Business ethics fundamentals From Buchholtz and Carroll chapter 7 Is nowhere safe? Is everyone a hypocrite or liar? Are all standards, and examples corrupt? Enron,WorldCom, Arthur Andersen Parmalat …. Racial discrimination and sexual harassment. Texaco and cost of $196 million settlement for racial discrimination on equal pay. Recent pressure on the Catholic church, BP in the Gulf of Mexico… the Pakistan cricket betting allegations– inappropriate unethical behaviour and responses. Universities under attack from plagiarism.

Public view of business ethics Business ethics as contradiction ‘Only a fine line between a business executive and a crook’ page 237 Trust gap for businesses even after Enron. Corrupt executives who kept own wealth and broke companies and put employees out of work Greed for money and power : weakening of personal values

Executives can be ethical and successful Media financial press do not protect public. Any ethical lapse in a company erodes its culture Society is seeking (2000s) new emphasis on values, morals, ethics

Has business ethics really deteriorated? Measurement? But media do report ethical problems more Is society actually changing? Unethical practices were once seen as ethical. Examples?

Ethics =good and bad, moral duty and obligation Morality very similar to ethics = fairness and justice and the difficult question of equity Business ethics. In business context

3 major approaches to Business Ethics Conventional : how normal society views business ethics – this chapter Principles : use of principles or guidelines to direct behaviour actions and policies chapter 8 for this and tests approaches Ethical tests: short questions to guide ethical decision making

Conventional approaches/ prevailing norms of acceptability Bases are family, friends, religious beliefs the local community, region of country (but is this too American?) one’s employer, law the profession, etc Conscience: but is that erratic? Advertising as deceitful? What are acceptable conventions? Clash of norms: norms from culture and society against norms derived from employment law and business ethics (example is sexual innuendo)

Ethics and the law Ethics at a higher level to law, but overlap Law as minimum standards of conduct and behaviour but law is codified ethics page 246. Difference between letter and spirit of law. Example is Enron. Also Hewlett Packard which used questionable legal means to gather leaked information from board members.

Law does not address all ethical questions. Issue of illegal behaviour by companies. Why do they do it? What are the consequences? Case for next slide. ‘You should not steal someone else’s property’. Paper clips, use of company phones? Consensus in principle not practice??

Making ethical judgements Stage 1. Decision action or practice Stage 2. Compare the practice with prevailing norms of acceptability Stage 3. Come to ethical (value) judgements, different personal interpretations. Working out stage 2 is very hard Danger of ethical relativism: pick and choose source of norms.

4 ethical questions =(tough central issues) What is? Real situation is hard to find.. What ought to be? Rightness fairness or justice of a situation. What should mgt do? From what is to what ought to be: practical question for management.. What do we intend to accomplish? What circumstances permit us to accomplish? What are we able to accomplish? Motivation for being ethical? Manipulative or selfish

3 models of management ethics 1 Immoral management : no principles implied opposition to ethics 2 moral management : includes professionalism, view of the law. 3 Amoral management: company excludes moral considerations as irrelevant or is too casual about morality

Kohlberg and Gilligan Level 1 Preconventional Level 2 Conventional level Level 3 Postconventional, autonomous or principled level. Men deal with ethics in terms that are impersonal,impartial, abstract. Challenged by Gilligan with her view that women value relationship maintenance and hurt avoidance

BBC Radio 4 Integrity test Use this link to find out your integrity score as set up by the Essex Centre for the Study of Integrity: d_ / stm d_ / stm

Situations: your views? Deloitte and Touche USA 2007 Ethics and the workplace survey Stealing petty cash Cheating on expenses Taking credit for another person’s accomplishments Lying on time sheets Coming into work hungover

Telling a demeaning (racist) joke Taking office supplies for personal use Immoral management: Showing preferential treatment towards certain employees Rewarding employees who display wrong behaviour Harassing a fellow employee (verbally sexually racially)