Business Ethics Quiz #1

why individuals care about ethics

Beyond being hardwired for fairness and altruism and self-interest, employees are also concerned about their personal reputations. In today's work environment, success depends on an individual's ability to work effectively with others. Trust greases the wheels of working relationships with peers across departments and on project teams. A reputation for being difficult to work with, dishonest, or mean often catches up with you as coworkers withhold important information and promotions go to others. Given the importance of relationships to effectiveness in business today, your reputation for integrity is an essential ingredient for success and personal satisfaction.

toxic organization

But discarding bad apples generally won't solve an organization's problem with unethical behavior. The organization must scrutinize itself to determine whether something rotten inside the organization is spoiling the apples. At work, managers and the organizational culture transmit many cues about how employees should think and act.

Appearance of a conflict vs. actual conflict

mere appearance of a conflict of interest is just as an actual conflict of interest

Five Primary Factors that contributed to the financial crisis

cheap money; real estate; liar loans; mortgage backed securities and credit default swaps; S&P/Moody's/Government

bribes and COA

clear conflict of interest because it is aimed at influencing a decision that would be favorable to the party providing the bribe or kickback.

deontological approach to COA

It's probably most relevant to consider what's fair. What decision would place all bidders on a level playing field? What could you do that would make the bidding absolutely fair and unbiased? Isn't that the kind of world you would most like to live in?

why managers care about ethics

Managers care about ethics in part because they face the thorny problem of how to prevent and manage unethical behavior in their ranks. More than their jobs depend on this concern—managers can be held legally liable for the criminal activities of their subordinates. keeps trust between relationships

challenges of deontological approach

deciding which duty, obligation, right, or principle takes precedence because, as we said earlier, ethical dilemmas often pit these against each other. What does one do if one binding moral rule clashes with another? Can it be determined which is the more important right or principle?; they conflict with consequentialist reasoning. what happens when following a rule will have devastating consequences?

The Golden Rule

helps determine what rule, principle or right to follow. "Do unto others as you would have them do unto you." leads you to the best decision only if both parties are highly ethical.

conflict of interest

occurs when a person's judgment or objectivity is compromised, typically because of financial or other gain for the person making a decision or for a close relative or friend. Generally, in these situations, a person's self‐interest clashes with the interests of others such as the business, customers, or the public (if the decision maker is a government official).

bad apple theory

people are good or bad and organizations are powerless to change these folks. This bad apple idea is appealing in part because unethical behavior can then be blamed on a few individuals with poor character. Although it's unpleasant to fire people, it's relatively easier for organizations to search for and discard a few bad apples than to search for some organizational problem that caused the apple to rot.

challenges to the consequentialist approach

that it is often difficult to obtain the information required to evaluate all of the consequences for all stakeholders who may be directly or indirectly affected by an action or decision; the rights of a minority group can easily be sacrificed for the benefit of the majority.

Is cynicism about corporate leadership and corporations in general warranted? If so, to what degree?

the importance of consumer trust - the degree to which consumers trust organizations has a direct impact on their buying patterns and much more. corporate reputations affect consumer buying patterns, and companies risk harming their bottom line when they do not act to protect their good name. public cynicism is not new. Surely, the factor that has contributed the most to cynicism in recent years is the highly visible behavior of some of the nation's leading corporations and executives. the problem goes way beyond business and business schools and that our society, with its emphasis on money and material success, is rearing young people who strive for achievement at any cost. However, students are still cynical but not as cynical as before. television and film also contribute to cynicism. But we have to remember there are good businesses too. For ex) 9/11

Ethics

the principles, norms, and standards of conduct governing an individual or group

Employer-Employee Relationship

trust, loyalty, and confidence

Ethics and the law

we can see a great deal of overlap between what's legal and what's ethical. Therefore, most people believe that law‐abiding behavior is also ethical behavior. However, many standards of conduct are agreed upon by society and not codified in law. the domain of ethics includes the law but extends well beyond it to include ethical standards and issues that the law does not address.

ethical dilemma

where two or more important values, rights, or responsibilities conflict and we have to choose between equally unpleasant alternatives.

influence and COA

your relationship with someone in itself can constitute a conflict of interest.

identifying where and when ethical issues arise

(1) if they believe that their peers will consider it to be ethically problematic; (2) if ethical language is used to present the situation to the decision maker; and (3) if the decision is seen as having the potential to produce serious harm to others.

