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BCOR 380: Exam 2
Business Ethics
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The study of how to properly use one's economic and professional power with integrity
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Kohlberg's Three Stages of Moral Development:
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Level 1: Pre-Conventional
Level 2: Conventional
Level 3: Post-Conventional
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Kohlberg's Three Stages of Moral Development: Level 1Pre-Conventional
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Stage 1: Punishment & Obedience Orientation
Rule: punishment is to be avoided
Stage 2: Individualism, Instrumentalism, & Exchange
Rule: my needs are to be satisfied
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Kohlberg's Three Stages of Moral Development: Level 2Conventional
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Stage 3: "Good Boy-Nice Girl" Orientation
Rule: my family members are to be pleased
Stage 4: Law & Order Orientation
Rule: I am to conduct myself in a way which allows me to be accepted by my society.
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Kohlberg's Three Stages of Moral Development: Level 3Post-Conventional
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Stage 5: Social-Contract Legalistic Orientation
Rule: I need to look beyond the values of my immediate society for higher concepts of right and wrong
Stage 6: Universal Ethical Principle Orientation
Rule: There are universally true ethical principles that I can accept as the foundation of my worldview
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How does Kohlberg's philosophy of ethical reasoning relate to the workplace? (Pre-Conventional)
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Kohlberg's _____ Reasoning is expressed through those workplace attitudes based on justifying self-serving ends on a basis other than the interest of others.
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How does Kohlberg's philosophy of ethical reasoning relate to the workplace? (Conventional)
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Kohlberg's _____ Reasoning is expressed through those workplace attitudes that look to do the right thing when an ethical dilemma arises.
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How does Kohlberg's philosophy of ethical reasoning relate to the workplace? (Post-Conventional)
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Kohlberg's _____ Reasoning is expressed through those workplace attitudes that take a proactive approach to maintaining fairness to all involved.
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Solipsism
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the view that I alone exist (the ultimate self-centeredness)
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Ethical Solipsism
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the view that I alone am important
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Kohlberg's model assumes that we are all born as ____________.
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self-centered individuals
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Self-righteousness
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To define one's moral or ethical ground using only one's own opinions.
(Though one's own basic beliefs might coincide with the basic beliefs of others, the thinking process is entirely inward.)
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Ethics
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The study of integrity
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Integrity
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The integration of self-discipline, moral judgment, lawfulness, ethical judgment and high personal standards into an actualized code of conduct providing for the rights of one's self and others.
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The four sets of rules
framing integrity
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1.) Mind - Self Discipline
2.) Member - Moral judgment
3.) Citizen - Lawfulness
4.) Professional - Ethical judgment
5.) Universal Principles - Virtue
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The four sets of rules
framing integrity (1. Mind-Self Discipline) How should the self relate to the self?
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In most behavioral theories the self begins with a sense of pure entitlement, pure right, and matures to recognize that their rights must interface with the rights of others.
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Self-right
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Entitlements widely recognized as properly belonging to every person.
(Views on self-right vary widely. FDR's Four Freedoms speech of Jan. 6, 1941 and Maslow's hierarchy of needs theory are two of the better known perspectives.)
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Self-right as a
Philosophical Ground for Ethics
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In this perspective, ethicists see all moral judgment as ultimately serving the fundamental rights (human rights) of individuals.
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Ethical Ground
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A set of principles, virtues, and values governing behavior which can be held as incontestably acceptable to others as well as yourself.
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Six Fundamental Rights as a Philosophical Ground for Ethics
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1) Freedom from suffering
2) Freedom from fear
3) Freedom from discrimination
4) Freedom from suppression
5) Freedom from injustice
6) Freedom from ignorance
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Six Fundamental Rights as a Philosophical Ground for Ethics: Freedom from suffering
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Freedom from suffering (e.g. the right to health care, food, & shelter - freedom from pain) Maslow's physiological needs
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Six Fundamental Rights as a Philosophical Ground for Ethics: Freedom from fear
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(e.g. the right to a sense of security of person, property, and fair reputation - freedom from worry) Maslow's security need
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Six Fundamental Rights as a Philosophical Ground for Ethics: Freedom from discrimination
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(e.g. the right to equal education and equal opportunity) - Maslow's acceptance need
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Six Fundamental Rights as a Philosophical Ground for Ethics: Freedom from Suppression
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(e.g. the right to health care, food, & shelter - freedom from pain) Maslow's physiological needs
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Six Fundamental Rights as a Philosophical Ground for Ethics: Freedom from injustice
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(e.g. the right to due process, fair taxation, and a fair economy)
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Six Fundamental Rights as a Philosophical Ground for Ethics: Freedom from ignorance
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(e.g. the right to a basic education - right-to-know laws) honesty
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Human Rights: Entitlements
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things that one may properly claim as due.
