Introduction to Issues in

Business Ethics

Two opposing views on

Business EthicsBusiness Ethics is simply a field of human Business Ethics is simply a field of human

activity and as such is governed by the activity and as such is governed by the same moral principles as in other spheres same moral principles as in other spheres of human lifeof human life

Business can be seen as a form of warfare Business can be seen as a form of warfare in which the rules of the jungle applies.in which the rules of the jungle applies.

Cultural & Religious Traditions

Social & Economic Situations

Ethical Principlesof Analysis

Value Judgments Moral Moral Standards Dilemmas

Benefits toSome

Harm toOthers

Relationships between Morals, Values and Ethics

Source: L T Hosmer (1994)

Ethics and Behaviour

What happens to the morale of managers ?What happens to the morale of managers ? Can discipline be enforced when Can discipline be enforced when

management are seen as corrupt and sleazy? management are seen as corrupt and sleazy? Can firms attract good people if they are seen Can firms attract good people if they are seen

as operating unethically ?as operating unethically ? Can companies sustain good long term Can companies sustain good long term

relationships with its key stakeholders if it relationships with its key stakeholders if it disregards good ethical standards ?disregards good ethical standards ?

Ethical IssuesEthical Problems as Management Ethical Problems as Management

DilemmasDilemmas

Ethical Problems and Issues are Complex Ethical Problems and Issues are Complex and have far reaching consequencesand have far reaching consequences

Ethical Problems as Mgmt Dilemmas

Dilemmas involved in environmental Dilemmas involved in environmental protectionprotection

Dilemmas involved in the issues of safetyDilemmas involved in the issues of safety Dilmmas involved in the issues of privacyDilmmas involved in the issues of privacy Dilemmas involved in the issues of location Dilemmas involved in the issues of location

and costs ......and costs ........downsizingdownsizing Dilemmas involved in issues of competitionDilemmas involved in issues of competition

Some Examples of Ethical Issues

Insider dealing and making a false marketInsider dealing and making a false market Cartel behaviour and price fixingCartel behaviour and price fixing Advertising claims that are falseAdvertising claims that are false Product performanceProduct performance Pollution and environmental issuesPollution and environmental issues Community relations and jobs issuesCommunity relations and jobs issues Advertising approachesAdvertising approaches

Characteristics of Ethical Decisions in Management

Most ethical decisions have extended Most ethical decisions have extended consequencesconsequences

Most ethical decisions have multiple Most ethical decisions have multiple alternativesalternatives

Most ethical decisions have uncertain Most ethical decisions have uncertain outcomesoutcomes

Most ethical decsions have personal Most ethical decsions have personal implicationsimplications

How can we Analyse Ethical Issues ?

Economic Analysis Economic Analysis - Cost-benefit etc..- Cost-benefit etc..

Legal Analysis Legal Analysis - Can we legally do this - Can we legally do this and what is the legal downside ?and what is the legal downside ?

Ethical Analysis Ethical Analysis - What is the ethical and - What is the ethical and moral responsibility that we face ?moral responsibility that we face ?

Ethical Decision Process

Step One Evaluate decision from ethical standpoint.Identify affected stakeholders .

Step Two Evaluate decision from ethical standpoint.What are the moral issues in this case ?

Step Three Establish moral intent

Step Four Engage in ethical behaviour

Ethical

Emerging Ethical

Responsive

Legalistic

Amoral

Balanced Concern

Unbalanced Concern

Con

cern

for

Pro

fits/

Eth

ics

Stage 5

Stage 4

Stage 3 Stage 2

Stage 1

Development Stages

Ethical Balance in Business Operations

Source: Reidenbach & Robin

Possible Responses to Ethical Dilemmas

Avoid Thinking About itAvoid Thinking About itObey OrdersObey OrdersLeave the OrganisationLeave the OrganisationConscientiously ObjectConscientiously ObjectSecretly Tell the Press or GovernmentSecretly Tell the Press or GovernmentPublicly Tell the Press or GovernmentPublicly Tell the Press or GovernmentBuild Consensus for Change InternallyBuild Consensus for Change Internally

Finally

Live HonourablyLive HonourablyHurt NobodyHurt NobodyRender to each his DueRender to each his Due