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Ethics - 1
Key Definitions
Moral:“relating to principles of right
and wrong” Ethics: “the discipline of dealing with
what is good and bad and with moral duty and obligation”
Ethics - 2
Study of Ethics
Process of determining what is and is not a reasonable standard of moral conduct.
Process of problem-solving to resolve situations in which there is actual or potential harm to an individual or group.
Ethics - 3
BUSINESS ETHICS
The study of morality as applied to business
Aims at developing reasonable moral standards for business conduct
Ethics - 4
STAGES OF MORAL DEVELOPMENT
Lawrence Kohlberg
Preconventional – Self1. Obey or Pay2. Self-Satisfaction
Conventional – Group3. Group Approval 4. Law and Order
Postconventional – Universe 5. Standards of Society 6. Logical Moral Principles
Ethics - 5
BUSINESS ETHICSLevels of Analysis
Individual– Role of individual– Impact on individual
Organizational– Impact of organization– Decisions, policies, structures
Systemic– Social systems– Economic and political institutions
Ethics - 6
Stakeholder Analysis
Any individual, group or item that can affect or is affected by an organization’s decisions.
FirmInvestors
Competitors
Employees
Media
Labor Unions
Government
Suppliers
Environmentalists
CreditorsFinancial
Community
Ethics - 7
APPROACHES TO MORAL REASONING
Utilitarianism– Examines net welfare produced for all
stakeholders
Rights– Emphasizes rights and duties of stakeholders
Justice– Focuses on fair processes and equitable
distribution of the benefits and burdens imposed by an action or policy on stakeholders
Ethics - 8
UTILIARIANISM CRITERIA
“Greatest Good for the Greatest Number”
1. Identify alternatives
2. Determine costs and benefits of each alternative for each primary stakeholder
3. Select alternative that produces greatest net good for greatest number of stakeholders
Which one do I choose???
Ethics - 9
RIGHTS APPROACH
“Action is correct if it respects the rights of stakeholders affected by the action”
Moral entitlements by virtue of being human
Rights independent of being members of social institutions
Ethics - 10
RIGHTS APPROACHMoral Duties
Duty Not to Interfere
Duty to Protect Rights
Ethics - 11
JUSTICE APPROACH
Equal Treatment– Stakeholders treated the same except when
they differ in relevant ways
Consistent Administration of Rules– Policies and procedures, job descriptions, salary
negotiations should be administered fairly and evenhandedly
Restitution– People should be accountable for injustices they
commit except for those which are uncontrollable
Ethics - 12
LOGICAL APPROACHMoral Decision Making
What are the facts? What are the ethical issues? Who are the primary stakeholders? What are the alternatives? What are the practical constraints? What actions should be taken?
Ethics - 13
MISCONCEPTIONS ABOUT BUSINESS ETHICS
Business ethics = an oxymoron
Proper ethical analysis = clear cut solutions
Ethics = Legal compliance
Ethical analysis = an “ivory tower” approach
Good ethics = good “business”