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The ground for human rights is in
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State of Nature Rights
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State of Nature Rights
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Those things that one would have were there no government.
(life - liberty - pursuit of happiness)
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Progressivism
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A socio-political movement to expand the list of entitlements.
This began in the United States in the early 1800's as a movement to create a free education for all.
(Its other fruits: an end to slavery and segregation, a women's right to vote, an end to the draft, GL rights to marry, free phones, free healthcare... Next?)
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The Problem of Right
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All rights, even state of nature rights, can only exist if granted by a provider.
An antelope that can't outrun a lion has no right to life. Its body must provide the right.
(Why is it that Americans have the right to a phone but no right to live to the age of 125? - You can only provide phones.)
For every right there exists a responsibility without which the right cannot exist.
If your body cannot meet its responsibility to provide breathing, you die.
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1. The three providers of rights- nature (the world)
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rules of natural selection (natural strengths and instincts)
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2. The three providers of rights- the self
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rules of self discipline
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3. The three providers of rights- humanity
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Humanity
a. Family, friends & community - the rules of morality
b. Professions and businesses - the rules of ethics
c. Government - the rules of law
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Provider
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Any entity which produces a good
(Services are goods in the sense
a good is defined here.)
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End-in-itself
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a person, something which desires goods but is not a good itself
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The three major classes of human (social) providers
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1. Free market entities (Aristotle)
2. "Forced" market entities (Goods and services the law requires purchased)
3. Mixed Market Associations (Universities)
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Aristotle's interpretation of friendship
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[Free market] provider relationships form the ground for human bonding
(In his ethics, unethical behavior breaks down human bonding)
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The idea, that one's ethical ground is based on the learning of behaviors that foster the provision of things we need and want has its roots in....
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The Nicomachean
Ethics of Aristotle
[Ethics is pragmatic]
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The basis for all rights is the principle that:
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If a need exists, then it should be met.
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As persons, we basically have five ways of being in the world.
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[1. Body - our needs arise from our DNA, this creates our needs]
2. Mind controls the body through rules of self discipline
3. Member (family - friends - faith - organization)
4. Citizen
5. Professional
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As a person, we first meet our rights as _____. Our instincts program us to see the fulfillment of these needs as our entitlement, ergo (therefore) rights.
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Needs
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How our basic rights relate to basic needs created by our genetic make-up as humans: Freedom from suffering
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The need for pleasure - Our sense organs feel pain and internal discomforts called "pangs". Our genetic code uses both to prod us to do its bidding. These pangs drive is to drink water, find food, sleep, mate and so forth.
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Libido
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Instinctive urges that drive us to fulfill physiological needs, seeking pleasure as opposed to pain.
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Hedonism
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the view that pleasure and happiness are the highest goods
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Epicurism
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The view the purpose of life is to serve the self with good health, refined living, and longevity
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Maximalism
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the view that any proper action is worthy of being carried out to its fullest extent
(the doctrine of this is often tied to hedonism and extreme entitlement.)
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Friedrich Nietzsche's
The Birth of Tragedy
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This invites us to consider humanity as being eternally torn between two extremes, the maximally hedonistic Dionysian and the maximally pure and idealistic Apollonian (He argued that where one is, the other is always destroyed.)
Parties are essentially exercises in hedonism while universities are, in their mission, pure and idealistic.
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Practical Values
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These are things that enjoyed because they serve the wants of our DNA
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Abstract Values
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These are things that can be enjoyed but contribute nothing to the wants of our DNA
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Pure Entitlement
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-The view held by most living things that their ability to acquire fully defines what is rightfully theirs
-Said otherwise
I may engage in any activity where the reward exceeds the cost
-This leads to the idea that one can do anything at which they can't be caught and if caught, can't be proven guilty in a court of law.
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The primitive instinct of pure entitlement is
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socially destructive, driving malingering, unethical business practices, crime, and even wars. Humanity's device for overcoming extreme entitlement has been given many names: morality, honor, virtue, decency, integrity, maturity, and professionalism are but a few.
