vietbusethppcourse09 - part1
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MBA 6301 Business Ethics
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Learning Facilitator Charles Brewton Tennessee State University, Ph.D. The University of Memphis, M.B.A. Georgia Institute of Technology, B.S.
Text: Business Ethics Ethical Decision Making and Cases
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Course Administration Time Expectations Course Grading
Unit quizzes 24% Section Exam 1
20% Section Exam 2
20% Participation/
Discussion 15% Final Exam 21%
What can I do
What can I do to get an A?to get an A?
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One Assignment – Business Ethics
Bring in two (2) documented cases
Source: Newspaper or Internet
Subject: Violation of ethics as it relates to Vietnamese organizations
English language 5% of participation grade
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A Review of 286 AACSBMember Schools Reveals...
Required ethics course(s): 40.6% (overall) require an ethics
course 68% of private 30% public
Source: Cheryl L. Buff and Virginia Yonkers (2004) “How Will They Know Right From Wrong? A Study of Ethics in the Mission Statement and Curriculum of AACSB Undergrad. Mkt. Programs, ”Marketing Education Review, Vol. 14, #3 (Fall): 71-79.
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In a recent Wall Street Journal article, Psychology professor Steven Davis says that cheating by high school students has increased from about 20 percent in the 1940’s to 75 percent today. “Students say cheating in high school is for grades, cheating in college is for a career.”
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TWO KEY ASPECTS OF ETHICS
The first involves the ability to discern rightfrom wrong, good from evil, and proprietyfrom impropriety.
The second involves the commitment to dowhat is right, good and proper. Ethics entailsaction; it is not just a topic to mull or debate.”
(Taken from Maxwell, Ethics 101, p. 18)
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STATISTICS, STATISTICS In a recent workplace survey, 43% ofemployees admitted to having engaged in atleast one unethical act in the last year, and75% observed such an act and did nothingabout it. (John Maxwell, Ethics 101, p. 10)
Another recent survey found that 82% ofbusiness executives admitted to cheating atgolf, and 72% believed that actions in businessand golf parallel each other. (John Maxwell, Ethics 101, p. 74)
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SURVEY RESULTS ONETHICS IN THE WORKPLACE
Employees want to work for ethical companies.
57% said it was “critical” and 37% said it was “important”, a combined total of 94%.
82% said they would rather work for an ethical company at less pay than an unethical company at higher pay. This was particularly true for professional and managerial employees.
36% have left a job because they disagreed with their company’s ethical practices.
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SURVEY RESULTS ONETHICS IN THE WORKPLACE
56% say their companies embrace ethical values in their corporate culture.
However, 30% believe their companies merely follow the letter of the law and company policies.
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Principle of Employee Conduct…
10% Follow their own beliefs 40% Try to follow company policies
& rules 40% Go along with the work group 10% Take advantage if the risk is
low
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Common Unethical Acts... lying to supervisors falsifying records alcohol and drug abuse conflict of interest stealing gift/entertainment receipt in violation of
company policy 1997 Society for Human Resource Management/Ethics Resource Center, Business
Ethics Survey.
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Classification of EthicalIssues...
conflict of interest honesty and fairness communications organizational relationships
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Conflict of Interest... exists when an individual must choosewhether to advance his/her owninterests, the organization’s, or others’
examples include bribes or personalpayments, gifts, or special favorsintended to influence decision making
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What one might do for $500…
Stop going to movies for 6 months (62%)
Get a tattoo (39%) Cheat on spouse
(4%)
Source: “Anything for Money?” Business Week, August 2, 2004, p. 9. (Progressive Auto Insurance survey of 1,000 adults)
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Honesty & Fairness... following applicable laws & regulations& not knowingly harming stakeholders
Is advertising prescription drugs on TVand in magazines fair?
Are long distance information ads thatplace the cost of the call in very smallprint at the bottom of the screen fair?
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Do Animals Recognize Fairness?
Research shows people, dogs & monkeys recognize inequities
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Communications... refers to the transmission of informationand the sharing of meaning
examples: deceptive advertising, product safety information, & product composition
Are health foods and medicinal supplements using ‘puffery’ in their advertising?
