3 Foundations of Ethical Behavior Individuals and companies must behave responsibly, based on certain ethical codes of conduct (what is right or wrong)Our moral reasoning guiding our decisions and actions can be….Teleological-decisions are based on the consequences of the actionUtilitarianism-an action is right if produces greatest amount of goodDeontological-moral reasoning occurs per se, independently, consequence is not an issue
6 Reward Punishment Model of Ethical Behavior in Business (Un)ethicalBehaviorEconomicRewardQuantum ofPunishmentProbability ofPunishment~>*Source: Waheeduzzaman and Myers (2010), Influence of Economic Reward andPunishment on Unethical Behavior: An Empirical Study
7 Explanation of the Model The premise of the model is, ethical or unethical behavior depends on the relationship among three factors:economic reward or benefit that a businessman receives from the unethical practicethe quantum (severity) of punishment the society imposes for such wrong-doingand the probability of receiving the punishment.Severity of punishment and its probability work as a deterrent for unethical behavior.A businessman will risk the practice of unethical behavior as long as the economic reward is significantly greater than the product of punishment and its probability.
17 Ch 3 Discussion Questions Explain the reward punishment model of ethical behavior in business.Explain the foundations of ethical behavior.What is Corporate Social Responsibility? Explain the Pyramid of Corporate Social Responsibility.Explain its arguments for and against.17