1. Principles of Management Core Principles
Business Ethics
Principles of Management
Core Principles
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2. Individual v. Business Ethics
Each of us has a view of what is right or wrong.
A manager takes his/her personal ethics with them in to the organization.
That company also has an organizational view of what is right or wrong in terms of the business decisions it makes.

3. Learning Objectives Be able to explain what business ethics is.
Be able to recognize an ethical problem.
Be able to identify the stakeholders impacted by an ethical problem.
Evaluate solutions to the ethical problem using the different ethical philosophies.
Make a decision and support your decision explaining the impact on different stakeholders.
Identify steps for preventing the ethical problem from occurring again.

4. Defining Business Ethics
Ethics Generally (definitions)
Focus on what is right and wrong
Inquiry into morality
Standards governing how we behave
Business Ethics
Comprises moral principles and standards that guide behavior in business situations
What is right and wrong in a business setting?

5. Ethical Decision Making
How a manager handles
the situation depends on:
Person
Individual Characteristics
Personal ethics
Stage of Moral Development
Organization
Culture
Values
What is rewarded/punished
Dilemma Itself
Importance to person
Importance to organization
Importance to society
Company ABC
Ethical
Dilemma
Is perceived
Manager
Smith

6. Role of Stakeholders
Stakeholders are people who have a stake or interest in the success of the organization.
Examples of Stakeholders:
Employees, customers, investors, suppliers, the community
Also may include competitors, government, media, interest groups
Stakeholders may have different views on whether a company’s actions are right or wrong.
Difficult to satisfy the goals and needs of all stakeholders but managers should consider them prior to making decisions.
Ethical Dilemma - When stakeholder needs and goals are in conflict and the manager must make a decision

7. Utilitarianism
Philosophers John Stuart Mill ( ) and Jeremy Bentham ( )
Good consequences for society
Decision maker seeks alternative actions and evaluates the costs/benefits of each action on all persons in the foreseeable future
The right decision is the one that provides the greatest total benefit
Critics say can’t consider all alternatives and ignoring individual rights and justice

8. Deontology (Rights View)
Philosopher Immanual Kant ( )
Decision maker must focus on the individual rights of people impacted by the decision
It also focuses on how people are treated in the decision making process
Equal respect must be given to all persons
Some decisions are wrong regardless of the social utility that may result
Critics argue that this theory fails to take what is best for society into account.

9. Ethical Decision Making
There are different moral philosophies to guide decision making
These are lenses through which a person looks at a situation for guidance of what is right or wrong
Often the decision will be the same, but different reasoning is used to get to that decision -- but that is not always the case.
Two Most Common Moral Philosophies
Utilitarianism
(greatest good for the most people)
Deontology
(Rights View)

10. Which Business Decision is Ethical?
Evaluate the decision through the lenses of the utilitarian view as well as the deontological view
Also consider –
TV Rule
Professional Ethics
Virtue Ethics

11. Legal v. Ethical What is legal is ethical? What is ethical is legal?
What is illegal is unethical?
What is unethical is illegal?

12. Making Ethics Part of Day-to-Day Operations
Build an ethical culture
Mission and values of organization must support ethical culture
Managers must lead by example and walk the walk
Train, expect, reward ethical behavior
Make ethics a job qualification
Develop ethical policies and codes of behavior
Monitor and control activities to encourage ethical behavior
Hold regular ethical audits
Designate staff and resources to foster and support the ethical culture

13. Keys to Effective Ethics Training
Teach employees how to identify the ethical dimensions of a decision
Help employees understand the ambiguity involved when making ethical decisions
Give employees the tools and authority to address ethical issues
Make employees aware that their individual actions form the ethical behavior of the company
Make managers and support available to assist in ethical conflict resolution
Eliminate the belief that unethical behavior is ever justified

14. Code of Ethics
Code of Ethics is a set of formal statements of what an organization expects as “right” business behavior
May be found within a Business Code of Conduct
Code of Ethics may contain values such as:
Trustworthiness
Respect
Responsibility
Fairness
Caring
Citizenship

15. Office of Social Responsibility & Ethics
Separate office and personnel
Manage organization’s ethics and legal compliance programs
Dedicated to fostering ethical behavior
Usually does not report directly to the board of directors
May hire outside support or hire within

16. Social Responsibility
Social Responsibility is a type of ethics
It addresses to what degree a company views its obligation to the community or society.
Traditionally, business was believed to only be responsible to its owners and shareholders, and its primary goal was to make a profit.
Some businesses take a broader view that their purpose is also to have a positive impact on society.
Most businesses fall somewhere in between the extremes and have some component of their business that tries to make the community or world a better place.

17. Examples of Social Responsibility
Green Management or recycling programs
Support for community programs
Contributions to local schools
Programs to encourage healthy lifestyle
Researching for alternative fuels
Commit to reduce pollution or construct “eco-friendly” buildings
Provide aid or supplies in times of disasters