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Organizational Relationships... behavior of organizational memberstoward stakeholders
includes confidentiality, meetingobligations & deadlines, not
pressuringothers to behave unethically
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What is Ethics? A system of moral principles, rules and standards
of conduct With regard to professions, a code of professional
standards, containing aspects of fairness and duty to the profession and the general public
System or code of morals of a particular religion, group, or profession
The branch of philosophy that deals with issues of right and wrong in human affairs
Personal code of conduct based on respect for one's self, others, and one’s surroundings
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Universal Human Values
Love Truthfulness Fairness Freedom Unity Tolerance Responsibility Respect for Life
Rushmore Kidder, The Futurist, 8/94
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What is Business Ethics?
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General Business Ethics Philosophy of Business
If to maximize the returns to its shareholders, then it should be seen as unethical for a company to consider the interests and rights of anyone else.
Corporate social responsibility Relations between different companies Political contributions Corporate governance.
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Business Ethics
Business Ethics is that branch of ethics that examines:
Ethical rules and principles within a commercial context
The various moral or ethical problems that can arise in a business setting
Any special duties and obligations that apply to persons who are engaged in commerce
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What is business ethics?(a managerial perspective) defining appropriate behavior establishing organizational values nurturing individual responsibility providing leadership & oversight relating decisions to stakeholder interests developing accountability relating consequences auditing & improvement
Copyright O.C. Ferrell; March 2005
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Two Characteristics
Tells people what they ought to do
Set of principles or rules
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Relativism
Egoism
Utilitarianism
Deontologism
TheThe 44 ConceptsConcepts ofof EthicsEthics
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Concepts of Ethics Developed by moral philosophers
over generations
Used to distinguish ethical from unethical behavior
Each has problems
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Relativism There is no universal standard by
which morality can be judged What is correct for one society
may be wrong for another Ethics and morality are relative
What do you think of this?
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Relativism - Problems There are no absolutes - murder,
slavery, torture, rape OK Leads to conclusion - each
person’s opinion is correct Nothing that anyone does is
morally wrong
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Egoism One ought to act in his or her own
self interest Ethical behavior is that which
promotes one’s own self interest Does not mean should not obey
laws - only do so if in self interest
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Egoism What do you think
of this concept?
Typical Problem - OK to dump toxic wastes as long as don’t get caught
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Utilitarianism The morality of an action can be
determined by its consequences
An action is ethical if it promotes the greatest good for the greatest number
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What do you think of this concept?
How do you quantify benefits and costs?
How do you value benefits and costs?
Can lead to unjust consequences Restrictions against the majority to
protect a minority is not utilitarian
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Utilitarianism Example Harry Truman
and Decision to Drop Bomb on Japan
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Deontologism Derived from the Greek word for
Duty Actions are not justified by their
consequences. the act may be considered the right
thing to do even if it produces a bad consequence
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Deontology Example Allow or assist
suicide for someone suffering from incurable painful disease
Execution of convicted murderers
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Utilitarianism Vs. Deontologism
Utilitarianism - The ends justify the means
Deontologism - It is the means which are important
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Business ethics is not likely to succeed as deontological (duty bound) ethics
Has to be based on the utilitarian concept of “greatest happiness or good (and goods too) for the greatest number”(and for the longest possible time)
Upholds the principles of equitable (fair) and consistent distribution of resources and profit among different stakeholders
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COMMON RATIONALIZATIONSIN ETHICS DECISIONS
1. If it’s necessary, it’s ethical.2. If it’s legally permissible, it’s
ethically proper.3. I’m overworked and underpaid, so
“I’ve got it coming.”4. It’s all for a good cause.5. I was just doing it for you.
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COMMON RATIONALIZATIONS
IN ETHICS DECISIONS
6. I’m just fighting fire with fire.7. It doesn’t hurt anyone.8. Everyone’s doing it
(universalism).9. It’s O.K. since I’m not gaining
anything personally.
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Ethical Tests
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5 Ethical Tests
1. Is It Legal?I Ethical - Legal
II Ethical - Illegal III Unethical - Legal IV
Unethical - IllegalI and IV EasyII and III Difficult
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Ethical Tests2. Benefits Cost Test
Do the benefits exceed the costs to whomsoever they accrue?
3. Equitable & Fair Test Are you willing to allow everyone
to practice the proposed action or do you want to be a special case?
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Ethical Tests
4. Light of Day TestWhat would be your reaction if
the action were brought out into the open for public scrutiny?
