psy ppt (1)

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SUBMITTED TO:- SUBMITTED BY:-

Roll no.Mrs. Shikha sharma Neera yadav (01)

Ravish kumar (02)

Satwinder singh (03)

ETHICAL

BEHAVIOUR

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Outline

y What is ethical behavior and why is it important to business?

y The ethical value proposition

y Laws, policies and ethics

y Evidence that good ethics means good business

y Is ethical behavior improving?

y Teaching ethicsthe Ethics Maturity Model

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Ethics Defined

3

y The domain of ethics is centrally concerned with human

CHARACTER (the kind of people we are) and CONDUCT(how we

relate to others)

y Three key questions comprise the focus of this domain:

1.What is good or bad for humans?

2.What constitutes right or wrong conduct?

3. How ought we to live and treat others?

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Ethical Behavior

y Conducting ones life in complete accord with a

firmly held set of values and principlesy These principles may be derived from religious beliefs,

philosophical understanding, etc.

y Application should be in all areas of ones life: personal,

family, business, social, etc.y Integrity is the consistent application of ethical

behavior.

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Foundations of Ethical Behavior

y Treat others as you would be treated

y Respect

y Honesty

y

Trust

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Taught in All Cultures

Judaism:What you hate,do not do to anyone.Islam: No one of you is a believeruntilheloves forhis brotherwhat

heloves forhimself.

Hinduism: Do nothing to thy neighborwhichthou wouldst nothavehim do to thee.

Sikhism: Treat others as you would betreated yourself.

Buddhism: Hurt not others withthat which pains thyself.

Confucius:What you do not want doneto yourself,do not do toothers.

Aristotle:We should behaveto ourfriends as we wish our friends tobehaveto us.

Plato:May I do to others as I wouldthatthey should do unto me.

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Bad Ethics Increases Transaction Costs

Party

A

Party

BTrade

Security

Lawyers

Regulators

Delays

Interest

Duplication

Testing

Etc, etc!

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Societal Costs of Unethical Behavior

1. Law enforcement and other security personnel

2. Physical protection (locks, electronic security, fences, vaults,etc.)

3. A substantial portion of attorney and court system costs

4. Some welfare costs

5. Costs of collecting taxes

6. Wasted/misused investment funds

7. A substantial portion of accounting/auditing costs

8. A large fraction of costs for regulators and examiners9. Some marketing/advertising costs

10. Costs for institutions like better business bureaus, consumerprotection agencies

11. Some costs of bankruptcy

12. Lack of investment from outside investors, tourists

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What is the Cost of Lack ofIntegrity in the US?

y Employee fraud $400 By Time theft $230 B

y Industrial espionage $200 B

y Counterfeiting $200 B

y Employee dishonesty $120 B

y Identity theft $ 50 B

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Business Costs of Unethical Behavior

1. Loss of physical assets

2. Increased costs of security

3. Loss of customersespecially those who value ethics4. Loss of employeesespecially the more ethical

5. Loss of reputation

6. Increased legal costs

7. Higher costs of debt

8. Loss of investor confidence (lower stock price, difficulty inraising funds, problems with lenders)

9. Regulatory intrusion

10. Costs of bankruptcy

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Levels of Constraints on Behavior

Ethical Behavior Tied to Set

of Values

Professional Standards

Legal Requirements

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Ethical Issues Relating to Businessy Honestycommunication and behavior consistent with

factsy Disclosure of informationy Promises/commitmentsy Laws and professional standardsy Representation of others like shareholders (applies to board

members)y Unfair competition

yRefrain from bribes and excessive gifts (that sway judgment)

y Avoid quid pro quo transactiony Comply with anti-trust laws (these relate to pricing,

monopolistic practices)y Just compensation

y Respect intellectual property (product piracy)y Treat employees fairly

y Respecting rights of othersy Treat others with fairness and respect regardless of age, religion,

ethnic group, sex, economic status, etc., especially children,women, and subordinates

y Respect the community you operate in by paying fair share ofeconomic costs you create

y Respect others and future generations by treating the

environment well

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Why Ethical Behavior Adds Value

y Better informationy Trust from investorsy Lower costs for audits, controls, investigationsy

Better allocation of resourcesy Customers will be more loyal (RCWilley example)y Lower costs from suppliers (automotive company example)y Attracting and retaining better employees

y Fair competitiony

Lowers cost of business in economyy Leads to better decision-making (do whats best for firm, not

one individual)y Improves competitive nature of a countrys economy

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Why Ethical Behavior Adds Value

y Just compensation

y Creates a more vibrant, entrepreneurial economy

y Attracts and retains better employees

y Rights of others

y Draws upon talents of wider set of individuals

y Develops long-term respect from the community (Godfrey

study)

y Maintains the environment for long-term value to all (Costa

Rica)

y Its the right thing to do!

