Description of Business Ethics

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Crane & Matten
Business Ethics

© Oxford University Press, 2007. All rights reserved.

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Higher Education

Introducing Business Ethics
Lecture 1

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Higher Education

Overview
• What is business ethics? • Why is business ethics important? • Globalization: a key context for business ethics? • Sustainability: a key goal for business ethics? • Europe: a key perspective on business ethics? © Oxford University Press, 2007. All rights reserved.

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Higher Education

What is business ethics?
Business ethics is the study of business situations, activities, and decisions where issues of right and wrong are addressed.

© Oxford University Press, 2007. All rights reserved.

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Higher Education

Ethics and the law
Ethics
grey area

Law
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Higher Education

Defining morality, ethics and ethical theory
• Morality is concerned with the norms, values and beliefs embedded in social processes which define right and wrong for an individual or a community. • Ethics is concerned with the study of morality and the application of reason to elucidate specific rules and principles that determine right and wrong for any given situation. • These rules and principles are called ethical theories. 2 Higher Education

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The relationship between morality, ethics and ethical theory

Ethics rationalizes morality …

… to produce ethical theory …

…that can be applied to any situation.

Morality

Ethics

Ethical theory

Potential solutions to ethical problems

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Higher Education

Why is business ethics important?
1. Power and influence of business in society 2. Potential to provide major contribution to society 3. Potential to inflict harm 4. Increasing demands from stakeholders 5. Lack of business ethics education or training 6. Continued occurrence of ethical infractions 7. Evaluating different ways of managing business ethics 8. Interesting and rewarding 2 Higher Education

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Types of misconduct employees observed among co-workers
Type of Misconduct of Co-Workers abusive or intimidating behaviour towards employees lying to employees, customers, vendors, or the public a situation that places employee interests over organizational interests violations of safety regulations misreporting of actual time worked discrimination on the basis of race, colour, gender, age or similar categories stealing or theft sexual harassment Percentage of employees observing misconduct 21% 19% 18% 16% 16% 12% 11% 9% Source: Ethics Resource Center (2005)

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Higher Education

Globalization: a key context for business ethics?

© Oxford University Press, 2007. All rights reserved.

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Higher Education

What is globalization?
• According to Scholte (2000) globalization is not:
– – – – ‘internationalization’ ‘liberalization’ ‘universalization’ ‘westernization’

• Globalization is: the progressive eroding of the relevance of territorial bases for social, economic and political activities, processes and relations – ‘deterritorialization’

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Relevance of globalization for business ethics
• Cultural issues • Legal issues • Accountability issues

Globalization can affect all stakeholders of the corporation © Oxford University Press, 2007. All rights reserved.

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Ethical impacts of globalization
Stakeholders
Shareholders Employees

Ethical impacts of globalization
Globalization provides potential for greater profitability, but also greater risks. Lack of regulation of global capital markets, leading to additional financial risks and instability....
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