5. Do Unto Others TestGolden Rule - If you would like
others to do the same to you
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Ethical Tests
6. Ventilation TestSeek out others views. Discuss the 5 tests with
them. If others feel it is OK - passes the test
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Examples Robbing a Bank
Driving Above the Speed Limit
Cheating on an Exam
Having Sex with an Intern
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Ethical Dilemmas in Business
Conflict of InterestHave two interests - cannot
pursue one without having negative impact on other
Two Types Private Interest Conflicts with
CorporateBusiness Interest Conflicts with
Public
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Conflict of Interest Mini-Case Personnel Director Brother - in - law out of work Lackluster performer Unemployment about to run out - will
lose house Sister asks you to recommend him
for job What would you do?
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Whistleblowing Act of disclosing wrongdoing in an
organization Like blowing a whistle to call
attention to a thief Types
Internal External
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Can Cause Bitterness in Organization
Dissent - Must speak out against others in organization
Breach of Loyalty - Perceived as one who violates confidentiality and loyalty
Accusation - Singles out specific individuals as threats to organization or the public
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Possible Retaliation Fired Blacklisted Transferred to undesirable locations Lifestyles, sex lives and mental
stability questioned Physical abuse and murder possible
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Failure to Reveal Wrongdoing Severe problems for society or
organization
Can be implicated as an accessory before or after the fact
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Ethics of Whistleblowing When is it ethical to reveal
wrongdoing ?
When is it ethical to remain silent?
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Whistleblowing Mini-case In charge of Quality
Control Company makes parts for
automobile brakes Find defect in brake part Could cause failure in
brakes Failure not certain May take many years to
develop case
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Whistleblowing Example (cont.)
Go to VP of Production, your boss
He tells you to overlook defect - company may lose too much money
What would you do?
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Cautious Approach to Whistleblowing
1. Make sure situation involves an imminent threat to society or to the
business2. Document all allegations3. Examine internal whistleblowing
first4. Should you remain anonymous?5. Get another job first!!!
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Case: Ford PintoThe Use of Risk/Benefit Analysis Faulty gas tank placement People die in gas tank explosions $11/car to change design 180 less deaths predicted $137 million to change design vs
$49.5 million in wrongful death payouts
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1972 Ford Pinto Runabout
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Ford Pinto (cont’d) Several Reasons not to use benefit analysis
Unethical to allow people to die ? Negative publicity
Arguments in favor of using benefit analysis Existing case law Encourages precautions & safety Provides precedent for other companies to follow
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Bribery A payment, usually to a public
official, to induce that person to either do something improper or to influence decisions or actions
Extortion - same as bribery - recipient of payment initiates transaction
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Mini-Case Bribery International consulting firm - designs
and supervises construction of hydroelectric power generating systems
Your proposal is far superior to any other Technically lowest bid
To get job, must deposit $250,000 in official’s personal Swiss bank account
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Should you pay the money? Foreign Corrupt Practices Act of
1997 Grease payment allowed Standard Practice in most foreign
countries Results in lost business
opportunities for US companies
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Mini-Case: Bluffing and Deception
Negotiating a labor contract Plant has experienced losses over
past several years - not clear why Want concessions from labor Tell labor that plant will be closed if
no concessions are made. In reality , no such plans contemplated
Is This Ethical?
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Case: Polaroid in and Out of South Africa
Apartheid System 17% White 70% African Whites only could be in
government, possess firearms Enforced segregation of races Blacks relegated to “native
reserves”
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Apartheid (cont.) Blacks allowed to own 13% of land Whites - 87% Black workers paid less than
Whites
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US Involvement in South Africa
320 American companies there American companies controlled
43% of petroleum market 23% of auto sales 70 percent of computer business
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Polaroid Rumors that products used in Pass Book
System Sent 4 US employees to South Africa –
1970 No sales to government
Improve salaries for Blacks for local distributors and suppliers
Training program so Blacks could take better jobs
Some profits for Black education
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Success of Program Improvements in Black salaries,
advancement and benefits Principle of same pay for same job
accepted Ban on direct sales successful Ban on indirect sales not successful
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Sales to Government through Frank and Hirsch Secretly selling Polaroid products
to government Billed as shipments through
drugstore in Johannesburg Polaroid terminated its
involvement in South Africa - 1977
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Ethical Questions What is the ethics of American
companies doing business in a country with human rights abuses?
Was Polaroid responsible for the use of its products?
Are companies responsible for the use of their products?
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Ethical Questions Was Polaroid’s presence a positive
or negative influence on Blacks?
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