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How Important is Integrity in a Leader?

y In a survey of 54,000 people Integritywas by far the number

one attribute desired in a leader

(Quoted in Stephen R. Coveys preface to Business with Integrity, p. xx)

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Short-Term vs. Long-Termy One party may gain temporary advantage by unethical

behavior

y Enron

y Livedoor

y Ghana Airways

y But in the long-term, individuals, companies and society arehurt

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Survey of Employees

y Most (65%) dont report ethical problems they observe

y 96% feared being accused of not being a team player

y 81% feared corrective action would not be taken anyway

y 68% feared retribution from their supervisors

Source: Society of Human Resource Management

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Deterioration in Honesty over Time

Year Year

College students who cheated in H.S. 1940 (20%) 2002 (75-98%)

Self-reported cheating 1983 (11%) 1993 (49%)

Believe cheating is common 1940 (20%) 1997 (88%)

Used cheat sheets 1969 (34%) 1989 (68%)

Let others copy work 1969 (58%) 1989 (98%)

Willing to lie to get job 2000 (28%) 2002 (39%)

Students who had stolen 2000 (35%) 2002 (38%)

(Based on several different ethics studies)

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Another Study ofStudent Honesty

yResponses 50,000 college students at 69 schools

y 26% of business majors admitted to seriouscheating on exams

y 54% admitted to cheating on written assignments

y Journalism majors were worse with 27% admitting tocheating on exams.

y The most honeststudents in the sciences (19%reported cheating on tests)

y Author observes cheating has increased since hebegan doing surveys 15 years ago

y He partly blames technologymakes it easier tocheat

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Will Our Ethics Improve?

Survey of High School Students

y 74% (71%) cheated on an exam in the last year; 45%(45%) said they did it at least twice in the last year

y 93% (92%) lied to their parents in the past year; 79%(79%) say they lied twice

y 78% (78%) have lied to their teachers

y 37% (27%) said they would lie to get a joby 38% (35%) took something from a store in the last year

Josephson (2002)(2001)

2002 2001

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Why is Dishonesty Increasing?

Modeling Labeling

Honesty

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Why Is Dishonesty Increasing?y Bad Modeling/Lack of

Good Modeling

y Makes up our news more

explicit than every Focus of TV/movies

y Dishonest leaders

y Sports, business,entertainment heroes

y Good models are rare

y Lack of PositiveLabeling

y Home.average family

spends 10 hours less timetogether a week than 20years ago

y Vocabulary of kindergartenchildren

y Schoolsy Churches

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Confession ofFraudulent Executive

y Even when put in jail, I didnt feel like a criminal. I somehow

felt we were different and I started noticing every white collar guy

I did talk to began every sentence with: all I did was. Once

youre in jail and you start feeling the animosity the otherprisoners have toward white-collar guys, where they say to you,

youre no different than us, youre just a thief, you use other

words. Even the word embezzlement is a nice wordthey said

youre a thief, you lie to people and take their money, thats what

I do to and that hit me like a ton of bricks.

Mike Morze, ZZZZ Best

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Can Ethical Values be Taught?

