Business Law Today Text and Summarized Cases 10th Ed Diverse Ethical Online and Global Environment pixdeluxe iStockphoto com Roger LeRoy Miller Gaylord Jentz Chapter 7 Ethics and Business Decision Making 2014 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 BUSINESS ETHICS Ethics is the study of right and wrong behavior whether an action is fair right or just In business ethical decisions are the application of moral and ethical principles to the marketplace and workplace 2014 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 Why Is Business Ethics Important Directors and Officers owe a complex set of ethical duties to their stakeholders internal and external When these duties conflict ethical dilemmas are created 2014 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 The Moral Minimum Normally considered as mere compliance with the law Just because an action is legal does not mean it is necessarily ethical and vice versa 2014 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 BUSINESS ETHICS Short Run Profit Maximization Some argue a businesses only goal should be to maximize profit But executives need to distinguish between shortterm and long term maximization Case 7 1 page 191 2014 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 BUSINESS ETHICS Importance of Ethical Leadership Managers must apply the same standards to themselves Attitude of Top Management Behavior of Owners and Managers 2014 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 BUSINESS ETHICS Creating Ethical Codes of Conduct Creating an ethical code of conduct is one of the most effective ways to promote ethical behavior in an organization Providing Employee Ethics Training Sarbanes Oxley and Web Based reporting systems EthicsPoint 2014 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 APPROACHES TO ETHICAL REASONING Duty Based Ethics derived from religious and philosophical principles Religious Ethical Standards The Principle of Rights 2014 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 PRINCIPLE OF RIGHTS Belief that every duty gives rise to a corresponding right deeply embedded in Western culture Ethicality of an action is judged by how the consequences of the action will affect the rights of others 2014 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 OUTCOME BASED ETHICS UTILITARIANISM An action is ethical based on whether it produces the greatest good for the greatest number of people upon which it has an effect If it affects the majority adversely it is morally wrong 2014 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 OUTCOME BASED ETHICS UTILITARIANISM Applying the utilitarian theory requires Determination of individuals affected Cost Benefit analysis and Choice among alternative actions 2014 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 CORPORATE SOCIAL RESPONSIBILITY CSR is the idea that those who manage corporations should be accountable to society for their actions Stakeholder Approach corporations have a duty not only to shareholders but other groups stakeholders affected by corporate actions 2014 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 CORPORATE SOCIAL RESPONSIBILITY Corporate Citizenship promote goals that society considers worthwhile and take positive steps towards solving problems 2014 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 MAKING ETHICAL BUSINESS DECISIONS George S May company has provided six guidelines The law Rules and procedures Values Conscience Promises Heroes role models 2014 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 PRACTICAL SOLUTIONS TO CORPORATE ETHICS QUESTIONS Corporate Ethics us has devised a procedure Inquiry Discussion Decision Justification Evaluation 2014 Cengage