Ethics & Corporate

Governance

Week 1

Slides linked to Mellahi, Morrell & Wood Book p.3-13

What is the difference between Ethics, Values

& Morals? Ethics: Doing what is good & what is bad. Values: knowing what is good & what is bad. Morals: Judgment of the goodness or badness

of a human action or character.

Introduction

Business Ethics: right/wrong, good/bad &

desirable non-desirable in business world. It’s the study of Business from an ethical point

of view. Question: profitable companies from non-

ethical businesses (e.g. counterfeit, smuggling, trafficking, tobacco, arms) they do pay back to the society, but how ethical does that make them?

Introduction

Ethical Theories

Moral Relativism It says there are no universal: Moral principles.

Morality: is a matter of customs, opinions, habits, emotions, culture, tradition. Relativism: says that we don’t really know what is good or bad.

Morality is a matter of culture or social norm or it even depend on the situation.

If someone is torturing me for a long time is it ok to kill him?

Are you Anti-Relativist? Does what is good and bad vary from society to

society, organization to organization or there is certain global relevance?

The principle or practice of unselfish concern

for or devotion to the welfare of others. It is also looked at as an Ethical Conduct..

putting someone else first.. Acting for other’s sake

Like: letting someone cross the road in-front of your car, holding the door for someone, donating blood or organ.

Opposed to Egoism!

Altruism

In Ethical Egoism it is necessary for an action to be

morally right if it maximizes one’s self interest. Ethical Egoism differ in context from standard

morality. What will “I” gain out of my actions or sacrifice? Its said: “There are Altruistic actions, but there are

always egoistic explanation for those actions”. A bank is being ethical for refusing to lend money

to a tobacco company then the bank advertise an ethical lending policy to attract more customers. How ethical is that?

Egoism:

Law Code is written and made public. The fact that an action is legally acceptable

does not make it moral. Example of that Hurwitz took over Pacific

Lumper doubled the rate of tree cutting in redwood forest to pay off the debts, his action was branded immoral :

but was legally perfect.

Legalism:

valuable/ critical/ crucial in todays turbulent:

and fast changing environment? Without a sense of community and

cooperation there would simply be no firms. Without individual and corporate virtue : to benefit society all success would be empty.

Society has a reaction against unethical business practices. For example, in marketing, towards environment, working conditions, accounting, employee treatments,

Why is Ethics Important?

There is a danger that Business Ethics is looked at

as Whitewash without real changes in conduct! Example: There is little doubts that environmental

claims for good conduct can help to sell products like wood from sustainably managed plantation which can cause thirsty trees that can disturb rainfall areas.

Business Ethics is an oxymoron: (contradiction)Why? What does it mean to you?(Firms exist to make profits, so do they really care about the society?!)

Practice & Theory

How to monitor & control managers &

employees behavior so they act ethically?Your views (perspectives/opinions) will be culturally biased: Why? How do we deal with this knowledge?

There are 3 basic approaches to studying Business

Ethics: 1) Prescriptive “formulate & defend basic moral

norms” : authoritarian??? 2) Descriptive “describe practices, moral codes &

beliefs” 3) Conceptual “analyzing ethical terms such as:

right, good, justice & virtue to distinguish between moral (fair) and immoral (unfair) managers/ employees/ customers/ suppliers / etc.

Increase happiness and decrease suffering!

What is Ethics Practice?

The business may only be acting ethically for

selfish reasons. e.g. What are your impressions/ thoughts of Unilever and their lifebuoy antibacterial soap (visit their web site) Who are they helping? Why? Who benefits?

(Take 10 minutes to come out with answers with your group)

For the next lesson: In teams of 4 students Make a 4 slide Prezi power point presentation

summarizing pages 3–13 by using pictures or 1 minute video clips.

This should take no more than 4 minutes to present to your peers, in the first lesson of next week’s class

Home Work

Ethics/ Moral norms/ Absolute right, Ethical implications Justice, Fairness, Virtue Oxymoron Culturally biased/ Cultural imperialism Altruistic Psychological egoism Utilitarianism

Vocabulary listBe sure to know these words