Class 4: The importance of Business Ethics
ethical culture
acceptable behavior as defined by the company and industry - the goal is to minimize the need for enforced compliance with rules and maximize the use of principles that contribute to ethical reasoning in difficult or new situations - creates shared values and support for ethical decisions and is driven by the ethical leadership of top management
values
enduring beliefs and ideals that are sociall enforced
morals
personal philosophies that define right and wrong
principles
specific boundaries for behavior that often become the basis for rules
ethics
study of right and wrong behavior
workplace integrity
the pressure to compromise organizational standards, observed misconduct, reporting of misconduct when observed, and retaliation against reports
value dilemma
two or more beliefs/ideals in conflict with one another
moral dilemma
two or more choices in conflict with one another, all undesirable
ethics contributes to profits
better business performance
ethicas contributes to
- employee commitment - investor loyalty - customer satisfaction - profits
why study business ethics?
- firm survival - profitability, revenues, sales - stakeholder expectations - contribute to societal goals - identify ethical issues - recognize approaches for resolving ethical issues - cope with conflicts between your own personal values and those of the organization in which you work - gain knowledge to make more ethical business decisions
ethics contributes to customer satisfaction
- high levels of perceived corporate misconduct decreases consumer trust - companies viewed as socially responsible increase customer trust and satisfaction
ethics contributes to employee commitment
- increases job satisfaction; decreases turnover
Business ethics
- organizational principles, values, and norms - that may originate from individuals, organizational statements, or from the legal system - that primary guide individual and group behavior in business
ethics contributes to investor loyalty
- provides a foundation for efficiency, productivity, and profits - negative publicity, lawsuits, and fines can lower stock prices - demand for socially responsible investing is increasing