsPublic Interest GroupsSource: Source: MarketingMarketing, 5/E by Berkowitz, Kerin, Hartley, and Rudelius., 5/E by Berkowitz, Kerin, Hartley, and Rudelius.

The Social Contract

Page 4: Business Ethics Chapter 2 Ethics? What is Ethics?.

The Social Contract Theory

The social contract defines the permissible scope of business conduct and goes beyond the purely economic issues. If society wants more from business than profits, business must accept this mandate in order to survive in society. To do otherwise is to breach the social contract.

Page 5: Business Ethics Chapter 2 Ethics? What is Ethics?.

Executive's Fatal Flaw:Failing to Understand

New Demands on CEOsJanuary 4, 2007; Page A1

RE: Robert Nardelli's demise as chief executive of Home Depot

“What Mr. Nardelli missed, however, is that in the post-Enron world, CEOs have been forced to respond to a widening array of

shareholder advocates, hedge funds, private-equity deal makers, legislators, regulators, attorneys general,

nongovernmental organizations and countless others who want a say in how public companies manage their affairs. Today's

CEO, in effect, has to play the role of a politician, answering to varied constituents. And it's in that role that Mr. Nardelli failed

most spectacularly.”Wall Street Journal, January 4, 2007

Page 6: Business Ethics Chapter 2 Ethics? What is Ethics?.

Chairman and CEO, John Mackey

Page 7: Business Ethics Chapter 2 Ethics? What is Ethics?.

Dixie Chicks Break Social Contract with Americans

http://www.youtube.com/watch?v=dYyIOYEewxY&feature=related

Page 8: Business Ethics Chapter 2 Ethics? What is Ethics?.

Consequential and Nonconsequential Principles

Consequential (Teleological) Principles

EgoismUtilitarianismFeminism

Nonconsequential (deontological) Principles

Categorical ImperativeKant – 18th Century German Philosopher

Veil of IgnoranceJohn Rawls

A Theory of Justice (1971) Political Liberalism (1993)

Ethical Relativism (vergers on Political Correctness)The Golden Rule

Page 9: Business Ethics Chapter 2 Ethics? What is Ethics?.

Egoism – Compassion or Competition?

“From an organizational perspective, egoism involves those actions that best promote the long-term interests of the organization. Thus, a corporation may establish a minority hiring program or a college scholarship program, and in doing so, the corporation may well be acting in a purely egoistic manner. These programs may advance the long-term interest of the corporation by improving its public image, reducing social tensions, or avoiding legal problems that might otherwise have arisen.”

Page 10: Business Ethics Chapter 2 Ethics? What is Ethics?.

Dr. Ned Doffoney accepts a $50,000 donation to the OAB A Legacy Renewed campaign from Ken Hatfield, vice president of communications and public affairs for the Fresno Bee on August 9.

Is this a form of Egoism?

Page 11: Business Ethics Chapter 2 Ethics? What is Ethics?.

Vons on Facebook…

Page 12: Business Ethics Chapter 2 Ethics? What is Ethics?.

Mayor Ashley Swearengin = Representing FRESNO

Egoism – An act is ethical when It promotes the best long-term Interest of the firm, or in this case City of Fresno.

Page 13: Business Ethics Chapter 2 Ethics? What is Ethics?.

Ethics…

Ethical Theories:Egoism – An act is ethical when It promotes the best long-term Interest of the firm.Utilitarianism – The most ethical decision for the greatest good. One that promotes the best ethical conclusion without compromising the overall situation.

Page 14: Business Ethics Chapter 2 Ethics? What is Ethics?.

Ethics… Continued

Feminism – The ethics of caring. Recognizing the importance of personal relationship.Categorical Imperative – Only when we act from a sense of duty and responsibility do actions have ethical worth.Veil of Ignorance – Rational agents, unaware of their personal characteristic or places in society., choose the principles they wish to have govern everyone in society.

Page 15: Business Ethics Chapter 2 Ethics? What is Ethics?.

Kantian Ethics

A moral theory that says people owe moral duties that are based on universal rules.Based on the premise that people can use reasoning to reach ethical decisions.This theory would have people behave according to the categorical imperative:

“Do unto others as you would have them do unto you.”

Page 16: Business Ethics Chapter 2 Ethics? What is Ethics?.

