1. BUSINESS & SOCIETY Ethics and Stakeholder Management
Chapter 6
BUSINESS & SOCIETY Ethics and Stakeholder Management
Carroll & Buchholtz 6e
BUSINESS’S ETHICS FUNDAMENTALS
Prepared by Deborah Baker Texas Christian University
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Business and Society: Ethics and Stakeholder Management, 6e • Carroll & Buchholtz Copyright ©2006 by South-Western, a division of Thomson Learning.  All rights reserved

2. Chapter 6 Learning Outcomes
Describe how the public regards business ethics.
Define business ethics and appreciate the complexities of making ethical judgments.
Explain the conventional approach to business ethics.
Analyze economic, legal, and ethical aspects of business using a Venn Model.
Enumerate and discuss the four important ethics questions.
Identify and explain three models of management ethics.
Describe Kohlberg’s three levels of developing moral judgment.
Identify and discuss the elements of moral judgment.
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3. Quote for the Day
Good people do not need laws to tell them to act responsibly, while bad people will find a way around the laws.
Plato
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4. Introduction to Chapter 6
Business Ethics
Public’s interest in business ethics increased during the last three decades
Public’s interest in business ethics has been spurred by the media
The Enron scandal has come to define modern ethics scandals
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5. Introduction to Chapter 6
2000 National Business Ethics Survey Findings
One in eight employees feel pressure to compromise their organization’s ethics standards
Two-thirds attribute this pressure to internal sources
One in three employees observes misconduct at work
Misconduct observed most include lying, withholding information, abusive behavior toward employees, misreporting time worked, and discrimination
One in three employees fears retaliation
Employees say that their organizations’ concern for ethics is a reason they continue to work there
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6. Business Ethics: What Does It Really Mean?
involves a discipline that examines good or bad practices within the context of moral duty and obligation
Moral conduct
relates to principles of right and wrong in behavior
Business Ethics
concerned with good and bad or right and wrong behavior and practices that take place in business
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7. Business Ethics: What Does It Really Mean?
Descriptive Ethics
involves describing, characterizing and studying morality
focuses on “What is”
Normative Ethics
involves supplying and justifying moral systems
focuses on “What should be”
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8. Conventional Approach to Business Ethics
The conventional approach to business ethics involves a comparison of a decision or practice to prevailing societal norms
Decision or Practice
Prevailing Norms of Acceptability
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9. Question ?? How ethical are you???
Bank teller (human) gives you an extra $20 when you cash a $100 check.
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10. Sources of Ethical Norms
Fellow Workers
Family
Friends
The Law
Regions of Country
Profession
Employer
Society at Large
Local Community
Religious Beliefs
The Individual
Conscience
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11. Ethics and the Law Overlap Law often represents an ethical minimum
law reflects society’s codified ethics
Ethics often represents a standard that exceeds the legal minimum
Ethics
Law
Overlap
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12. Making Ethical Judgments
Behavior or act that has been committed
Prevailing norms of acceptability
Value judgments and perceptions of the observer
compared with
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13. Ethics, Economics, and Law
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14. Four Important Ethical Questions
What is?
What ought to be?
How to we get from what is to what ought to be?
What is our motivation for acting ethically?
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15. Three Models of Management Ethics
Immoral Management
A style devoid of ethical principles and active opposition to what is ethical
Moral Management
Conforms to high standards of ethical behavior
Amoral Management
Intentional: does not consider ethical factors
Unintentional: casual or careless about ethical factors
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16. Characteristics of Immoral Managers
Intentionally do wrong
Self-centered and self-absorbed
Care only about self or organization’s profits
Actively oppose what is right, fair, or just
Exhibit no concern for stakeholders
Are the “bad guys”
An ethics course probably would not help them
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17. Characteristics of Moral Managers
Conform to high level of ethical or right behavior
Conform to high level of personal and professionals standards
Ethical leadership is commonplace
Goal is to succeed within confines of sound ethical precepts
High integrity is displayed
Embrace letter and spirit of the law
Possess an acute moral sense and moral maturity
Are the “good guys”
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18. Characteristics of Amoral Managers
Intentionally Amoral Managers:
Don’t think ethics and business should “mix”
Business and ethics are existing in separate spheres
A vanishing breed
Unintentionally Amoral Managers:
Don’t consider the ethical dimension of decision making
Don’t “think ethically”
Have no “ethics buds”
Well-intentioned, but morally casual or unconscious
Ethical gears are in neutral
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19. Three Models of Management Morality and Emphasis on CSR
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20. Making Moral Management Actionable
Senior management leads the transition from amoral to moral management
Business ethics training
Codes of conduct
Mission/Vision statements
Ethics officers
Tighter financial controls
Ethically sensitive decision-making processes
Leadership by example
Recognize that amoral management exists
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21. Developing Moral Judgment
Kohlberg’s Levels of Moral Development
Level 1
Preconventional Level
Level 2
Conventional Level
Level 3
Postconventional Level
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22. Developing Moral Judgment
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23. Why Managers Behave Ethically
Most of Us
Many of Us
Very Few Of Us
1. To avoid some punishment
2. To receive some reward
3. To be responsive to family, friends, or superiors
4. To be a good citizen
5. To do what is right, pursue some ideal
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24. Feminist Views of Kohlberg’s Research
Recognize their own needs and needs of others
Establish connections and participate in social life
Sole Concern for Self
Level 3
Level 2
Level 1
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25. External Sources of a Manager’s Values
Philosophical values
Cultural values
Legal values
Religious values
Professional values
The Web of Values
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26. Internal Sources of a Manager’s Values
“Norms” shape business ethics
Respect for the authority structure
Loyalty to bosses and the organization
Conformity to principles and practices
Performance
Results
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27. Elements of Moral Judgment
Moral imagination
Moral identification and ordering
Moral evaluation
Tolerance of moral disagreement and ambiguity
Integration of managerial and moral competence
A sense of moral obligation
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28. Next Time Case: Martha Stewart (#5)
DUE – Outline for paper (one page) – use roman numerals and bullet points.
5 points for outline, 5 points for citations (10+)
Google for an outline sample
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