Title: Business Ethics Professor: Ken Butterfield. online.wsu.edu

Transcription

1 Title: Business Ethics Professor: Ken Butterfield online.wsu.edu

2 Business Ethics

3 Ethics Standards regarding appropriate / inappropriate conduct and decision making

4 Where Do Ethical Situations Occur? Human resources (e.g., diversity, terminations) Work environment (e.g., harassment) External environment (e.g., supplychain management) Customers (e.g., product safety) Ecological environment (e.g., pollution)

5 Individual Factors that Influence Ethical Decision-making Level of cognitive moral development Machiavellianism Need for power Locus of control

6 Organizational Factors that Influence Ethical Decision-making Formal mechanisms Codes of conduct Ethics committees Training programs Hotlines, Ombudsperson Informal mechanisms Peer behavior Culture (norms) Role modeling Reward systems

7 Some Ethical Decision-making Approaches Golden rule New York Times test Obey the law World like this Rights Justice

8 Utilitarian Approach Focus on consequences Greatest good for the greatest number of people Strengths Greatest good for the greatest number of people Weaknesses Difficult to define good Difficult to predict consequences Rights/justice violations Promotes ends justify the means thinking

9 Virtue Ethics - Focus on behaving in a virtuous manner (e.g., honesty, integrity, excellence) - Focus on cultivating one s character - Organizations as communities - Employees as citizens

10 Framework for making ethical decisions 1. Recognize the ethical issue 2. Get the facts 3. Evaluate your options 4. Decide which option to follow 10

11 Framework for making ethical decisions 5. Double-check decision by asking spotlight questions: New York Times Test Will my decision be implemented with the greatest care and attention to the concerns of all stakeholders? 6. Take action 7. Reflect How did my decision turn out and what have I learned from this specific situation? 11

12 Social Responsibility Management s obligation to make decisions and to take actions that enhance the welfare and interests of society as well as the organization

13 Levels of Social Responsibility Discretionary Responsibilities Ethical Responsibilities Legal Responsibilities Economic Responsibilities

14 Arguments Against Social Responsibility Milton Friedman: purpose of an organization is only to maximize profit Accountability is only to stockholders Social responsibility belongs to the government

15 Arguments for Social Responsibility Purpose of an organization goes beyond profit Accountability is to the community Social responsibility belongs to everyone Managers have no choice Bottom-line benefits Attract workers Higher demand for products Keep customers loyal

16 Arguments for Social Responsibility Consider two possible choices for your behavior: 1) Egoism: pursue your own selfinterests exclusively. 2) Benevolence:consider others welfare as well as your own.

17 Arguments for Social Responsibility Assuming that everyone has these choices, there are four possible worlds, that, from the point of view of maximizing your own welfare, might be ranked in the following order: 1) You are an egoist, everyone else is benevolent (you are a free rider) 2) Everyone is benevolent 3) Everyone is an egoist 4) You are benevolent, everyone else is an egoist (you are a sucker) Based on this assessment, from a personal welfare standpoint, no matter what others are doing, you should not be benevolent

18 Arguments for Social Responsibility The catch: Assuming that others are rational, they will reason the same way. As a result, we end up with world #3! In this situation, each of us is worse off than if we had cooperated (world #2) To escape this dilemma, we establish a social contract: enforceable rules regarding mutual respect and benevolent social living