lec 4 business ethics [compatibility mode]

7/26/2019 Lec 4 BUSINESS ETHICS [Compatibility Mode]

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Social & Legal Issues

Business Ethics and Values


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Business Ethics

The application of general ethical concepts to the unique situations confronted

.

principles or rules can be used as guidance in business situations.


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TheThe 44


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There is no universal standard by which morality can be judged

What is correct for one society may be wrong for another


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Egoism

One ought to act in his or her own self interest

Ethical behavior is that which promotes ones own self interest


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Utilitarianism

The morality of an action can be determined by its consequences

An action is ethical if it promotes the greatest good for the greatest number


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Deontologism

Derived from the Greek word for Duty

Actions are not justified by their consequences. Factors other than good

outcomes determine the rightness of actions


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Company value

Customer Focus: Customers are the focus of our business. Align all

business objectives with the expectations of customers. Build long term

. ,

straight-forward and committed in all dealings with customers.

Continuous Improvement: Committed to improving everything.

The relentless pursuit of excellence drives our daily activities. Operate in an

skeptical of maintaining the status quo.


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Company values

ualit : A oal of a com an is to be the reco nized leader in our

marketplace; recognized for innovation, quality, responsiveness and value.

Continuously strive to be the standard by which performance is measured.

Respect for the Individual: Treat people with dignity, fairness and courtesy.

Create an inclusive environment that is focused on a common ur ose.

Continual invest in our people. Diversity in people and perspective is valued

Teamwork: Success is achieved through collaborative efforts committed to

achieving


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Innovation: Apply original thought, creativity, and sound business

judgment to overcome obstacles, meet aggressive goals and improve

products and processes.

Committed to technical and market leadership

Integrity: Conduct business with the highest standards of ethics,

developing a mutual trust with each other, customers, shareholders,

suppliers and the community. Integrity is the foundation of everything.


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-""

silent about things that matter."silent about things that matter."

--Martin Luther King, Jr.Martin Luther King, Jr.


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-One w o revea s wrong- o ng w t n an organ zat on

to the public or to those in positions of authority.ne w o sc oses n ormat on a out m scon uct n

their workplace that they feel violates the law or.

One who speaks out, typically to expose corruption or.


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-Internal Whistle-Blowing External Whistle-Blowing

When an individual When and individual

revelations within theor anization.

revelations outside theor anization.


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Altruistically MotivatedAltruistically Motivated UtilitarianUtilitarian

Uninterested in Altering TheirUninterested in Altering Their

Allows Own Attitudes and BeliefsAllows Own Attitudes and Beliefs

to Guide Themto Guide Them

Often are Well Educated andOften are Well Educated and

Holds Professional PositionsHolds Professional Positions


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Do t anonymous yDo t anonymous y

let the evidence speak for itself and protect yourself if possiblelet the evidence speak for itself and protect yourself if possible o n a groupo n a group

charges have more weight and wont seem like a personal vendetta.charges have more weight and wont seem like a personal vendetta.

leave interpretation of facts to others.leave interpretation of facts to others.

start with your immediate supervisor or follow the standardstart with your immediate supervisor or follow the standard

reporting procedurereporting procedure Work through external channelsWork through external channels

go public (biggest risk)go public (biggest risk)


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- Force to eave

organization/demotion

Physical or

psychological isolation re ty ru ne

Family, health, and/or

Organization

experiences loss of

e n eopar y Outrage and

money, restitution,productivity, and

v s veness o peop edirectly or indirectly

positive reputations.

Incarceration


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The Whistleblower

Protection Law ~ 1989

The Whistleblower Act

~


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Cynthia CooperCynthia CooperWorldComWorldCom

Coleen RowleyColeen RowleyFBIFBI

SherronSherron WatkinsWatkinsEnronEnron


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Former Vice President of Enron Corporation

-to accounting irregularities within thecompany

Warned that Enron 'might implode in a waveof accounting scandals.'

Testified before Congressional Committeesfrom the House and Senate investigating

Enron's demise.

Lauded in the press for her courageousactions, but left her job at Enron after a fewmon s w en s e wasn g ven muc o o


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FBI staff attorney

Wrote 13-page memo to FBI Director about pre-9/11 intelligence in May 2002

Testified for the Senate Judiciary Committee

Concerned the FBI was becoming morebureaucratic and micromanaged

Helped government focus on better intelligence

management

Fanny Pack


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WorldComs Director of Internal Audit

Her team discovered $3 billion in questionableexpenses

undocumented expenses

Disclosed findin s WorldCom stock frozencorporate credit rating went from B+ to CCC-

Remained as VP of Internal Audit, not promoted, nogra u e, resen e y emp oyees


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Case on ca unson s t e env ronmenta comp ance manager or a

small plastics manufacturing company. She is currently faced

with the decision whether or not to s end mone on newtechnology that will reduce the level of a particular toxin in thewastewater that flows out the back of the factory and into a

.

The factory's emission levels are already within legal limits.However Jonica knows that environmental re ulations for thisparticular toxin are lagging behind scientific evidence. In fact,a scientist from the university had been quoted in the

,this level, the fish in the lakes and rivers in the area might soonhave to be declared unsafe for human consumption.


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Case urt er, compan es n t e reg on on t engage n some se -

regulation on this issue, there is reason to fear that the

overnment backed b ublic o inion ma forcecompanies to begin using the new technology, and may alsobegin requiring monthly emission level reports (which would

.

But the company's environmental compliance budget is tight.Askin for this new technolo to be installed would utJonica's department over-budget, and could jeopardize thecompany's ability to show a profit this year.


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What motives would the company have toinstall the new technology?

delay installing the new technology?

Why might the companies in this region prefer

for the overnment to im ose new re ulations?


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Case an a e wor s as a c er or vco nv ronmen a erv ces, a sma

toxic-waste disposal company.

The company has a contract to dispose of medical waste from a local. ,documents that suggest that Avco has actually been disposing of someof this medical waste in a local municipal landfill. Chantale is shocked.She knows this practice is illegal. And even though only a small

portion of the medical waste that Avco handles is being disposed ofthis way, any amount at all seems a worrisome threat to public health.

Chantale gathers together the appropriate documents and takes them to" ' , . , ,

that sort of thing is your concern, or mine. We're in charge of record-keeping, not making decisions about where this stuff gets dumped. I

su est ou dro it."


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Case e nex ay, an a e ec es o go one s ep ur er, an a o nge a

van Wilgenburg, the company's Operations Manager. Angela is clearlyirritated. Angela says, "This isn't your concern. Look, these are the sorts ofcost-cuttin moves that let a little com an like ours com ete with ourgiant competitors. Besides, everyone knows that the regulations in this areaare overly cautious. There's no real danger to anyone from the tiny amountof medical waste that 'slips' into the municipal dump. I consider this matter

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Chantale considers her situation. The message from her superiors was loudand clear. She strongly suspects that making further noises about this issue

' . ,management. They've always seemed like honest, trustworthy people. Butshe was troubled by this apparent disregard for public safety. On the other

hand, she asks herself whether maybe Angela was right in arguing that theanger was m n ma . anta e oo s up t e p one num er o an o r enwho worked for the local newspaper.


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Questions for Discussion

What are the reasonable limits on loyalty to

one's emp oyer? Would it make a difference if Chantale had a

position of greater authority?

ou ma e a erence an a e a

scientific expertise?

lec 4 business ethics [compatibility mode]

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