Business Ethics

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Social & Legal Issues

Business Ethics and Values

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Ethics
• Greek word: Ethos that means both an individual’s character and a community culture. • Business ethics involves adhering to legal, regulatory, professional and company standards, keeping promises and commitments and abiding by general principles like fairness, honesty and respect

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Business Ethics
The application of general ethical concepts to the unique situations confronted in business. It asks what is right or wrong behavior in business and what principles or rules can be used as guidance in business situations.

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Two Characteristics
• Tells people what they ought to do • Set of principles or rules

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Case
• Jonica Gunson is the environmental compliance manager for a small plastics manufacturing company. She is currently faced with the decision whether or not to spend money on new technology that will reduce the level of a particular toxin in the wastewater that flows out the back of the factory and into a lake. • The factory's emission levels are already within legal limits. However, Jonica knows that environmental regulations for this particular toxin are lagging behind scientific evidence. In fact, a scientist from the university had been quoted in the newspaper recently, saying that if emission levels stayed at this level, the fish in the lakes and rivers in the area might soon have to be declared unsafe for human consumption.

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Case
• Further, if companies in the region don't engage in some selfregulation on this issue, there is reason to fear that the government — backed by public opinion — may force companies to begin using the new technology, and may also begin requiring monthly emission level reports (which would be both expensive and time consuming). • But the company's environmental compliance budget is tight. Asking for this new technology to be installed would put Jonica's department over-budget, and could jeopardize the company's ability to show a profit this year. •

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Questions for Discussion:
• What motives would the company have to install the new technology? • What motives would the company have to delay installing the new technology? • Why might the companies in this region prefer for the government to impose new regulations?

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Relativism

Egoism

The 4 Concepts of Ethics Utilitarianism Deontologism

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Concepts of Ethics
• Developed by moral philosophers over generations • Used to distinguish ethical from unethical behavior • Each has problems

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Relativism
• There is no universal standard by which morality can be judged • What is correct for one society may be wrong for another • Ethics and morality are relative

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Egoism
• One ought to act in his or her own self interest • Ethical behavior is that which promotes one’s own self interest

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Utilitarianism
• The morality of an action can be determined by its consequences • An action is ethical if it promotes the greatest good for the greatest number

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Deontologism
• Derived from the Greek word for Duty • Actions are not justified by their consequences. Factors other than good outcomes determine the rightness of actions

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Utilitarianism Vs. Deontologism
• Utilitarianism - The ends justify the means • Deontologism - It is the means which are important

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Ethical Dilemmas in Business
• Conflict of Interest Have two interests - cannot purse one without having negative impact on other • Two Types Private Interest Conflicts with Corporate Business Interest Conflicts with Public

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Whistleblowing
• Act of disclosing wrongdoing in an organization • Types Internal External

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