3 What is Ethics?Standards of moral behavior, that is, behavior is accepted by society as ‘right’ versus ‘wrong’The study of how people try to live their lives according to the standard of “right” or “wrong” behavior – in both how we think and behave toward others and how we would like them to think and behave toward us.
5 What is Business Ethics? Application of standards of moral behavior to business situation.or…The study of how personal moral norms apply to activities and goals of commercial enterprise.
6 In-class Assignment:Break into a group of 5 (pick your group yourselves).Each group has to create a story related to business ethics and shows the impact of having ethics in business. Try to make your story interesting and capture all audiences attention.Then make a role play in front of the class (not over 10 mins/ group).
7 Business always related to stakeholders. … Who are Stakeholders?
8 Who are Stakeholders?Someone with a share or interest(benefit) in a business enterprise including stockholders, employees, customers, suppliers /vendor partner, retailer/ wholesaler, federal government, creditors, and community.
10 Stakeholder Interests StakeholdersInterest in organizationSuppliers/Vendor partnersRetailers/ WholesalersPrompt payment for delivered goodsRegular orders with and acceptable profit marginAccurate deliveries of quality products on time and at a reasonable costSafe and reliable product
11 Stakeholder Interests StakeholdersInterest in organizationStockholdersEmployeesGrowth in the value of company stockDividend incomeStable employmentFair rate of paySafe & comfortable working environment
12 Stakeholder Interests StakeholdersInterest in organizationFederal governmentCreditorsTax revenueOperation in compliance with all relevant legislationPrinciple and interest paymentsRepayment of debt according to the agreed schedule
13 Stakeholder Interests StakeholdersInterest in organizationCustomersCommunity“Fair Exchange” – a product or service of acceptable value and quality for the money spentEmployment of local residentsEconomic growthProtection of local environment
14 Stakeholder Impact from Unethical Behavior StakeholdersInterest in organizationStockholdersEmployeesMisleading financial information on which to base investment decisionsLoss of stock valueCancellation of dividendLoss of employmentUnfair rate of payUnsafe & uncomfortable working environment
15 Stakeholder Impact from Unethical Behavior StakeholdersInterest in organizationSuppliers/Vendor partnersRetailers/ WholesalersDelayed payment for delivered goods and servicesInaccurate deliveries of quality products and at unreasonable costUnsafe and unreliable product
16 Stakeholder Impact from Unethical Behavior StakeholdersInterest in organizationFederal governmentCreditorsLoss of tax revenueFailure to comply with all relevant legislationLoss of principle and interest paymentsFailure to repay debt according to the agreed schedule
17 Stakeholder Impact from Unethical Behavior StakeholdersInterest in organizationCustomersCommunityPoor service qualityPoor product qualityUnemployment of local residentsEconomic declineNo protection of local environment
19 Why does ethics matter in business? Impacts of operating firm unethically :Financial penalties: lawsuits, theftDeterioration (becoming worse) of relationshipsDamage to reputationDeclining employee productivity, creativity, loyalty,ineffective information flow throughout organization,absenteeism (regular absence from work w/o good reason)Difficulties for recruiting and retaining valued professionals due to bad reputation of company
20 The Golden Rule(The goal of living an ethical life)“Do unto others as you would have them do unto you.” or“Treat others as you would like to be treated.”
21 Danger of The Golden Rule Not everyone thinks like that…So, if you apply the golden rule to everyone you met, you possibly get in trouble.
22 Danger of The Golden Rule Example:If you are the person who values on honesty as a priority, and you found an expensive wallet fall on the sidewalk, you will definitely try to return it to the owner.However, if you lost your wallet, could you automatically expect that the person who found it would make the same effort to return it to you?
24 What is Ethical Dilemma? Situation in which there is no obvious “right” or “wrong” decision, but rather “right” or “right” answer.
25 Ethical Dilemma Example: You are the manager of the restaurant which is not popular among customer, sales in each day is quite low, some days could sell only few serves.You, as the manager, notices one of ingredient (which is very expensive as it has to be imported from overseas) use in cooking process already expired. Then you report to your boss.Due to the fact that, revenues from sales is not quite good, he asks you to continue using that expired ingredient as it just only be used for 2 dishes on the menu (out of 30 dishes).
26 Ethical Dilemma Example (con’t): In addition, chef also has to taste the dish has this ingredient before serving every time whether it still be the same taste for customer or not.The boss says, whenever the taste changes, he will order a new batch of this ingredient from overseas.What would you do after got your boss’s answer like this?
27 3 –Step Process of Resolving Ethical Dilemmas Analyze the consequences: who will be affected by your action (negative and positive effects) both in long run and short run?Analyze the actions: consider all options from a different perspective, which option offers actions that are least problematic?Make a decision
28 8 Questions should consider when resolving an ethical dilemma by Arthur Dobrin What are the facts?What can you guess about the facts you don’t know?What do the fact mean?What does problem look like through the eyes of people involved?What will happen if you choose one thing rather than another?
29 8 questions should consider when resolving an ethical dilemma by Arthur Dobrin 6. What do your feelings tell you?7. What will you think of yourself if you decide one thing or another?8. Can you explain and justify your decision to others?
30 Summary Business Ethics Deals with what is “right” and “wrong” in organizational decisions, behavior, and policiesProvides principles and guidelines that assist people in making informed choices that balance economic interests and social responsibilities.