Business Ethics Chap 1 PDF

Ethical Business Practices In business, just as in life, reputation is everything. What takes a lifetime to build can be destroyed in an instant. In modern life, from personal matters to business to politics, we’ve seen an erosion of trust. It’s become harder to tell who is genuine and has our best...

Ethical Business Practices In business, just as in life, reputation is everything. What takes a lifetime to build can be destroyed in an instant. In modern life, from personal matters to business to politics, we’ve seen an erosion of trust. It’s become harder to tell who is genuine and has our best interests in mind, versus who is interested only in the bottom line. This is why the study of Ethics in Business is essential. With trust in short supply, it behooves us to learn as much as we can in order apply these principles in our business operations. This course will focus on the theory behind ethics, but also will delve into practical managerial, organizational, and operational aspects as well. What You’ll Learn from This Course: The interplay of psychology with ethical practices, and the most reasonable implementation of them in business decisions; Managerial strategy for keeping your team centered and ensuring fair treatment to all stakeholders; Organizational principles, in both domestic and international contexts;  Defining Ethics The Standard Definition of Ethics “A set of moral principles or values” The term “moral principles” in this definition makes it highly personal. Not ideal for a business context A Better Definition of Ethics for a Business Context “The principles, norms, and standards of conduct governing an individual or group” This definition is more relevant for what is expected of employers to establish for their employees pertaining to work-related conduct.  Morals vs. Ethics Every person is said to have a “moral Samurai in 16th Century Japan followed the Bushido, compass,” a set of personal beliefs guiding their an ethical system guiding their conduct in loyalty decision on right and wrong. and honor. Ethics Morals are… are… Shaped by culture, upbringing, and personal Defined by external codes and standards experiences; Established by professional association Influenced by religion and philosophy Focused on group behavior and practices Internal and personal Objective and consistent across all members Subjective and variable  Why Ethics are Essential for Business Why should you, as a future manager or business leader, care about being ethical? We are motivated by a combination of self-interest, and moral incentives. Human beings are hardwired to be ethical. Studies have revealed that humans act through a combination of not only self-interest, but a sense of altruism, fairness and what’s “right.” Companies that wish to retain top-talent in their field must be ethical. Beyond compensation, employees list their top requirement for their employer to be part of a “larger purpose.” From a leadership perspective, trust is “the silent business partner at every negotiation.” Deposit into your Trust Account Think of trust as a sort of liquid commodity, like money in your bank account. Over time as you make ethically sound decisions, follow through on promises, and conduct your business dealings in a sound and fair manner, you make deposits into your Trust Account. Over time, as your Trust Account fills, you will enjoy certain perks and benefits: mistakes will be forgiven, greater flexibility will be afforded to you, and day-to-day operations will fall under less scrutiny. If trust is betrayed, however, all bets are off. If trust is low, even seemingly miniscule actions must be recorded and accounted for. It’s not just overhead and administrative costs that will rise, but a number of hidden costs down the road will surface.  Ethical Dilemmas Throughout life and business, you’ll need to make decisions where there is no clear-cut right answer. In this section we’ll review some of the Ethical Dilemmas faced by everyone from private entrepreneurs to the highest levels of government. These challenges highlight why personal moral principles, or just being a good person, aren’t enough in a business context. We need to use a set of organizational principles to serve as a framework to guide us through our most difficult decisions.  Ethical Dilemmas ( 1 / 4 ) The Trolley Problem A runaway train is headed towards five TikTokkers engrossed in recording some “content” over some train tracks. The train is going to collide with them at high speed. Luckily, you are standing near a lever that will change the train’s course to avoid them. However, along this new course is a solitary YouTuber recording his opinions about which cheese is best. The train will surely hit him if you change its course? What do you do? Save the five TikTokkers at the cost of a single YouTuber, or let things play out as they are? This is the classical example of an ethical dilemma with no real ‘correct’ answer. Ethical Dilemmas ( 2 / 4 ) Profiting off a Humanitarian Crisis The value of an item is determined by whatever the market will bear. If a worldwide pandemic hits, and certain necessary items, such as hand sanitizer and toilet paper, become highly sought after and in short supply, buy them all up and sell them at a quintuple markup! This is just good business sense, especially if you’re a sociopath. Unscrupulous individuals engaging in price gouging may make a quick buck, but their reputation in their community certainly will suffer.  Ethical Dilemmas ( 3 / 4 ) Protecting Our Privacy You have a role in government concerned with national security. You discover the government has violated citizens’ fundamental rights to privacy. Do you keep doing your job, question a superior, or blow the lid off the whole thing? Whistleblowers such as Edward Snowden and Julian Assange have made the tough call to sacrifice not only their job security, but residence in their home country in the name of what is “right.” While these are extreme examples, many employees and managers find themselves choosing between protecting their livelihood, or choosing to do the right thing.  Ethical Dilemmas ( 4 / 4 ) The Human Cost of Rare Earth Metals Rare earth metals are integral to all the devices we use in our daily lives. Extracting these resources from the ground is a completely unregulated process in developing countries, who have no qualms about exploiting child labor, unsafe working conditions, and unfair pay. Faced with balancing its manufacturing costs against raw materials prices, Apple has made efforts to improve conditions for workers, and increase the amount of recycled materials it uses in future devices.  Key Takeaways The standard definition of ethics is inadequate when talking about practical matters in a business management context Morals vs. Ethics: Think of morals as a personal set of principles which may change over time. Ethics is a framework for appropriate conduct for an associative group or corporate entity Ethics are essential for business for a number of reasons include: human beings are hardwired to perceive ‘fairness,’ the best people only want to work for ethical firms, and trust is a sort of business lubricant for all levels of negotiations. Trust is a liquid commodity: it builds up slowly over time, but pays off dividends at critical junctures. Ethical dilemmas will have no clear “right” answer, and  References Trevino, Nelson, “Managing Business Ethics: Straight Talk about How to Do It Right, 8th ed.” John Wiley & Sons, 2021 Kelly, Anne “ Apple and Google named in US lawsuit over Congolese child cobalt mining deaths”https://www.theguardian.com/global- development/2019/dec/16/apple-and-google-named-in-us-lawsuit-over- congolese-child-cobalt-mining-deathsThe Guardian ,2019