Chapter 1 An Overview of Business Ethics

1-2 Why differentiate between rules/policies/law & ethics? the difference between an ordinary decision & an ethical one is the point where rules no longer serve values & judgment play a key role in ethics decisions employees need a “buffer zone” of expected ethical behavior

1-3 Business ethics... comprises principles & standards that guide behavior in the world of business whether a specific behavior is ethical or unethical is often determined by stakeholders – investors – customers – the community – employees – the legal system

1-4 Ethics & social responsibility have distinct meanings... social responsibility is the obligation a business assumes to maximize its positive effect while minimizing its negative effect on society social responsibility consists of the following responsibilities: – economic (satisfy investors) – legal (obey the law) – ethical (expected activities & behaviors) – philanthropic (desired activities & behaviors)

1-5 Before 1960: Ethics in Business... theological discussions of ethics emerged – Catholic social ethics included a concern for morality in business, workers’ rights & living wages – Protestants developed ethics courses in their seminaries & schools of theology (also, the Protestant work ethic encouraged frugality & hard work)

1-6 The 1960s: The Rise of Social Issues in Business... societal social consciousness emerged – as well as an anti-business sentiment JFK’s Consumer Bill of Rights ushered in a new era of consumerism – right to safety, to be informed, to choose & to be heard consumer protection groups fought for consumer protection legislation – Ralph Nader

1-7 The 1970s: Business Ethics as an Emerging Field... business professors began to write about social responsibility philosophers became involved in business ethics businesses became more concerned with their public image & addressed ethics more directly conferences were held & centers developed issues: bribery, deceptive advertising, price collusion, product safety, & the environment

1-8 The 1980s: Consolidation membership in business ethics organizations increased ethics centers provided: – publications, courses, conferences & seminars firms established ethics committees

1-9 The 1990s: Institutionalization of Business Ethics... Guidelines for Organizations set the tone for ethical compliance took preventative actions against misconduct; a company could avoid or minimize the potential penalties

1-10 Guidelines for Organizations... standards & procedures capable of detecting & preventing misconduct high level oversight care in delegation of authority effective communication (training) systems to monitor, audit & report misconduct consistent enforcement continuous improvement

and Beyond... a move from legally based ethics initiatives to culturally or integrity based programs realization that business ethics programs are good for business businesses are working more closely together, globally, to establish standards of acceptable behavior

1-12 Why study business ethics? reports of unethical behavior are on the rise society’s evaluation of right or wrong affects its ability to achieve its business goals stakeholder demands for ethics initiatives individual ethics is not enough helps identify ethical issues