Rawls’s Social Justice Theory

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.Fairness is considered the essence of justice.Rawls proposed that the least advantaged must receive special assistance to allow them to reach their potential.

Page 17: Business Ethics Chapter 2 Ethics? What is Ethics?.

Rawls’s Social Justice Theory (continued)

The principles of justice should be chosen by persons who do not yet know their station in society.This “veil of ignorance” would permit the fairest possible principles to be selected.

Page 18: Business Ethics Chapter 2 Ethics? What is Ethics?.

Ethical RelativismA moral theory that holds that individuals must decide what is ethical based on their own feelings as to what is right or wrong.There are no universal ethical rules to guide a person’s conduct.If a person meets his or her own moral standard in making a decision, no one can criticize him or her for it.“The “What Feels Good” approach to life!”

Page 19: Business Ethics Chapter 2 Ethics? What is Ethics?.

How Do You See Yourself?

Morality v. Immorality? Do you see yourself as being moral with a sense of duty and responsibility? Do you see yourself as being amoral, with a sense of knowing right from wrong, but choosing to do wrong because it meets your needs at the time of the action?

Page 20: Business Ethics Chapter 2 Ethics? What is Ethics?.

Ethics Check Questions:

Is It Legal?What are the consequences?Is It Balanced?Does it promote fairness?How Will It Make Me Feel About

Myself?Can I live with this decision?

Page 21: Business Ethics Chapter 2 Ethics? What is Ethics?.

Ruggerio’s Three common Concerns in Ethical Decision Making:

The obligations that arise from organizational relationships.The ideals involved in any decisions that are madeThe effects or consequences of alternative actions.

Page 22: Business Ethics Chapter 2 Ethics? What is Ethics?.

Amoral Personality

Being neither moral nor immoral: Lying outside the sphere to which moral judgments apply.A personality that has neither a conscience or normal fear factor.

Page 23: Business Ethics Chapter 2 Ethics? What is Ethics?.

An Amoral Personality

While leading the life of a happy family man in the New Jersey suburbs, Richard Kuklinski was also living a bizarre double-life as a Mafia hit man. Kuklisnki tells first had how he brutally murdered men at close range, dismembered and disposed of them before returning home to his family.

                      

Page 24: Business Ethics Chapter 2 Ethics? What is Ethics?.

The Iceman Tapes - Conversations with a Killer (part 2)

Page 25: Business Ethics Chapter 2 Ethics? What is Ethics?.
Page 26: Business Ethics Chapter 2 Ethics? What is Ethics?.

Moral Personality

Any actions that honor obligations while simultaneously advancing ideals and benefiting people can be presumed to be moral actions.

Page 27: Business Ethics Chapter 2 Ethics? What is Ethics?.

Ethics in Business

Fact or fiction?

Page 28: Business Ethics Chapter 2 Ethics? What is Ethics?.

Business Attitude

Caveat emptor – “Buyer Beware”Corporate Culture Influence- “Top-Down” Approach to the way business gets done. The “Game Theory” as a way of business

Bluffing Lying Cheating

Page 29: Business Ethics Chapter 2 Ethics? What is Ethics?.

ETHICAL? SLANDER? LAW SUIT Or ENTERTAINMENT?

Anderson Cooper on the Donald/Rosie Feud

Page 30: Business Ethics Chapter 2 Ethics? What is Ethics?.

“What are the sweep periods?

Sweeps are designated months during the year

when Nielsen Media Research measures all local

markets. We survey the majority of our 210 local

television markets in November, February, May

and July (Local People Meter markets, however,

are measured 365 days a year).”

Page 31: Business Ethics Chapter 2 Ethics? What is Ethics?.

YOU CAN’T BELIEVE EVERYTHING YOU SEE!

Real or not?

Page 32: Business Ethics Chapter 2 Ethics? What is Ethics?.

PBS ALTERS TRANSCRIPTS…

http://www.americanthinker.com/blog/2011/09/pbs_alters_transcript_to_hide_obama_gaffe.html

Page 33: Business Ethics Chapter 2 Ethics? What is Ethics?.

Scott Thompson apologizes; director in charge of vetting to step down

http://www.newser.com/story/145584/yahoo-board-probes-ceos-fake-resume-debacle.html

Page 34: Business Ethics Chapter 2 Ethics? What is Ethics?.

