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1
1
Objectives
1. To distinguish between ethical/unethical
and legal/illegal business practices.
2. To relate the ethical decision-making
process to business situations.
3. To examine ethical considerations of
technology and workplace politics.
4. To relate the historical impact of unethical
practices and government regulations.
2
Main Menu
• Introduction to Business Ethics
• The Ethical Decision-Making Process
• Ethics: Then & Now
• Legislative Acts Affecting
Business Ethics
3
Introduction to
Business Ethics
4
Business Ethics
• Are defined as:
– professional standards of conduct, based on
moral principles and values, guiding decision-
making processes and actions
• Are defined by:
– the employer in a “Code of Ethics” or in an
employee manual
5
Ethical vs. Legal Choices
• Ethical choices are made based on moral
principles and values
• Legal choices are made according to law
• Choices can be legal, yet still be unethical
• For example:
– Is telling a lie illegal? Is it unethical?
– Is using company e-mail for personal use
illegal? Is it unethical?
6
Examples of Unethical
Business Practices
• Discrimination
• Workplace harassment
• Confidentiality breaches
• Unfair treatment of staff
• Personal use of company property
• Inaccurate maintenance of records
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Reasons for Unethical
Business Practices
• Low morale or lack of care for company
• Desire to succeed or advance career
• Extreme pressure to meet schedules and
deadlines
• Unrealistic earning expectations set by
upper management
• Inadequate training, background or
explanation of company policy
• Desire to steal from or harm company
8
Effects of Unethical
Business Practices
• On businesses:
– decrease in profits and drop in stock value
– increase in legal proceedings
• On employees:
– decrease in loyalty and faith in company
– decrease in employee morale and job satisfaction
– decrease in retirement benefits based on stock
• On consumers:
– decrease in confidence in company
– increase in prices9
Confidentiality
• Occurs when information relating to a
company, product or person is not
available or disclosed to unauthorized
individuals
• Examples of confidential information found
in the workplace include:– research and production of new products or
services
– employee records
– customer/client records
10
Workplace Politics
• Are “games” played in a workplace
environment– attempt to achieve status, advancement and
money
– majority are unethical
• Are found in every organization
• Are impossible for people within
the organization to avoid
• For example:– stealing ideas from colleagues and presenting
them as your own for a raise or promotion
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Workplace Politics
• Should be dealt with by remembering and
abiding by your moral principles and
values
• Are often addressed in a company’s “Code
of Ethics” or employee manual and should
never break company policies to remain
ethical
12
The Ethical
Decision-Making
Process
13
Ethical Decision-Making Process
1. Define the problem
2. List all possible alternatives and the
consequences of each
3. Select the best choice
4. Act on your decision
5. Evaluate your decision
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Step 1: Define the Problem
• Devise an accurate problem definition
– exclude irrelevant and unimportant
information
• Be as exact as possible
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Step 2: List All
Alternatives & Consequences
• List the alternatives and consequences of each decision
• Include at least three alternatives• Ask yourself the following questions about
each alternative:– Is it legal?– Does it fit company values?– Does it fit my personal values?– Who will be affected?– How will it look if it makes the news?
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Step 3: Select the Best Choice
• Review alternatives and consequences
• Select the most appropriate alternative
based on the following:
– benefits the most people
– benefits the company
– maintains moral principles and values
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Step 4: Act On Your Decision
• Be confident in your choice
• Take action!
18
Step 5: Evaluate Your Decision
• Reflect on your decision and the
implications it has on the following:
– the company
– yourself
– others involved
• Repeat the process if it is
not the best decision
19
Ethics: Then & Now
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Technology Advances in the
Workplace• Include the following:
– Internet networks
– telecommuting
– cellular phones
– robots
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Technology Advances in the
Workplace• Raise ethical issues, such as:
– privacy and confidentiality breaches
– using company property for personal use
– ownership disputes about electronic
information
22
Business ethics
development:• established codes
of conduct and
value statements
• social responsibility
movement
• addressed ethics
through legal or
personnel
departments
Business Ethics Timeline: 1960s
Ethical climate:• social unrest• anti-war sentiment• adversarial
employee/ management relationship
• values shifted away from loyalty to an employer and toward loyalty to ideals
• old values cast aside
www.ethics.org
Ethical
dilemmas:• environmental
issues
• increased
employee/
employer
tension
• civil rights issues
• honesty
• work ethic
changes
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Business Ethics Timeline: 1970s
Ethical climate:• major industries
riddled by scandal
• economic recession
• unemployment escalated
• heightened environmental concerns
• public pushed for corporate accountability
www.ethics.org
Ethical dilemmas:• employee militancy
(employee vs.
