1. ETHICAL BEHAVIOUR AND SOCIAL RESPONSIBLITY

2. CORPORATE ETHICAL FAILURES

3. ANOTHER CANADIAN EXAMPLE Bre-X was a gold mining company. In 1989, they bought land in Indonesia. Over the course of 6 years, the estimates of how much gold was in the ground there went from 2 million troy ounces to 70 million troy ounces (2.17 million Tons) That would be worth about 85 billion USD today.

4. As news made it out that Bre-x struck it big, the value of their stock went from cents to $280 as investors wanted to cash in. This made Bre-X worth over $6 billion. What do you think the problem was?

5. Micheal de Guzman worked for the Indonesian subsidiary of Bre-X and wanted recognition. He convinced some partners to join him in a plan. He ended up jumping from a helicopter. One person was charged, was not convicted, and lives in the Cayman Islands (where he can not be sent back to Canada)

6. Ethical failures are not necessarily because of bad business decisions or bad research. Lying, cheating, threatening, and GREED are the root causes. When this behaviour is carried out by top management, what do you think happens?

7. WHAT IS ETHICAL BEHAVIOUR? Ethics are “a code of moral principles that sets standards of good or bad, or right and wrong, in one’s conduct.” They allow us to make decisions between two or more courses of action. Ethical behaviour is behaviour that is accepted to be “good and right” as opposed to “bad and wrong.”

8. LAWS, VALUES, AND ETHICAL BEHAVIOUR Are laws ethical?

9. LAWS, VALUES, AND ETHICAL BEHAVIOUR Is it ethical to take 2 hours for a paid job if it only takes you 1? Is it ethical to make personal phone calls while at work? Is it ethical to call in sick if you are not really sick? What if you see a co-worker breaking a rule and you don’t say anything?

10. LAWS, VALUES, AND ETHICAL BEHAVIOUR When people are asked to do things that violate their personal beliefs, there can be ethical problems. Sometimes, people will say “It’s legal? Let’s do it!” Others need to consider it more than that. Values are beliefs about what is appropriate behaviour. The difference in values is what determines a person’s behaviour. -These can be cultural, religious, etc.

11. LAWS, VALUES, AND ETHICAL BEHAVIOUR Terminal values are preferences about desired end states. -This mean…what do you think? Some examples are: self-respect, family security, freedom, inner harmony, happiness Instrumental values are preferences regarding the means to get to the desired ends. Some examples are: honesty, ambition, courage, imagination, self-discipline.

12. REAL WORLD EXAMPLE Share-buying “Black-out periods.” Prevents “insider trading.”

13. ALTERNATIVE VIEWS OF ETHICS There are 4 major views. They are very important to know: Utilitarian Individualism Moral-rights Justice

14. UTILITARIAN VIEW Began in the 19 th century by John Stuart Mill. Summed up best as: Business managers use profits, and other criteria to determine the “best” for the majority.

15. UTILITARIAN VIEW Do we lay-off 1000 employees now and keep the business going? OR Do we keep everybody working and lose the business in six months? This is a very popular view. What other examples can you think of?

16. INDIVIDUALISM VIEW This is the belief that “one’s primary commitment is long-term advancement of self-interests.” Lying or cheating for short-term gain should not happen, because if that person profits, others will do it. This prevents long-term interests from happening. It is supposed to promote honesty and integrity.

17. MORAL-RIGHTS VIEW This is behaviour that “respects and protects the fundamental rights of people.” John Locke said that we all have the right to life, liberty, and fair treatment under the law. Nothing should violate these rights. Companies that embrace this view have protections for employees right to free speech, consent, safety, and conscience.

18. JUSTICE VIEW Broken down into three sub-sections, but all deal with the idea that people should be treated impartially and fairly, according to laws and legal standards.

19. PROCEDURAL JUSTICE Are policies fairly administered? Does a charge of sexual harassment against a top executive receive the same level of attention as a first-level supervisor? Due process must be followed. -”All legal rights of a person must be respected by the state.”

20. DISTRIBUTIVE JUSTICE Are outcomes allocated without respect for individual characteristics based on ethnicity, race, gender, age, or other? Does a woman who works with men doing the same job get paid the same amount?

21. INTERACTIONAL JUSTICE Is everyone involved treated with dignity and respect? Does the bank loan officer explain to a failed loan applicant why they were turned down?

22. CULTURAL ISSUES IN ETHICAL BEHAVIOUR Nowadays, this is a huge issue. Globalization has made culture a large part of any discussion on ethics. Three categories to discuss.

23. CULTURAL RELATIVISM “When in Rome, do as the Romans do.” What does this mean to you? Cultural relativism is the belief that there is no single right way to do things; ethical behaviour is determined by context. Using child labour in a country where there are no laws against it, and where the culture is ok with using children to work, is an example of this.

24. UNIVERSALISM Some ethical standards apply across all cultures. If you do not do something in another country because you would not at home, this is an example. Some would say that it is an example of the next one though.

25. THE SCALE OF ETHICS - No cultures ethics are superior -Values and practices of the local setting determine what is right and wrong. -No universal or absolute rules -”When in Rome, do as the Romans do.” -Certain truths apply everywhere -Universal values transcend cultures in determining what is right and wrong Cultural RelativismEthical Imperialism

26. ETHICAL IMPERIALISM Usually this is seen as an attempt to impose one’s ethical standards on other cultures. This is very hard to do. A compromise is usually made, where some rights should be insisted upon, but local cultures and traditions can be respected. Like, Xin employing children to work in his factory but he pays for schooling for them when they are not working.

27. ETHICAL DILEMMAS Situations that “requires a choice regarding a possible course of action that, although offering the potential for personal or organizational benefit, or both, may be considered unethical.” Right and wrong is not clear. “I define an unethical situation as one in which I have to something I don’t feel good about.”

28. POTENTIAL PROBLEM AREAS Discrimination: An employee is negatively affected because of their race, religion, gender, age, or other non-relevant aspects.

29. POTENTIAL PROBLEM AREAS Sexual Harassment: Making a co-worker feel uncomfortable through inappropriate comments or actions regarding sexuality; or a manager requesting sexual favours in return for favourable job treatment.

30. POTENTIAL PROBLEM AREAS Conflicts of interest: Taking a bribe or kickback or extraordinary gift in return for making a decision favourable to the gift giver.

31. POTENTIAL PROBLEM AREAS Customer confidence: Giving another party privileged information regarding the activities of a customer.

32. POTENTIAL PROBLEM AREAS Organizational Resources: Using official stationery or a company email account to communicate personal opinions or make requests from community organizations.

33. HOMEWORK W-9 “Tom’s of Maine: Where “Doing Business” Means “Doing Good.” Read the article, answer questions 1-3