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Malingering
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The pretending by adults to be incapacitated so as to acquire rights without the bother of responsibility
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Revenge
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-The primitive response to the feeling of frustration created by the denial of access to a believed entitlement
-WARNING
Entitlement oriented individuals are the most likely to engage in acts of this.
-People of integrity are not oriented in this act, they are more fair compensation oriented or even forgiveness oriented.
-When you give an employee a special privilege, it will often be taken as a permanent entitlement. When the days comes that you can no longer give it, the employee will feel that he or she is a victim of an unjust act by you.
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Principles (universal)
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Truth statements relating to conduct that serves universally accepted goals.
ex. 1. The principle of self-preservation
2. The principle of sharing (She is a person of principle; she shares what she has with others.)
3. The principle of reciprocity (i.e. reciprocity as fair exchange)
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Rules (societal)
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These are if-then laws, particular to a time and place, that serve principles.
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Virtues (individual)
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These are traits that lead one to perform a particular category of rules.
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The Problem of Right Definition
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For every right there exists a responsibility without which the right cannot exist.
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Four of the basic virtues
of self-discipline
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1.preparedness
-physical & mental
2.timeliness
3. maturity
4. attentiveness
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People who want to harm you for whatever reason will always go after your _____ first.
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reputation
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The Span of Management
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The number of people one manager can effectively supervise given function diversity.
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Where _____ ______ is low (work is routine) a manager can supervise a high number of employees. Where it is high, a manager might be only able to supervise 7 to 15 people.
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function diversity
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Gold star vs Brown stars vs blue stars
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As a manager, your management will be affected by the personalities of those within your span of management.
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Immaturity
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in the form of a child-like insensitivity to the feelings of others is a common workplace problem
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The term: "_____ _____" refers to tantrum throwing in the workplace.
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going postal
(other examples include road rage, guns in schools and neighborhoods)
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Immaturity as a Workplace Problem
As small children
Childhood Liberties = ___%
Vs.
Adult Responsibilities = ___%
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100;0
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Socialization
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That process where parents, teachers, and other mentors replace childhood liberties with adult responsibilities.
(other-centeredness replaces self-centeredness)
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An employee's externalization of responsibility takes many forms. Some of the more common are:
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1. Chronic excuse making
2. A failure to be on time for work or meetings
3. Inattentiveness at meetings (since no one is going to tell me what to do I don't have to listen to this.)
4. Poor preparation for everything
5. An indifference or rebellion to accepted standards of dress (They will go out of their way to not conform)
6. Child-like behaviors (e.g. playing practical jokes)
7. Frequent call-offs for work
8. A tendency to replace assigned duties with play. ex. video games at work
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Morality
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The study of rules relating to interpersonal relationships
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Moral Philosophy
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A set of principles, virtues, and values governing social interactions which sustains accepted fundamental rights for all.
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Moral Judgment
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The process of deciding what is fair and not fair with respect to other people.
This is one of the most common and most important things you will be doing as a manager. How well you do it will, to a great extent, define your leadership abilities.
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In our careers we first encounter as _____ _____
in the workplace
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Conformity Expectations
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The etymological interpretation of ethics
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to be ethical is to conform to the social traditions within one's society.
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Etymology
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The study of word origins
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Conformity expectations
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These are governed by the unwritten rules of decorum and ethos.
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Decorum
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The willingness and ability to conform to the standards of hygiene, dress and behavior culturally expected for the situation at hand.
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An organization's implicit rules for decorum come out of both its community culture and its internal culture. Its internal culture has three influences which are:
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1. Visible Artifacts:
Symbols, Stories, Heroes, Slogans, Ceremonies
2. Organizational Values: Mission Statements, Adopted methods- "The HP Way" & "The J. C. Penny Idea"
3. Underlying Beliefs
-People here care about each other.
-We are the best in our field
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Organizational Culture
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The set of informal shared values, norms, behavioral standards, and expectations that influence the ways in which individuals, teams, and groups interact to achieve company goals.
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Cognitive Limitation
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a tendency to consider only two clear paths, missing the fact that other alternatives might be possible
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Acceptance Dependency
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a tendency to bow to peer pressure even when it goes against one's better judgment
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Conflicting Responsibilities
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In this, one's duty to serve one's personal values holds the potential to do harm to the institution one serves
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Overcoming Cognitive Limitation
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Rule: before making any decision, take time to brainstorm one's possibilities for three or four options.