management
mentality)
• human rights
(forced labor, sub-
standard wages,
unsafe practices)
• some corporations
chose to cover
rather than correct
problems
Business ethics
development:• ERC founded
• Federal Corrupt
Practices Act
passed in 1977
• increased
compliance with
laws
• ethics moved
from compliance
orientation to
values-centered
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Business ethics
development:• U.S. Code of
Ethics for
Government
Service - 1980
• ERC forms first
business ethics
office at General
Dynamics - 1985
• Defense Industry
Initiative - 1986
• False Claims Act
Business Ethics Timeline: 1980s
Ethical climate:• employer/
employee social contract redefined
• defense contractors conformed to stricter rules
• corporations downsized
• loyalty toward employer eroded
• healthcare emphasized
www.ethics.org
Ethical
dilemmas:• bribes and illegal
contracting
• influence
peddling
• deceptive
advertising
• financial fraud
(savings and
loan scandal)
• transparency
issues
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Business ethics
development:• federal sentencing
guidelines - 1991
• Global Sullivan
Principles - 1999
• IGs requiring
voluntary
disclosure
• ERC established
international
business ethics
centers
Business Ethics Timeline: 1990s
Ethical climate:• global expansion
brought new
ethical challenges
• major concerns
about child labor,
bribes and
environmental
issues
• birth of the Internet
• cultural borders
challenged
www.ethics.org
Ethical
dilemmas:• unsafe working
conditions in
third-world
countries
• increased
corporate liability
for personal
damages
• financial
mismanagement
and fraud
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Business ethics
development:• multinationals made
rules
• anti-corruption
efforts grew
• rules enacted by
Non-governmental
Organizations
affected business
• corporate social
responsibility
emphasized
Business Ethics Timeline: 2000s
Ethical climate:• unprecedented
economic growth• digital economy
opened borders• personal data sold
openly• e-commerce
posed new ethical problems
• hackers plague businesses and government agencies
www.ethics.org
Ethical
dilemmas:• cyber crime
• privacy issues
• product quality
• international
financial fraud
• loss of privacy
• employees
versus
employers
• intellectual
property theft
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Legislative Acts
Affecting Business
Ethics
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Legislative Acts
• Protect employees from unethical
business practices
– The Fair Labor Standards Act of 1938
– The Equal Pay Act of 1963
– Title VII of the Civil Rights Act of 1964
– The Age Discrimination in Employment Act of
1967
– The Americans with Disabilities Act of 1990,
Title I and V
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Legislative Acts
• The Fair Labor Standards Act of 1938– requires one and a half times the regular rate
of pay for more than 40 hours worked for qualified employees
– establishes the minimum wage rate– restricts working hours for youth less than 16
years of age– lists hazardous occupations too dangerous for
young workers– prohibits pay discrimination on the basis of
sex
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Legislative Acts
• The Equal Pay Act of 1963
– prohibits sex-based wage discrimination
paying men and women who share similar
responsibilities within the same establishment
different wages based on their sex
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Legislative Acts
• Title VII of the Civil Rights Act of 1964
– prohibits employment discrimination based on
color, religion, sex and national origin
– includes sexual harassment as a form of sex
discrimination
sexual harassment is unwelcomed conduct of a
sexual nature occurring in the workplace
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Legislative Acts
• The Age Discrimination in Employment
Act of 1967
– prohibits employment discrimination toward
persons 40 years of age or older
– applies to companies with 15
or more employees
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Legislative Acts
• The Americans with Disabilities Act of
1990, Titles I and V
– prohibits employment discrimination toward
qualified individuals with disabilities
– applies to companies with
15 or more employees
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Legislative Acts
• The Family and Medical Leave Act of 1993
– provides 12 weeks of unpaid, job-protected
leave per year, while maintaining group health
benefits
– applies to companies who employ 50 or more
employees for 20 weeks out of the current or
preceding year
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Legislative Acts
• The Family and Medical Leave Act of 1993
– is applicable to employees in the following
situations:
during birth and care of a newborn child
after placement of an adopted or foster care child
when caring for an immediate family member
(spouse, child, sibling or parent) with a serious
medical condition
when unable to work because of a serious
medical condition
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Resources
Center for Ethics and Business at Loyola Marymount University – Oct. 18, 2002 http://www.ethicsandbusiness.org
E-center for Business Ethics at Colorado State University – October 18,2002 http://e-businessethics.com
Ethics Resource Center – Nov. 13, 2002 http://ethics.org
Markkula Center for Applied Ethics – Nov. 25, 2002 http://www.wcu.edu/ethics/
The U.S. Equal Employment Opportunity Commission –Nov. 13,2002 www.eeoc.gov
©MMIV
CEV Multimedia, Ltd. 37
Acknowledgements
Krista Scott - Production Coordinator
Jennifer Donaldson - Graphics Editor
Jessica Odom - Technical Writer
Geoff Scott - Production Manager
G.W. Davis – Executive Producer
©MMIV
CEV Multimedia, Ltd.38