Level 1: The Foundation

Personal Ethical UnderstandingRight/wrong, Fairness, Honesty, Personal Integrity, Respect for Others

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Personal Ethical Understanding

y Concepts of right and wrong, fair play, respect for rights of

others, honesty, personal integrity

y Best learned in the home at an early ageand follow-up is

needed throughout life

y Institutions (churches, schools, etc.) can help

y Difficult to back fill in adulthood

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pp ca on o cs o us ness

Situations

y Fraudulent practices, misleading advertising, unfairness

y Can be taught in management education and

organizationsprovided students have a personalunderstanding of ethics

y Taught by modeling (cases and personal example arehelpful)

y Can be reinforced by policies, codes of ethics, training

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Situations

y Businesses can teach through proper modeling:

Companies also have to further strengthen ethics

management and social responsibility activities to

improve their public image

Korean Commerce-Industry-Energy Minister Lee Hee-beom

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Ethical CourageWillingness to Pay the Price for Ethics

Application of Ethics to Business SituationsFraudulent Practices,Misleading Advertising, Unfairness

Level 3: Ethical Courage


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Ethical Couragey It is not sufficient to simply understand ethical principlesy One must have the courage to pay a price for being

ethicaly Examples can be helpfulcase studies showing people

willing to stand up for ethical principlesy Again, it helps to have practiced ethical behavior over

many yearsespecially in small things

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Ethical Leadership

Helping Others to be Ethical

Ethical CourageWillingness to Pay the Price for Ethics

Application of Ethics to Business SituationsFraudulent Practices,Misleading Advertising, Unfairness

Level 4: Ethical Leadership


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Ethical Leadership

y The ability and willingness to encourage others to behaveethically

y Can be taught through cases, problem solving, study ofsuccessful organizations

y Includesy Developing an organizational climate that fosters ethical

behaviory Structuring policies that encourages ethics

y Behaving ethically while facing the pressures of leadership

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The Importance of Ethical Leadership

Swing GroupCould Go Either Way

Dishonest EmployeesPolicies Wont HelpMuch

Honest EmployeesWill be Honest Always

Ethical Leadership will significantly impact an

organization since the vast majority, in this view,

can be influenced to behave ethically.

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Importance of Ethical Leadership




Strong Ethical Leadershipinduces the middle

group to behave as if they were the honest

employees.

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Importance of Ethical Leadership




Weak Ethical Leadershippermits the middle

group to behave as if they were the dishonest

employees.

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Five Basic Ethical Principlesby Thiroux (1986)

36

y Value of Life the preserving and protecting of life (self-defense

& war). Not life at all costs rather no life should be ended

without very strong justification . . . Thus it is morally wrong to

take peoples lives against their will without great rationale and it

is also wrong to interfere with their death/dying against their

will without similar justification.

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Five Basic Ethical Principles

by Thiroux (1986)

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y Goodness or Rightness humans should attempt three things: 1)

promote goodness over badness; 2) cause no harm or badness; and 3)

prevent badness or harm. Despite theoretical differences regarding good

and right, a number of goods appear in common: life, happiness, truth,

knowledge, and freedom. Often, these are seen as essential to have a

good life.

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by Thiroux (1986)

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y Justice or Fairness because most do not live/act in isolation, peoples

actions affect one or more others. Two aspects of justice include: 1) treat

others fairly and 2) distribute goodness and badness fairly. In order to be

moral toward others it is not enough to try and be good and do right;

one must also attempt to distribute the benefits from being good and

doing right.

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by Thiroux (1986)

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y Truth-telling/honestymoral/ethical systems are relevant for all

within the group to which the system applies. Thus, the systems are

dependent upon agreement among those within the group to be

truthful and honest. This allows meaningful communication anddevelopment of trust. Exceptions may be justified to this principle

(i.e., lesser of two evils).

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by Thiroux (1986)

the first four are near absolutes but the fifth provides for

individual diversity

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y Individual Freedom individuals have rights and personal

autonomy in determining their own ethical character and conduct,

albeit limited by the other four principles.

y Applying Hamms (1985) public/social morality andprivate/personal morality dichotomy allows for Principles 1-4 as

public/social and Principle 5 as private. Thus, personal morality must

give way to social morality.

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Ethics, Ethical Behavior,

& Ethical Reasoning(group activity)

y Follow your handout (key reference sources are listed at the bottom).

y Assign a group scribe who will list group members and record your

thoughts (keep it simple ) using Group Worksheet provided.

y Choose an ethical dilemma & work through the 6 steps in

3. Ethical Reasoning: Determining the Right Things

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Ethical Behavior

APersonal & Professional Matter

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Sow a thought and reap an action;Sow an action and reap a habit;

Sow a habit and reap a character;

Sow a character and reap a destiny!

What will my legacy be?

(personally & professionally)

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Good Ethics Means

Good Business

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Questions?

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