mgt07 report
TRANSCRIPT
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FUNDAMENTAL PRINCIPLEOF BUSINESS ETHICSThe Role of Business Ethics
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What is Business Ethics?
a form of applied ethics or professional ethics that
examines ethical principles and moral or ethical
problems that arise in a business environment. It
applies to all aspects of business conduct and isrelevant to the conduct of individuals and entire
organizations.
also known as corporate ethics. Business ethics has both normative and descriptive
dimensions.
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Are Business Ethics Important?
Ethics are important to firms for a variety of
reasons, including the legal responsibilities of the
executives, costs of violations, and reputation.
Executives and managers are often held liable forviolations that occurred below them even if they did
not know about or condone the situation. This is a
major incentive for directors and top management
to see that their organization keeps ethical
considerations in perspective while making
decisions.
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BUSINESS ETHICS AND ITSBUSINESS ETHICS AND ITSISSUEISSUEThe Role of Business Ethics
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What does ethical mean to you?
50 percent defined ethical as what my feelings tell
me right.
25 percent defined it in religious terms as what is
in accord with my religious beliefs.
18 percent defined it as what conforms to the
golden rule.
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What is ethics?
The principles of conduct governing an individual or
a group.
The study of morality
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What is Morality?
The standard that an individual or a group has
about what is right and wrong, or good and evil.
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What is moral standards?
The norms about the kinds of actions believed to be
morally right and wrong as well as the values
placed on the kinds of objects believed to be
morally good and morally bad.
Moral norms can usually be expressed as general
rules or statements, such as always tell the truth, it
is wrong to kill innocent people, or actions areright to the extent that they produce happiness.
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According to Vandivier
We do not always live up to the moral standards we
hold; that is, we do not always do what we believe is
morally right nor do we always pursue what we
believe is morally good.
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What is Nonmoral Standards?
The standards by which we judge what is good or
bad and right or wrong in a nonmoral way.
Examples:
The standards of etiquette by which we judge manners
as good or bad
The standards of law by which we judge legal right
and wrong.
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Five Characteristics of Moral Standards
Involved with serious injuries or benefits
Not established by law or legislature
Should be preferred to other values including self-interest
Based on impartial considerations
Associated with special emotions and vocabulary
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What is Ethics?
The discipline that examines ones moral standards
or the moral standards of a society.
It is asks how these standards apply to or lives and
whether these standards are reasonable or
unreasonable.
A person starts to do ethics when he or she takes the
moral standards absorbed from family, church, andfriends.
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What is Business Ethics?
A specialized study of moral right and wrong. It
concentrates on moral standards as they apply to
business institutions, organizations, and behavior.
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What is Business Ethics?
Business organizations are the primary economic
institutions through which people in modern societies
carry on the tasks of producing and distributing
goods and services.
They provide the fundamental structures within
which the members of society combine their scarce
resources-land, labor, capital, technology-intousable goods.
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What is Business Ethics?
The most significant kinds of modern business
organizations are corporations.
Modern corporations are organizations that the law
treats immortal fictitious persons, who have the
right to sue and be sued, own and sell property,
and enter into contracts, all in their own name.
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Kinds of Ethical Issues
Systematic- social systems or institutions within which
businesses operate.
Corporate- an individual company taken as a
whole.
Individual- a particular individual or individuals
within a company and their behaviors and decisions.
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MORAL DEVELOPMENTAND REASONING
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Six identifiable stages of Morality
LEVEL ONE: PRECONVENTIONAL STAGES
Stage One: Punishment and Obedience Orientation
Stage Two: Instrumental and Relative Orientation
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Six identifiable stages of Morality
LEVEL TWO: CONVENTIONAL STAGES
Stage Three: Interpersonal Concordance Orientation
Stage Four: Law and Order Orientation
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Six identifiable stages of Morality
LEVEL THREE: POSTCONVENTIONAL, AUTONOMOUS,
OR PRINCIPLED STAGES
Stage Five: Social Contract Orientation
Stage Six: Universal Ethical Principles Orientation
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Criticisms to Kohlbergs Theory
- First, Kohlberg has been criticized for claiming that
the higher stages are morally preferable to the
lower stages.
- Second criticism of Kohlberg is one that arises from
the work of Carol Gilligan
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Carol Gilligans Theory
- Claimed two different ways to approach moral
issues.
- First, there is a male approach that kohlbergs
theory emphasizes
- Second, there is a female approach
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Moral Reasoning
Moral reasoning- the reasoning process by which
human behaviors, institutions, or policies are judged
to be in accordance with or in violation of moral
standards.
- Always involves two essential components:
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Two essential components of Moral
Reasoning
an understanding of what reasonable moral
standards require, prohibit, value, or condemn.
evidence or information that shows that a
particular person, policy, institution, or behavior hasthe kinds of features that these moral standards
require, prohibit, value, or condemn.
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The nonwhite live in America society, fight for
American society in disproportionate numbers, and
contribute cheap labor to American society, thereby
enabling others to live disproportionately well. But
the nonwhite do not share in the benefits of the
American Society in w/c they live and for w/c they
fight and to w/c they contribute.
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Analyzing Moral Reasoning
Moral reasoning must be logical
The factual evidence cited in support of a persons
judgment must be accurate, relevant, and complete.
Moral standards involved in a persons moral
reasoning must be consistent
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Objections to Bringing Ethics into
Business
Perfectly competitive free markets alone ensures
that the members of the society in the most
beneficial way.
Loyal Agents Argument
The manager has a duty to serve the employer in
whatever ways to advance the employers self-interest.
To be ethical, it is enough for business people tomerely obey the rules
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Questionable Assumptions on the
Second Objection
Again, it follows an unproved moral standards the
belief that managers should devote themselves to
the single-minded pursuit of profits
Assumption that there are no limits in the duties ofthe manager to its employer
It assumes that every action of the manager, as long
as its for the employer, is automatically justifiable
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Questionable Assumptions on the
Third Objection
It implies that ethics and laws are the same
Moral laws are sometimes incorporated into the law
however, law and morality do not always coincide. (E.g.
laws of Nazi Germany, pre-Civil War slavery laws)
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Case for Ethics in Business
Ethics SHOULD govern all voluntary human activities
business is a voluntary activity, thus it should be
governed by ethics
Business is a cooperative activity whose veryexistence requires ethical behavior
Ethics is consistent with the business pursuits, in
particular with the profit. Argument of the Prisoners Dilemma
Ethics is the key component of effective
management
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MORAL RESPONSIBILITYAND BLAME
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Moral Responsibility Requirements:
The person caused or helped cause I, or failed to
prevent it when he could and should have; and
The person did so knowing what he or she was
doing; and
The person did so of his own free will