Slide 1Law and EthicsWhy Bother With Ethics?Slide 4How to Make Ethical Decisions?Utilitarian vs. Deontological EthicsUtilitarian EthicsUtilitarian EthicsSlide 9Applying Ethics TheoryApplying Ethics TheoryApplying Ethics TheoryApplying Ethics TheoryBusiness Ethics v. CSRWhat is the purpose of a corporation?Whom should the Corporation BenefitWhom Should the Corporation Benefit?StakeholdersApplying Ethics TheoryApplying Ethics TheoryApplying Ethics TheoryWhy Should Companies Engage in CSR?Black MoneyBribery© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part. BUSINESS ETHICS AND CORPORATE SOCIAL RESPONSABILITYChapter 21/14/19 Dr. Gerlinde Berger-Walliser1© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part. Law and EthicsEthics is the study of how people ought to act.Law and ethics may not always agree...Sometimes it is ethical to commit an illegal act...And some legal acts are unethical!Examples at: https://www.youtube.com/watch?v=vcibfL2nSBQ Law dictates how to behave… Ethics are value based, personal decisions... Personal vs. business ethics... Law is enforceable, ethics is not...© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part. Why Bother With Ethics?•Why is cheating bad ?http://www.youtube.com/watch?v=UsEbf-o83fc&feature=related •Why do rules need to be followed?•How do you feel after winning based on cheating?© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part. Why Bother With Business Ethics?Why Bother With Business Ethics?https://www.youtube.com/watch?v=WRFGnDdEaKA pSociety as a whole benefits by encouraging economic competition; no one wants to compete with unfair competitors.There is little evidence that ethical behavior increases profits or that unethical behavior decreases profits… so why bother? pPeople feel better when they behave ethically.pUnethical behavior can be costly, if there is public outrage leading to a boycott.pBut needs to be taken seriously – not limited to PR campaigns© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part. How to Make Ethical Decisions?•Short examples for group discussion•Why is acting ethically often difficult? http://ethicsunwrapped.utexas.edu/video/bounded-ethicality 1. Do you think that acting ethically is just a matter of wanting to badly enough? Why or why not?2. What kinds of situational factors can you think of that might make it difficult for a well-intentioned person to always do the right thing?3. Can you think of a time when you did not live up to your own ethical standards? What caused you to depart from your own standards?4. Can you think of an example of a friend who acted unethically? Or someone in the news lately? Without making excuses for them, can you explain why they might have made bad ethical decisions even though they are generally good people?5. Do you think it’s possible to be completely rational when making ethical decisions? Why or why not?6. What needs or could to be done inside an organization (school, business, etc.) to encourage ethical behavior?© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part. Utilitarian vs. Deontological Ethics•Utilitarianism focuses on the outcome of the decision (John Stuart Mill, 1806-1873)•Deontological ethics focuses on the reason for the decision (Immanuel Kant, 1724-1804)© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part. Utilitarian Ethics •A correct decision was one that tended to maximize overall happiness and minimize overall pain.• “The result justifies the means”•Risk management and cost-benefit analyses are examples of utilitarian business practices.•Utilitarianism is, in some ways, an almost mathematical approach to ethics.© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part. Utilitarian EthicsF1: (1 ticket) x (1 unit of happiness per ticket) = 1 unit of happiness producedF2: (1 ticket) x (0 unit of happiness per ticket) = 0 unit of happiness producedOverall happiness generated = 1 unit of happinessF1: (2 tickets) x (1 unit of happiness per ticket) = 2 units of happiness producedF 2: (0 ticket) x (0 unit of happiness per ticket) = 0 unit of happiness producedOverall happiness generated = 2 units of happiness© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part. Deontological EthicsDeontological Ethics•The results are not as important as the reason for which the decision is made. •Morality is based on reason.•Human beings possess a unique dignity and no decision that treat people as commodities can be considered just, even if the decision tended to maximize overall happiness, or profit, or any other quantifiable measure.•Critics consider deontological ethics as intuitive, not based on objective criteria© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part. Applying Ethics TheoryBefore this breakthrough, HIV-positive patients were treated with a “cocktail” of medications. Although effective, the combination of drugs required patients to take several pills at a time several times per day. Alpha Company’s drug is a single pill that must be taken only twice per day. Because it is more convenient, patients are less likely to miss doses.Alpha Company has developed a new drug that is an effective treatment for HIV. It is not a cure, but it postpones the onset of AIDS indefinitely.© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part. Applying Ethics TheoryAlpha spent tens of millions of dollars developing the