Chapter 7 Business Ethics Fundamentals The Public s Opinion of Business Ethics o The publics view of business ethics has never been really high o Believe it is an oxymoron o National Business Ethics Survey NBES study of employees to determine what was going on within companies Reporting of observed misconduct was down Reporting bad behavior increased Retaliation against workers increased Pressure to compromise at an all time high Weak ethical cultures in companies increased Two Stand out influences the economy and the unique experiences of those using social networking at work Are the media reporting business ethics more vigorously o The media are reporting ethical problems more frequently and fervently o Investigative programs keep business ethics in the public eye and make it difficult to assess weather public opinion polls are reflecting the actual business ethics of the day or simply the reactions to the latest scandals covered Is society changing o A number of what are now called unethical practices were at one time considered to be acceptable they were happening Might not have been acceptable rather the public didn t know o The greed coming from top level executives that has been exposed in the past two decades has elevated the ethics issue to new heights Business Ethics Meaning Types Approaches o Ethics the discipline that deals with moral duty and obligation a set of moral principles or values o Morality a doctrine or system of moral conduct Moral conduct refers to principles of right wrong and fairness in behavior o Business Ethics concerned with morality and fairness in behavior actions policies and practices that take place within a business context The study of practices in organizations and a quest to determine whether these practices are acceptable or not Descriptive vs Normative Ethics o Descriptive Ethics o Normative Ethics Concerned with describing characterizing and studying the morality of people an organization a culture or a society Compares and contrasts different moral codes systems practices beliefs and values The focus is on learning what is occurring in the realm of behavior actions decisions policies and practices of business firms managers or even specific industries A danger in limiting our attention to descriptive ethics is that some people may adopt the view that if everyone is doing it it must be acceptable Concerned with supplying and justifying a coherent moral system of thinking and judging Seeks to uncover develop and justify basic moral principles that are intended to guide behavior actions and decisions Seeks to propose some principle or principles for distinguishing what is ethical from what is unethical in the business context Concerned with establishing norms or standards by which business practices might be guided or judged Can be based on moral common sense be fair honest truthful or it might require critical thinking and the pursuit of different types of ethical analysis Based on how common everyday society views business ethics today Based on ordinary common sense and prevailing practice We compare a decision practice or policy with prevailing norms of acceptability in society Relies on the use of common sense and a widely held sense of what is ethical Major challenge answering the questions whose ethical norms do we use in making the ethical judgment and what ethical norms are prevailing With respect to which norms are used as the basis for ethical judgment this approach would consider as Three Major Approaches to Business Ethics 1 Conventional Approach legitimate those norms emanating from family friends religious beliefs the local community one s employer law the profession and so on What does a person do if norms from one source conflict with norms from another source Society s culture sends us many and often conflicting messages about what is appropriate ethical behavior o Messages come from TV movies books music politics and others and don t always convey high ethical standards 2 Principles Approach Based on the use of ethics principles or guidelines to justify and direct behavior actions policies and practices 3 Ethical Tests Approach Based on short practical questions or tests to guide ethical decision making behavior and practices Ethics and The Law o The issue of ethics versus the law arises often o The law embodies notions of ethics the law may be seen as a reflection of what society thinks are minimal standards of conduct and behavior o Law reflects society s codified ethics If a person breaks a law or violates a regulation she or he is also behaving unethically o The spirit of the law often extends beyond the letter of the law and taps into the ethical dimension o The law does not address all realms in which ethical questions might be raised Making Ethical Judgments ethical o Three key elements that compose the decision of if something is We observe the decision action or practice that has taken place in the workplace setting Compare the practice with prevailing norms of acceptability Recognize that value judgments are being made by someone as to what really occurred o In the conventional approach to business ethics determinations of what is ethical and what is not require judgments to be made on at least three accounts Ethics Economics and The Law A Venn Model 1 What is the true nature of the practice behavior or decision that occurred 2 What are society s prevailing norms of acceptability 3 What value judgments are being made by someone about the practice or behavior and what are that persons perceptions of acceptable norms o The conventional approach can be valuable because we all need to be aware of and sensitive to the total environment in which we exist we need to be aware of how society regards ethical issues o The most serious danger is falling into an ethical relativism where we pick and choose which source of norms we wish to use on the basis of what will justify our current actions or maximize our freedom o The decision action or practice fulfills all three responsibilities ethical economic and legal responsibility Tells management to go for it The action is profitable in compliance with the law and represents ethical behavior o Economic and Legally Responsible Profitable and legal proceed cautiously The ethics of the action need to be carefully considered o Ethically and Economically Responsible Profitable and ethical probably legal too proceed cautiously o Ethically and Legally Responsible Legal and ethical