Chapter 1 (1).pptx

Part One An Overview...

Part One An Overview of Business Ethics Chapter 1 The Importance of Business Ethics © 2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 1  Business Ethics Ethics is a part of decision making at all levels of work and management  Questions whether practices are acceptable  There are no universally accepted approaches for resolving issues © 2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 2  Business Ethics Defined Comprises organizational principles, values, and norms that may originate from individuals, organizational statements, or from the legal system that primarily guide individual and group behavior in business  Ethical decisions occur when accepted rules no longer serve and decision makers must weigh values and reach a judgment  Values and judgments play a critical role when we make ethical decisions © 2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 3  Business Ethics Defined  Morals: Refer to a person’s personal philosophies about what is right or wrong  Morals are personal and singular  Principles: Specific and pervasive boundaries for behavior that should not be violated  Human rights, freedom of speech and justice  Values: Enduring beliefs and ideals that are socially enforced  Teamwork, trust and integrity © 2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 4  Observed Misconduct In The Workplace  Misuse of company resources  Abusive behavior  Harassment  Accounting fraud  Conflicts of interest  Defective products  Bribery  Employee theft © 2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 5  Reasons for Studying Business Ethics  Having good individual morals is not enough to stop ethical misconduct  Ethics training helps provide collective agreement in diverse organizations  Business ethics decisions can be complicated  Helps to identify ethical issues when they arise and recognize the approaches available to resolve them © 2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 6  Before 1960: Ethics in Business Theological discussions of ethics emerged  Catholic social ethics were concerned with morality in business, workers’ rights, and living wages  The Protestant work ethic encouraged individuals to be frugal, work hard and attain success in the capitalistic system  These traditions provided a foundation for the future field of business ethics © 2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 7  1960s: The Rise of Social Issues in Business Social consciousness emerged  Increased anti-business sentiment  JFK’s Consumer Bill of Rights— a new era of consumerism  Right to safety, to be informed, to choose, and to be heard  Consumer protection groups fought for legislation changes  Ralph Nader © 2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 8  1970s: Business Ethics as an Emerging Field Corporate social responsibility - an organization’s obligation to maximize positive impact and minimize negative impact on stakeholders  Business Ethics no longer was an oxymoron  Businesses concerned with public image  Conferences held and centers developed © 2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 9  1980s: Consolidation  Business ethics became an acknowledged field of study and firms established ethics committees  Ethics centers provided publications, courses, conferences, and seminars © 2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 10  1990s: Institutionalization of Business Ethics Continued support for self- regulation and free trade  Health-related issues more regulated  The Federal Sentencing Guidelines for Organizations (FSGO) in 1991  Set tone for compliance  Preventative actions against misconduct: use carrot and stick approach  A company could avoid/minimize potential penalties © 2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 11  21st Century of Business Ethics Continued corporate non- compliance  Increased public/political demand for improved ethical standards  Sarbanes-Oxley Act (2002)  Increased accounting regulations © 2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 12  Organizational Ethical Culture Ethical culture: acceptable behavior as defined by the company and industry  Creates shared values and support for ethical decisions – driven by top management Goal:  Minimize need for enforced compliance  Maximize utilization of principles/ethical reasoning in difficult or new situations © 2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 13  Role of Organizational Ethics in Performance © Cengage Learning 2015 © 2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 14  Ethics Contributes to Employee Commitment Commitment comes from employees who are invested in the organization and willing to make personal sacrifices for the organization  The more company dedication to ethics, the greater the employee dedication  Concerns include a safe work environment, competitive salaries and benefits packages, and fulfillment of contractual obligations © 2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 15  Ethics Contributes to Investor Loyalty  Investors are increasingly interested in a company’s reputation and recognize how:  ethical culture provides a foundation for efficiency, productivity, and profitability  negative publicity, lawsuits, and fines threaten a company’s long-term viability  Gaining investors’ trust and confidence is vital to sustaining financial stability © 2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 16  Ethics Contributes to Customer Satisfaction  Customer satisfaction is an important factor in a successful business strategy  Companies seen to be socially responsible increase customer trust and satisfaction  Ethical conduct toward customers builds a strong competitive position shown to positively affect performance and innovation © 2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 17  Ethics Contributes to Profits  Companies need profits in order to meet their responsibilities  Ethics has moved from being a compliance standard to becoming an integral part of achieving a competitive advantage © 2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 18