Ethics and Ethics and Corporate Corporate

ResponsibilityResponsibilityChapter Three

McGraw-Hill/Irwin Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.

EthicsEthics

Ethics The system of rules

that governs the ordering of values

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Telling the Truth and Lying: Possible Telling the Truth and Lying: Possible OutcomesOutcomes

3-3Table 3.1

EthicsEthics

Ethical issue Situation, problem,

or opportunity in which an individual must choose among several actions that must be evaluated as morally right or wrong

Business ethics The moral principles

and standards that guide behavior in the world of business.

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Ethical SystemsEthical Systems

Moral philosophy Principles, rules, and values people use in

deciding what is right or wrong

Universalism The ethical system stating that all people should

uphold certain values that society needs to function.

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Ethical SystemsEthical Systems

Egoism An ethical system defining acceptable behavior

as that which maximizes consequences for the individual

Utilitarianism An ethical system stating that the greatest good

for the greatest number should be the overriding concern of decision makers.

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Ethical SystemsEthical Systems

Relativism Philosophy that bases ethical behavior on the

opinions and behaviors of relevant other people

Virtue ethics Classification of people based on their level of

moral judgment.

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Ethical SystemsEthical Systems

Kohlberg’s model of cognitive moral development Perspective that what is moral comes from what

a mature person with “good” moral character would deem right.

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Some Ethical Issues inSome Ethical Issues inBusinessBusiness

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A Process for Ethical Decision MakingA Process for Ethical Decision Making

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Figure 3.1

The Business Costs of Ethical FailureThe Business Costs of Ethical Failure

3-11Figure 3.2

Corporate Social ResponsibilityCorporate Social Responsibility

Economic responsibilities To produce goods and

services that society wants at a price that perpetuates the business and satisfies its obligations to investors.

Legal responsibilities To obey local, state,

federal, and relevant international laws

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Corporate Social ResponsibilityCorporate Social Responsibility

Philanthropic responsibilities Additional behaviors

and activities that society finds desirable and that the values of the business support.

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Pyramid of Global Corporate SocialPyramid of Global Corporate SocialResponsibility and PerformanceResponsibility and Performance

3-14Figure 3.3

Ecocentric ManagementEcocentric Management

Ecocentric management Goal is the creation of sustainable economic

development and improvement of quality of life worldwide for all organizational stakeholders.

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