▪ Introducing straight talk about ethics, where are we going and why?
▪ The approach to this course. What makes a course excellent?
▪ Why be ethical? The importance of trust and values
1. Moving Beyond Cynicism:
□ Edelman Trust Barometer (2009):
o More than half of respondents say they trust business less than they did a year ago
▪ Worse in the U.S.
▪ No decline in BRIC countries (Brazil, Russia, India, China)
o Business case for trust:
▪ 91% of consumers purchase products from companies they trust
▪ 77% of consumers refuse to purchase products from companies they don’t trust
2. MBA Oath
3. Business Ethics Defined:
□ The principles, norms, and standards of conduct governing an individual or group
4. Why Bother Teaching Ethics?
□ Bad apples are encouraged by bad barrels
□ Good character isn’t always enough
□ Adults develop moral judgment into their 30s
□ Conduct is influenced by environment
6. Relationship between ethics and law
7. Why Be Ethical? Who Cares?
▪ Individuals care
▪ Employees care
▪ Managers care
▪ Executives care
▪ Industries care
▪ Societies care
▪ Pp 12-13 What is your opinion of the oath?
▪ Do you think all MBAs should be sworn to such an oath?
▪ Why or why not?
▪ P 17 do you agree that ethics should focus on conduct rather than just “a set of moral principles or values”?
▪ P 18 do you agree that ethics should become an extension of management? Why? Or why not?
▪ P 24 Reputation and Competition
▪ Cite NZ example of butter vs margerine
□ Deciding what’s right: a prescriptive approach
1. What is an Ethical Dilemma?
▪ A situation where values are in conflict
o Two or more values you hold dear - or –
o Personal value conflicts with organizational value
2. Prescriptive Approaches
▪ Focus on consequences (consequentialist theories)
o Utilitarianism - best known consequentialist theory
o Identify alternative actions and consequences to stakeholders
o Best decision yields greatest net benefits to society
o Worst decision yields greatest net harms to society
▪ Already underlies business thinking
▪ Difficult to evaluate all consequences
▪ Rights of minorities can be sacrificed
o Consequentialist Questions:
▪ Can I indentify all the stakeholders?
• Immediate, distant?
▪ What are the potential actions I could take?
▪ What are the harms and benefits for stakeholders given potential decisions/actions?
▪ What decision will produce the most benefit (and least harm) for the greatest number of people, and for society at large?
o Consequentialist Analysis
▪ Focus on duties, obligations, principles (deontological theories)
o Decisions based upon abstract universal principles: honesty, promise-keeping, fairness, rights, justice, respect
o Focus on doing what’s “right” (consistent with these principles) rather than doing what will maximize societal welfare (as in utilitarianism)
o Ethical Rules (Simplified)
• Kant’s categorical imperative
▪ “What kind of world would it be if everyone behaved this way?” “Would I want to live in that world?”
• Rawls’ veil of ignorance – for deciding what’s fair
▪ “What would decision be if decision makers knew...