What is Business Ethics?

Key elements for recognizing moral responsibility

1 - Causality --> an individual caused or helped cause injury or wrong or they failed to prevent it when they could have 2 - Knowledge --> the individual made the decision knowing what they were doing - 2 exceptions: Ignorance (does not relieve of your moral responsibility) & failure to take steps to find out if something is important 3 - Freedom --> a person is morally responsible when they have acted on his or her own free will; they were not forced to make a specific decision If you are missing one of these, then you DO NOT have moral responsibility

Corporate and subordinate responsibility

1 - Corporate: actions and decisions within a company are made by many people; who is responsible when many people are involved? 2 - Subordinate: carries out an act that the supervisor told him to carry out and they both know it's wrong

3 different management situations with varying ethical considerations

1 - Ethical considerations in each situation --> managing and leading contain many ethical decisions. Every decision effects people, the business environment, and the natural environment. 2 - Competing forces --> make ethical decisions between financial performance and social performance. 3 - Moral Conflicts --> a moral situation in which a person must choose between 2 equally bad choices or when there are multiple ethical considerations which conflict with each other

Ethics is NOT

1 - Feelings: a sensation or an emotional state like joy 2 - Religion: ethics can include religion, but many people are not religious; ethics applies to everyone and isn't confined to religion 3 - Following the law: the law can deviate from what is ethical; the law can become corrupt 4 - Judgment or judging others: not about determining if someone is good or bad; have to solve decisions in a fair manner 5 - Following culturally accepted norms: cultures vary with ethics; some are ethical while others are corrupt 6- Technology or science: can provide information and data, but it can't provide reason for how humans ought to act

3 steps for managers

1 - Identify stakeholders 2 - Have a framework to arrive at your decisions 3 - Communicating

Pressures and Factors affecting the morality of managers

1 - Individual and cognitive factors: -Ignorance: can account for bad ethical choices; can almost be willful and intentional - Considering limited alternatives: when faced with a situation with 2 clear paths, a person only considers these 2 factors; they don't consider any alternative factors - Simplified decision rules: having a simple rule to follow can be reassuring to decision makers and can appear to relieve us of accountability for the decision - Satisfying: "it's good enough" 2 - Motivational factors: - It's easier to do the wrong thing: it's hard to sometimes do the right thing; it takes time and effort. It will continue to snowball out of control if you let it. - You lack the courage: make decisions you regret later on because you don't have the courage to do it the first time - Peer pressure: you want to fit in and want people to respect you; you will be influenced by others 3 - Organizational factors: - Behavior of supervisors: influence of your supervisors is real and deep reaching - Behavior of peers: people pay attention to and are influenced by others - Personal financial need: personal needs and wants of employees that can cause unethical decisions or justification - Formal organizational policy: some are very elaborate while others are not 4 - Situational factors: - Scripts: situations that are stored in our memory; we recall from memory what you did in the past and make that decision again - Distractions: we don't deal well with these - Moral exclusion: if an individual or group is perceived as outside the boundary in which moral values or considerations of fairness apply

3 levels that ethical issues can occur

1 - Individual: how we act as individuals in the workplace; ethical questions about a person's character, behavior, and their actions 2 - Organizational (corporate): how business org. are structured and how they work. Examines policies, climate, norms, etc. of the company 3 - Societal (systemic): very broad perspectives; social, political, and economic systems in which businesses operate

Why moral standards are NOT an adequate framework for ethical issues

1 - Moral standards are subjective; they vary from person to person 2 - Moral standards are variable; they vary by country, time, religion, etc. 3 - Moral standards conflict; one persons will conflict with another person's

Elements of moral standards

1 - Personal goals = our expectations of outcomes; these are what we want out of life. Can include personal possessions like cars, homes, etc. They can include family, social justice, etc. 2 - Personal norms = our expectation of behavior; the way we expect others to behave. Norms are not laws; they are not published and may or may not be obeyed. They cannot be enforced. Neither consistent nor universal between groups or countries. 3 - Personal beliefs = our expectation of thought; beliefs support our norms. Norms lead to a person's goal. 4 - Personal values = rankings or priorities that a person establishes Are all goals, norms, and beliefs of equal importance? --> No, some are more important than others

3 organizational views of stakeholders

1 - Production view: suppliers, organization, customers 2 - Managerial view: suppliers, organization, customers + employees and stakeholders 3 - Stakeholder view: much broader viewpoint of the organization; its concerned with individuals who can be influenced by the organization

When examining ethical issues in the workplace...

1 - We shouldn't hide behind the fiction of the corporation 2 - As humans, we control, decide, and carry out what the corporation does 3 - As individuals, we are influenced by other workers and the organization 4 - We as individuals still make the choice

3 components of the managerial function of moral responsibility

2 - We need to be able to identify the groups being impacted (the stakeholders) 3 - Determine, do we have moral responsibility or not?

Stake

A stake is an interest or share or undertaking.

Stakeholders

A stakeholder is an individual or group who can affect or be affected by the achievement of an organizations actions, activities, decisions, etc. - The concept of stakeholder involves an exchange of influence - We are concerned with stakeholders that are morally impacted

Amoral

An amoral person is one who does not stop to think about the rightness or fairness of his/her decisions, but instead concentrates upon profits (or some other goal) for their employer and personal benefits for themselves Ethical relativism: there is no ethical standard that can be applied universally - Whether an action is right or wrong depends on the culture, values, and perspectives

Influences on elements of moral standards

Cultural and religious traditions have variations and this affects GNB&V which affects that individuals MS. - Religious, cultural, economic, and social will affect your moral standards - People hold their different economic and religious traditions in equally high esteem - This will create differences in moral standards and affect the way individuals and groups will view an ethical situation in which people can be morally impacted

Moral responsibility and stakeholders

Moral responsibility 1 - a person's moral duty or their moral obligation; the recognition of ethical dilemmas or issues 2 - Affixing or placing blame? --> No- Key managerial function is to recognize that you have moral responsibility

Personal Ethics

Personal ethics refer to the rules by which an individual lives his or her personal life. - Ethics and business ethics is a two-fold investigation that includes the activity of the investigation and the results. The focus/subject of the investigation is morality

Primary stakeholders

Primary stakeholders: direct influence and stake in the company's success * NOTE: A stakeholder's status can change

What are mitigating factors?

Reduce the manager's overall moral responsibility 1 - Degree of contribution/ participation: some actions will involve several parties to determine if something is unethical 2 - Difficulty due to duress: pressures placed on you to perform an action to determine if its ethical or not

Secondary stakeholders

Secondary stakeholders: more removed and indirect influence * NOTE: A stakeholder's status can change

Business Ethics

Specialized study of moral right and wrong that focuses on moral standards as they apply to business organizations and their behavior- Business ethics is about how we behave (the standards by which we hold ourselves accountable) AND about relationships (how we treat others and how we treat each other)

Ethics

The discipline that examines a person's moral standards or the moral standards of society to evaluate their applicability & reasonableness to the situation in an individual's life

What are moral standards?

The norms about the kinds of actions believed to be morally right and wrong, as well as the values placed on what we believe to be morally good and morally bad