8 steps to ethical decision making

1. gather facts 2. define ethical issues 3. identify affected parties 4. identify consequences 5. identify obligations 6. consider your character and integrity 7. think creatively about potential actions 8. check your gut

importance of values

For individuals, values can be defined as "one's core beliefs about what is important, what is valued, and how one should behave across a wide variety of situations. Strongly held values influence important decisions. just as individual values guide individual thinking and action, organizational values guide organizational thinking and action. And, just as with individuals, the key question is how the organization prioritizes its values. Societies and cultures also have shared values, and these are an important part of the business environment and expectations of business and businesspeople. When we talk about cross‐cultural values, we often focus on the differences. but, values across cultures are often more similar than different. Even in corrupt cultures, if you ask people what they value, they'll tell you that they would prefer to live in an environment where everyone can be trusted to do business honestly and fairly.

why employees care about ethics

People who know that they are working for something larger with a more noble purpose can be expected to be loyal and dependable, and, at a minimum, more inspired

why executive leaders care about ethics

They care about business's image on society. No society anywhere will compete very long or successfully with people stabbing each other in the back; with people trying to steal from each other; with everything requiring notarized confirmation because you can't trust the other fellow; with every little squabble ending in litigation; and with government writing reams of regulatory legislation, tying business hand and foot to keep it honest. ... There is no escaping this fact; the greater the measure of mutual trust and confidence in the ethics of a society, the greater its economic strength.

Kant and the categorical imperative

This rule asks you to consider whether the rationale for your action is suitable to become a universal law or principle for everyone to follow. What kind of world would this be if everyone behaved this way or made this kind of decision in this type of situation?

importance of trust

Trust is essential in a service economy, where all a firm has is its reputation for dependability and good service. trust encourages the open exchange of ideas and information, reduces the need for costly controls, allows for rapid adjustment to change, and is associated with willingness to work through cultural differences and difficulties. One reason why so much of our society appears to be in disarray is that people have so little trust in institutions. This lack of trust is not a good thing, and the ethical debacles that have occurred over the last few decades have proven to be a blight on our civic landscape because so many people trust no one. It has also become increasingly difficult for people to engage in civil discourse. If people find it difficult to even talk to one another in civil tones, trust will become even more elusive.

competing against your employer and COA

Two factors could make such a situation acceptable: if the work you perform at your second job doesn't compromise the work you do at your first one, and if both employers are aware of your activities. Transparency is the best policy.

why society cares about ethics

Using power responsibly means being concerned for the interests of multiple stakeholders. Stakeholders have the power to interfere with a firm's activities. For example, employees can strike, customers can stop buying products, protesters can bring bad publicity, and the government can act to regulate a firm's activities. Increased regulation is an almost certain societal response to business scandal, and with new regulations comes increased costs and reduced power for business. In addition, organizations that do not act responsibly risk criminal liability and the resulting financial damage. Even without criminal liability, businesses that don't act responsibly risk their reputations, and a lost reputation is tough to rebuild.

why industries care about ethics

When companies get bad publicity for ethical scandals, whole industries suffer.

ethical awareness

a person recognizes that a situation or issue is one that raises ethical concerns and must be thought about in ethical terms.

consequentialist approach to COA

encourages us to think about what would benefit the most people.

consequentialist approach

focus attention on the results or consequences of the decision or action. requires you to do an analysis and mental calculation of all the harms and benefits of these consequences, stakeholder by stakeholder, for each option identified. the "best" ethical decision is the one that yields the greatest net benefits for society, and the "worst" decision is the one that yields the greatest net harms for society.

deontological approach

focus on duties, obligations, and principles. base their decisions about what's right on broad, abstract, universal ethical principles or values such as honesty, promise keeping, fairness, loyalty, rights (to safety, privacy, etc.), justice, responsibility, compassion, and respect for human beings and property. certain moral principles are binding, regardless of the consequences.