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Overcoming Acceptance Dependency
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Rule: Always see your life and what it stands for as more important than the momentary whims of those around you. (Wheeling girl example)
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Overcoming Conflicting Responsibilities
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Rule: before making any commitment to join an organization, make sure its stated values are in line with your own and when need be, hold the organization to its stated values.
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Problem Reporting
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In this an employee who discovers organizational misconduct chooses to bring it to the attention of his or her immediate supervisor.
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Whistleblower
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An employee who discovers organizational misconduct and chooses to bring it to the attention of someone other than his or her immediate supervisor.
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Internal Whistleblowing
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This occurs when an employee discovers organizational misconduct and brings it to the attention of a company official, who then follows established procedures to address the misconduct within the organization.
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External Whistleblowing
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When an employee discovers organizational misconduct and chooses to bring it to the attention of law enforcement agencies and/or the media.
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The five factors that characterize Whistle-blowing
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1. The problem harms or potentially harms people.
(as opposed to profits or assets)
2. The problem has been documented, it is real.
3. Efforts to internally resolve the problem have been exhausted.
4. The communication of the problem ignores normal channels.
5. There is the belief the act of reporting will resolve the problem.
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When is Whistle-Blowing Unethical?
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Whistle-blowing must be questioned if:
-Motivation is the opportunity for financial gain or media attention
-Employee is carrying out a vendetta against the company
(Key point -be very sure that your facts and your evidence is irrefutable before blowing the whistle)
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The two factors that make whistleblowing unethical:
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1. It is done only for financial reward or media attention.
2. It is done as an act of revenge.
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The Duty to Respond: Employees who prevail in whistle-blowing cases are entitled to damages, which may include
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1) Reinstatement to the same seniority status
2)Back pay
3)Interest
4)All compensatory damages to make the employee whole
5)Special damages
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The Duty of Respond: Mechanisms that employers need to put in place
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1) A well-defined process to document how such complaints are handled
2) An employee hotline to file such complaints
3) A prompt and thorough investigation of all complaints
4) A detailed report of all investigations
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Whistle Blowing As a Last Resort: After blowing the whistle on fraud:
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1) 90 percent were fired or demoted
2) 27 percent faced lawsuits
3) 26 percent had to seek psychiatric or physical care
4) 25 percent suffered alcohol abuse
5) 17 percent lost their homes
6) 15 percent got divorced
7) 10 percent attempted suicide
8) 8 percent were bankrupted
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The two devices companies
primarily use to contain
whistle-blowing
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1) Confidentiality agreements
2)The threat of a "tortious interference" suit directed at media seeking to cover the problem
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Tortious Interference
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A legal term defining conduct
aimed at creating either public or
judicial prejudice against a party in
a lawsuit seeking compensatory
damages.
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Moral Judgment
begins with an ability to be able to resolve _____ _____.
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Ethical dilemmas
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Dilemma
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A mental state characterized by the recognition that the solution to a problem at hand will expose another.
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A practical dilemma
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The realization that doing one thing which will benefit you or your company will cause you to lose an equal amount from another activity or opportunity
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The three elements defining
a practical dilemma
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1. It is always all about "me" or "us."
2.Right and wrong is defined only in terms of potential rewards and punishments to the self or firm.
3. Cost vs. benefit to "me" or "us" is used to arrive at the final decision.
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An ethical dilemma
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The realization that doing the right thing for one legitimate stakeholder will cause you to do the wrong thing for another.
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The three elements defining
an ethical dilemma
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1. It is always about all stakeholders.
2. Right and wrong is defined in terms of duty to others, society, profession, and one's word.
3. The maximization of fairness to all concerned is used to arrive at the final decision.
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An Ethical Principle
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an accepted or professed virtue or value whose definition, when applied to the situation at hand, creates a suggested rule of action or conduct
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For purposes of resolving ethical dilemmas in the world of finance the following eight steps are helpful.
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1) What is the ethical issue(s) or central problem(s) in this case?
2) Is my answer to #1 addressed by a law or by a code of ethics for the professional field in this case?
3) What threat does this problem pose for my organization?
4) In addition to my organization, who else will either be affected or potentially affected by the problem at hand.
5) What ethical ground best applies to this issue or problem?
6) Given my selected ground, what would be the best ethically defensible solution to this issue or problem?
7) How should I best apply this solution to the situation at hand? (What should I say?)
8) What policies should I now put in place to make sure this problem does not arise again?
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