Ch. 5: The theoretical basis

Influences on ethical behaviour: Societal Influences

Members of society form social relationships with those of similar interests, customs, beliefs or values. These relationships based on the views of a particular community

Personal Virtues Ethic

An individuals or corporations behaviour is based upon being a good person with traits such as courage, honesty, wisdom, generosity.

Universal Rules Ethics

Ensures that managers or corporations have the same moral obligations in morally similar situations Treat people as means in themselves (with respect)

Utilitarian Ethic

Focuses on the distribution of benefits and harms to all stakeholders with the view to maximizing benefits

Ethics of Caring

Gives attention to individuals or stakeholders harmed or disadvantaged and their particular circumstances

Challenges of Ethics in Business

Indicating 'just do the right thing' is sufficient Its not easy to be ethical Unethical behaviour not just due to a few bad apples People always have been (and always will be) unethical Most believe (due to implicit bias) that they behave ethically towards others

Self-interest (Ethical Egoism)

Individuals or corporations set their own standards for judging the ethical implications of their actions; only the individuals values and standards are the basis for actions Self interest is not the same as selfishness, greed, etc

Influences on Ethical Behaviour: Influences on Individuals

Managers often make ethical decisions based on the morals they acquire while growing up. The family or home environment is a major influence, making the personal convictions of individual managers a source of ethical standards

Different types of Justice

Procedural: This involves the impartial application of rules or procedures Corrective: Stakeholders are compensated appropriately for wrongs that are suffered Retributive: This form is concerned that punishment should fit the offence Distributive: There is concern for all stakeholders are treated. This form of justice is often applicable in business situations

Individual Rights Ethics

Relies on a list of agreed upon rights for everyone that will be upheld by everyone and that becomes the basis for deciding what is right, just, or right.

Economic Efficiency Influences

Some managers assess the moral implications of a decision by its economic consequences and a moral justification is based on the workings of a market system.

Influences on Ethical Behaviour: Corporate or Organizational Influences

The culture of a corporation or organization influences how a manager behaves

Level 1

assumes an awareness of moral or ethical implications business decisions or actions. This may not be the case, as some managers behave in an amoral manner. Managers with an amoral approach to ethics disregard all moral responsibilities when making decisions. In order to assess ethical implications there must be awareness of ethics

Ethical Relativism

ethical answers depend on the situation, no universal standards or rules exist - people set their own standards for ethical behaviour

Level 2

is the one most comply used by managers and most individuals

Level 3

represents a more systematic analysis or assessment of ethical implications. The assessment is based on the use of fundamental ethical principles to evaluate the outcomes from decision or compare actions. A conscious effort is made to identify and analyze the distribution of benefits and harms to all stakesholders affected

Business Ethics

rules, standards, codes or principles that provide guidelines for morally right behaviour and truthfulness in specific situations

Cultural relativism

societies have different standards for moral behaviour - what is acceptable in one society may not be acceptable in another

Value Judgments

subjective evaluations of what is considered important - based on how managers intuitively feel about the goodness or rightness of various goals

Influences on ethical behaviour: Government and Legal System Influences

the government that enacts legislation and regulations; that is, a code of laws. Government legislation does influence business decisions the legal system makes a certain behaviour illegal and most managers are sensitive to behaving within the law

Moral Standards

the means by which individuals judge their actions and the actions of others