Business Scandals:

EnronAdelphia Communications

systematically and fraudulently excluded billions of dollars in liabilities from its consolidated financial statements by hiding them on the books of off-balance sheet affiliates.

Global Crossingconflict-of-interest offenses committed by a former accounting executive and scads of internal-control blunders at the company.

World ComArthur AndersenMartha Stewart

Page 35: Business Ethics Chapter 2 Ethics? What is Ethics?.

SEC Investigations (2002)Accounting

Arthur AndersenDeloitte & ToucheErnst & YoungKPMGPriceWaterhouse Coopers

EnergyCMS EnergyDynergyEnronHalliburtonReliant Resources

SoftwareComputer AssociatesNetwork Associates

TelecomGlobal CrossingLucent TechnologiesQwest CommunicationsWorldCom

Wall StreetCredit Suisse First BostonHedge FundsCapital MarketsMerrill Lynch

Source: Business Week, June 10, 2002

Page 36: Business Ethics Chapter 2 Ethics? What is Ethics?.

The Smartest Guys in the Room…

Page 37: Business Ethics Chapter 2 Ethics? What is Ethics?.

Corporate Scandal FinesCompany Fine Reason

Arthur Andersen $500,000Obstruction of Justice

Shredding Enron Documents

Citigroup $5,000,000Analyst Issued

Misleading

Information

Merrill Lynch $100,000,000

Conflict of Interest Between Investment

Bank & Research Dept.

Credit SuisseFirst Boston $100,000,000

IPO Shares Unfairly Distributed

Source: Business Week, Nov. 4, 2002

Page 38: Business Ethics Chapter 2 Ethics? What is Ethics?.

Bush Administration Policy in response to corporate wrong doing:

Sarbanes-Oxley Act of 2002Requires that chief executive officers and chief financial officers certify the accuracy of quarterly financial reports. (e.g., a signature must accompany the documents sent in as financial statements of the company.)Reports knowingly falsified could result in fines up to $1 million and incarceration for up to 10 years.

Page 39: Business Ethics Chapter 2 Ethics? What is Ethics?.

Corporate Citizenship

A theory of responsibility that says a business has a responsibility to do good.Business is responsible for helping to solve social problems.Corporations owe a duty to promote the same social goals as do individual members of society.

Page 40: Business Ethics Chapter 2 Ethics? What is Ethics?.

BP Oil Spill… 2010

Page 41: Business Ethics Chapter 2 Ethics? What is Ethics?.

BP Oil Spill

Page 42: Business Ethics Chapter 2 Ethics? What is Ethics?.

BP Clean-up

Page 43: Business Ethics Chapter 2 Ethics? What is Ethics?.

Corporate Citizenship (continued)

This theory argues that corporations owe a debt to society to make it a better place.

This duty arises because of the social power bestowed on corporations.

A major criticism of this theory is that the duty of a corporation to “do good” cannot be expanded beyond certain limits.

Page 44: Business Ethics Chapter 2 Ethics? What is Ethics?.

A Business Approach to Ethics

U.S. businesses need to develop a model or a framework of ethical behavior.Business should adopt a “synthesis” approach of revolving ethical issues. Considering “Obligations, Ideals and Effects” and it is weighed towards stakeholders, employees, customers and community.

Page 45: Business Ethics Chapter 2 Ethics? What is Ethics?.

Business Ethics

Business should establish rules and standards, but those rules and standards also need to change as society and the business environment changes.Only people, not corporations, have the power to make those changes. How does that effect you?

Page 46: Business Ethics Chapter 2 Ethics? What is Ethics?.

Video to view:

The Smartest Guys In The RoomMagnolia Home Entertainment110 minutesRated Rhttp://www.youtube.com/view_play_list?p=04BAE9B96F17CE61&search_query=enron+the+smartest+guys+in+the+room

Page 47: Business Ethics Chapter 2 Ethics? What is Ethics?.

Ethics Resource Center:

http://www.ethics.org/index.html

Page 48: Business Ethics Chapter 2 Ethics? What is Ethics?.

Ethics and Social Responsibility of Business Chapter 2

Ethics? What is Ethics?


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