1. BUS 302: BUSINESS ETHICS Nicos Rodosthenous PhD Lecture 1 02/10/20141Dr Nicos Rodosthenous

2. Perspectives on business ethics and values 1. Objectives  Give an account of the various arguments about the moral status of business, organizations and management.  Distinguish between values and ethics  Define traditional, modernist, neo-traditional, postmodern and pragmatic perspectives on values. 02/10/20142Dr Nicos Rodosthenous

3. Perspectives on business ethics and values 2. Definitions Ethics is meant the study of the means by which the morality of human actions can be appraised or evaluated. Business ethics are principles of right or wrong governing the conduct of business people – The text says, “the accepted principles of right and wrong” – But there are many differences of opinion among highly ethical business people 02/10/20143Dr Nicos Rodosthenous

4. Perspectives on business ethics and values Moral agency within organizations is the ability of people to exercise freely moral judgment and behavior without the fear of their employment and/or promotional prospects. Different assumptions are made about the relationships between:  Organizations and state;  Organizations and their staff 02/10/2014Dr Nicos Rodosthenous4

5. Perspectives on business ethics and values  Organizations and their various stakeholder groups (beyond the staff group) 3. Business and organizational values The main distinction is that ethics is a branch of philosophy and is concerned with formal academic reasoning about right and wrong, but values are the commonsense, often taken for granted, beliefs about right and wrong that guide us in our daily life. 02/10/2014Dr Nicos Rodosthenous5

6. Perspectives on business ethics and values Ethics and values have different sources. Ethics are drawn from the books and debates where theories about right and wrong are proposed and tested. Ethics have to be studied. Values are acquired through socialization and interactions with our friends, family and colleagues. Values are learned, not studied. 02/10/2014Dr Nicos Rodosthenous6

7. Perspectives on business ethics and values  3.1 Perceptions of values Values express a potential tension and people’s responses to this tension can be classified under five headings:  Traditionalist  Modernist  Neo-traditionalist  Postmodernist  Pragmatist 02/10/2014Dr Nicos Rodosthenous7

8. Perspectives on business ethics and values The position they take will influence their responses to ethical issues at work.  Right and wrong and legal and illegal  Legality and illegality are defined by the civil or criminal law to protect the people and the society. There are four categories: 1.Actions that are good and legal but not a legal obligation (may raise ethical issues) 2.Actions that are wrong and illegal (double whammy) 02/10/2014Dr Nicos Rodosthenous8

9. Perspectives on business ethics and values 3. Actions that are legal but bad (tourism and sustainability) 4. Actions that are good but illegal. Political obligation does not exhaust moral obligation. Discuss the case study of British Airways and Virgin Atlantic –Case study 2.18 page 60. 02/10/2014Dr Nicos Rodosthenous9

10. Perspectives on business ethics and values For example: Accountants and medical doctors have organizations that try to establish agreement in the profession. – And still there are major disagreements No one tries to establish agreement among general managers and marketers. 4. Religion, ethics and global diversity The world has many different ethical systems 02/10/201410Dr Nicos Rodosthenous

11. Perspectives on business ethics and values which mostly derived from different religions. Different systems can lead to different opinions about what is ethical or not. 5. Don’t start business with anyone unless you believe they have strong ethics. Work hard to understand your own ethics Work hard to apply them Work hard to understand others’ ethics 02/10/201411Dr Nicos Rodosthenous

12. Perspectives on business ethics and values 02/10/201412Dr Nicos Rodosthenous

13. Perspectives on business ethics and values 6. Ethical Issues in International Business Many ethical issues and dilemmas are rooted in differences in political systems, law, economic development, and culture. Some key ethical issues in international busines s Employment Practices –When work conditions in a host nation are clearly inferior to those in a 02/10/201413Dr Nicos Rodosthenous

14. Perspectives on business ethics and values multinational’s home nation. what standards should be applied? How much divergence is acceptable? Human Rights – Basic rights are not respected in many nations – ‘What is the responsibility of a foreign firm in a country where human rights are trampled 02/10/201414Dr Nicos Rodosthenous

15. Perspectives on business ethics and values Environmental Pollution – Environmental regulations (or enforcement) in host nations may be inferior to those at home Multinationals can produce more pollution than at home The tragedy of the commons occurs - The water in Mekong River Mekong River Basin - A Study of Water Management and...Article in the Internet. Mekong River Basin - A Study of Water Management and... 02/10/201415Dr Nicos Rodosthenous

16. Perspectives on business ethics and values Corruption – International businesses can, and have, gained economic advantages by making payments to government officials. – US passed the Foreign Corrupt Practices Act – Organization for Economic Cooperation and Development (OECD) adopted the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions 02/10/201416Dr Nicos Rodosthenous

17. Perspectives on business ethics and values OECD Recommendation for Further Combating Bribery of Foreign Public Officials in International Business Transactions. OECD Recommendation for Further Combating Bribery of Foreign Public Officials in International Business Transactions Good Practice Guidance on Internal Controls, Ethics and Compliance Good Practice Guidance on Internal Controls, Ethics and Compliance Social responsibility – Multinational firms have power, wealth from control over resources and ability to move production 02/10/201417Dr Nicos Rodosthenous

18. Perspectives on business ethics and values – Moral philosophers argue that with power comes the responsibility to give something back to the societies that enable them to prosper Advocates argue that businesses need to recognize their noblesse oblige (benevolent behavior that is the responsibility of successful people and enterprises ) 02/10/201418Dr Nicos Rodosthenous

19. Perspectives on business ethics and values 7. The Roots of Unethical Behavior Why do managers behave in a manner that is unethical? –Business ethics are not divorced from personal ethics –Business people sometimes do not realize that they are behaving unethical because they fail to ask if the decision is ethical. 02/10/201419Dr Nicos Rodosthenous

20. Perspectives on business ethics and values –The climate in some businesses does not encourage people to think through the ethical consequences of business decisions. –Pressure to meet unrealistic performance goals that can be attained only by cutting corners or acting in an unethical manner. –Leaders help to establish the culture of an organization and they set the example that others follow. 02/10/201420Dr Nicos Rodosthenous