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business sense.
In the long run, good ethics makes good
99% - 1%
Organizational Responsibility
Performance
Ethical Issues in Business
Ethical Issues in
Business
A Framework
Business INDIVIDUAL for
Understanding
Ethics in a
Global DECISION Ethical
Decision
Economy MAKER Making in
Business
Development Organizational
of an Culture and
Effective Ethical
Ethics Decision
Program Making
Organizational
Relationships
and Conflicts
in Ethical
Decision
Making
Applying Moral Philosophies to
Business Ethics
Moral philosophies are principles or rules that people
use to decide what is right or wrong.
People learn these principles through socialization by
family members, social groups, and formal education.
Each moral philosophy has its own concept of rightness
or ethicalness and rules for behavior.
Types of Moral Philosophy
A Comparison of the Philosophies Used in Business Decisions
Teleology Morally right is they produce some desired result
Egoism Defines right or acceptable behavior in terms of the
consequences for the individual
Utilitarianism Seeks the greatest good for the greatest number of people
Deontology Focuses on the rights of individual and on the intentions
associated with a particular behavior rather than on its
consequences
Relativist Evaluates ethicalness subjectively on the basis of individual
and group experiences
Virtue ethics What the mature person with a good moral character deem
appropriate
Justice Evaluates ethicalness on the basis of fairness
Social Responsibility
The obligation a business assumes toward society.
Types of Responsibilities
Economic To produce goods and services that society
needs and wants at a price that can
perpetuate the business and satisfy its
obligations to investors
Legal Laws that businesses must obey
Ethical Behaviors or activities that are expected by
society but are not codified by law
Philanthropic Those that society desires and business
values dictate
A Framework for Understanding
Ethical Decision Making in Business
In order to establish policies and rules that encourage
employees to behave ethically and in accordance with
organizational objectives, business managers must
understand how and why people make ethical
decisions.
Ethical Issue Intensity
Corporate Culture
Organizational Culture and Ethical
Decision Making
Business ethics is a matter not only of understanding
moral philosophies but also recognizing how these
moral philosophies are altered or blocked by
organizational influence.
An organization that actively fosters an ethical climate
provides an example of how its employees should
behave.
Organizations must take responsibility for employee
conduct and establish an organizational culture that
provides a supportive value system encouraging ethical
conduct.
Organizational Relationships and
Conflicts in Ethical Decision Making
Individuals learn ethical or unethical behavior not only
from society in general but also from superior, peers,
and subordinates with whom they associated in the
work environment.
The more a person is exposed to unethical decisions by
others in the work environment, the more likely he or
she is to behave unethically.
The status and power of significant others are closely
related to the amount of pressure they can exert on an
employee to conform to their expectations.
In organizations where ethical standards are vague and
supervision by superiors is limited, peers may provide
the most guidance in an ethical decision.
Both opportunity and conflict influence ethical decision
making.
Opportunity is an important consideration in
understanding ethical decision making, and so is an
understanding of ethical conflict.
Development of an Effective
Ethics Program
To encourage ethical behavior, organizations must be
responsible for developing an ethics program.
A reasonable ethical compliance program for preventing
misconduct should include a code of ethics, oversight of
the program, employee training, methods for employees
to report misconduct, and provisions for monitoring and
enforcing the program,
Organizations need to analyze potential areas of ethical
risk and design a program that addresses problem
situations or internal conditions.
In addition, they should revise their program on a
regular basis in response to misconduct and overall
ethical improvement.
Organizations have to understand and abide by industry
standards of conduct and comply with all legal
requirements.
Business Ethics in a Global Economy
Businesses are operating across national boundaries
and even globally, often in cultures where different
moral standards and business ethics prevail.
Certain international business ethical issues derive
from differences in cultures; others relate to
discrimination, bribery, pricing, and the impact of
multinational corporations.
Business Ethics and
Organizational Performance
Resources used to improve corporate ethical value
systems improve business performance.
An improved ethical climate is associated with a keener
pursuit of quality, customer satisfaction, and employee
commitment.
Overall good corporate citizenship contributes to
financial performance.
A good reputation is important to creating the value of a
business.
Application
Regardless of your own personal values, the more you
know about how individuals make decisions, the better
prepared you will be to cope with difficult ethical
decisions.
Such knowledge will help you improve and control the
ethical decision-making environment in which you work.
It is your job to make the final decision in an ethical
situation that affects you.
Thank you and
God bless!