1. Chapter 3: Ethical Behaviour and Social Responsibility  Ethics  Code of moral principles that sets standards of good or bad, or right or wrong, in one’s conduct.  Ethical behavior  What is accepted as good and right in the context of the governing moral code. Management Fundamentals - Chapter 3 1

2. What is Ethical Behaviour?  Law, values, and ethical behavior:  Legal behavior is not necessarily ethical behavior. eg. skipping class, untruthful to parents  Personal values help determine individual ethical behavior.  As personal values vary amongst people, so do their ethical standards.  Terminal values – preferences about desired end states (eg. destination/goal – freedom, happiness, etc.)  Instrumental values – preferences regarding means to desired end states (journey/process – honesty, ambition, etc.)  People will respond differently to each situation with ethical challenges. Management Fundamentals - Chapter 3 2

3. Cultural Issues in Ethical Behaviour  Cultural issues in ethical behavior are increasing as a result of globalization.  Views:  Cultural relativism  Ethical behavior is always determined by cultural context.  Cultural universalism  Behavior that is unacceptable in one’s home environment should not be acceptable anywhere else.  Argued that this is a form of ethical imperialism whereby people attempt to impose one’s ethical standards on other cultures. Management Fundamentals - Chapter 3 3

4. The extremes of cultural relativism and ethical imperialism in international business ethics. Management Fundamentals - Chapter 3 4 Source: Developed from Thomas Donaldson, “Values in Tension: Ethics Away from Home,” Harvard Business Review, vol. 74 (September-October 1996), pp. 48-62.

5. How international businesses can respect core or universal values: Respect for human dignity Create culture that values employees, customers, and suppliers. Keep a safe workplace. Produce safe products and services. Respect for basic rights Protect rights of employees, customers, and communities. Avoid anything that threatening safety, health, education, and living standards. Be good citizens Support social institutions, including economic and educational systems. Work with local government and institutions to protect environment. Management Fundamentals - Chapter 3 5

6. Ethics in the Workplace  An ethical dilemma occurs when choices, although having potential for personal and/or organizational benefit, may be considered unethical.  Ethical dilemmas include:  Discrimination – denying opportunities  Sexual harassment – inappropriate comments or actions  Conflicts of interest – personal gain through employment  Customer confidence – divulging consumer data  Organizational resources – using employment resources for personal use

7. Rationalizations for Unethical Behaviour  Ethical behavior can be rationalized by convincing yourself that:  Behavior is not really illegal.  Behavior is really in everyone’s best interests.  Nobody will ever find out.  The organization will “protect” you.

8. Factors influencing ethical behavior include:  The person  Family influences, religious values, personal standards, and personal needs.  The organization  Supervisory behavior, peer group norms and behavior, and policy statements and written rules.  The environment  Government laws and regulations, societal norms and values, and competitive climate in an industry.

9. Factors influencing ethical managerial behaviour: