Unit 1 AssessmentBusiness Ethics

Question 1

Review the ethical cycle (Page 19). Discuss a decision you have made (at home or the workplace), and describe the steps of the cycle in relation to your decision making. Now review the section of rationalizing unethical behavior (page 25). What is the relationship between the ethical cycle and the three simple ethical tests used for business decisions?

On some occasions, solving ethical problems may become a complex process; we do need a

systematic approach to solve them. The textbook identifies a systematic approach which may be

utilized in order to understand the underlying dynamics of the ethical decision making; it is

identified as the ethical cycle (Stanwick & Stanwick, 2009). The ethical cycle consists of five

important steps, which include; moral problem statement, problem analysis, options for actions,

ethical judgment, and reflection. I will discuss the various steps of the ethical cycle in more

detail, and in addition, discuss a decision which I have made utilizing the ethical cycle steps.

The start of the ethical cycle is the formulation of a moral problem. A special case of a moral

problem is the moral dilemma. In this case, there are two positive moral values/norms that

cannot be fully realized at the same time. Instead, one action only realizes one moral value,

while another action realizes the other moral value (Stanwick & Stanwick, 2009).

A good moral question/problem statement must meet three conditions. It must clearly state

what the problem is, it must state for whom it is a problem, and it must be clear why/how it is a

moral problem (Stanwick & Stanwick, 2009). However, it will often not be possible to fully

formulate the moral problem precisely when the ethical cycle is started. In my work situation, the

moral problem is; I am upgrading a piece of machinery, upon the start of the project, I have been

made aware that there is no hard wire removal of power within the safety circuit. The safety

interlocks of the machine are strictly controlled by programming. There are numerous

individuals which are affected by the resolution of the problem, including, engineers, machine

operators and skilled tradesman. In order to update the safety circuit of the machine, the

machine will need to be completely re-wired, which will drastically affect the overall funds

available for the project. So what should I do? Keep quiet and continue with the upgrade, and

pretend that I am unaware there is a issue with the safety circuit, or make everyone aware of my

concerns?

Secondly, there is the problem analysis. During this step, the relevant elements of the moral

problem are described. There are three important elements: the interests of the stakeholders, the

relevant moral values and the relevant facts (Stanwick & Stanwick, 2009). Unfortunately, facts

aren’t always entirely clear. In my situation the shareholders are affected, due to the fact if there

is an injury or someone killed due to the deficiencies of the machine safety circuit, the company

will be faced with an enormous law suit. Also, as an electrical engineer, I am obligated by law to

address and rectify the situation since I have become aware that there is an issue.

Thirdly, we need to generate possible options for actions. During this step creativity is of

major importance. Also, the strategy of cooperation can be useful in order to develop

alternatives. In this strategy, stakeholders are consulted for possible actions to solve the problem

(Stanwick & Stanwick, 2009). This may often lead to win-win situations. And, next to the

standard options, the option of whistle-blowing should also be kept in mind as a last resort. In

my situation, I called a meeting with my Team Manager and Lead Engineer. I informed them

about the situation of the machine deficiencies, and instructed them that it will put us over

budget to rectify the situation.

The fourth step of the ethical cycle is the ethical judgment step; the moral acceptability of the

various options for action is evaluated. This can be done on the basis of formal frameworks and

informal frameworks. Formal frameworks include codes of conduct and ethical theories like

utilitarianism and duty ethics (Stanwick & Stanwick, 2009). Examples of informal frameworks

are intuition and common sense. When using intuition, you choose the action that is intuitively

most acceptable. When using common sense, you weigh the options for the possible actions, in

the light of the relevant values. In my situation, I was always taught to practice due diligence,

and as I mention earlier, I am obligated to address the concern of the safety circuit. This is my

number one priority, once this addressed and resolved, then I may address the machine upgrade

as initially I initially intended.

The final step of the ethical cycle is the reflection. A reflection of the options that were

considered viable in the previous step is required in order to establish the final course of action

(Stanwick & Stanwick, 2009). It is during the reflection stage that the outcomes of the ethical

judgment stage are further evaluated so a definitive course of action can be determined. It is

important to note that different ethical frameworks don’t always lead to the same conclusion. In

my situation, I did not proceed with the machine upgrade as initially discussed; instead, I re-

engineered the safety circuit so that it satisfied the requirements as becoming a category 4 safety

circuit. My actions did not go unnoticed, the following year I received the Ford Health and

Safety award for my actions.

Ethics is very well known for being about doing the right thing, and not just presenting the

right idea. Many corporations are not responsible for making ethical decisions, although the

employees of that corporation have the overall responsibility of the decisions being made,

whether is ethical or unethical. There are three steps which have been identified by the Institute

of Business Ethics; they include transparency, effect and fairness (Stanwick & Stanwick, 2009).

Transparency "refers to deciding if one accepts having others know what one has decided"

(Stanwick & Stanwick, 2009, p.25). In other words, am I happy to make my decision public,

especially to the people affected by it? Effect refers to determining who the decision affects or

impacts. Therefore in an ethical situation, have I fully considered harmful effects of my

decision? How may I avoid them? The final step is fairness, which refers to determining if the

decision would be considered by those affected by it. In this step you need to consider all the

individuals who are involved even the stakeholders. Therefore the ethical cycle and the three

simple ethic tests both go hand in hand, they are equally important in order to properly make the

correct ethical decision.

References

Stanwick, P.A., & Stanwick, S.D. (2009). Understanding business ethics. Upper Saddle River, NJ: Pearson-Prentice Hall.

Question 2

Discuss the eight ethical principles in the Global Business Codex. Using these principles, describe an example of a company that does follow one of these principles, and then describe an example of a company that does not follow one of the principles/

The Global Business Standards Codex contains a set of principles as well as a set of conduct

standards for putting those principles into practice. The GBS Codex is not intended for

individuals to adopt as is, but is meant to be used as a benchmark by those wishing to create their

own world-class code. The provisions of the codex must be customized to a company's specific

business and situation; individual companies' codes will include their own distinctive elements as

well (Stanwick & Stanwick, 2009). What the codex provides is a starting point grounded in

ethical fundamentals and aligned with an emerging global consensus on basic standards of

corporate behavior. The text has noted eight ethical principals, which include;

Fiduciary Principle, each officer has a legal fiduciary duty to act in the best interests of the

stakeholders and other employees within the firm. A fiduciary may carry out the company’s

business in a diligent and loyal manner, with the degree of honesty which is expected of a

trustee. In addition, they must promote the company’s legitimate interests in a diligent and

professional manner (Strickland, 2011). They must also maintain the company’s economic

health and safeguard the company’s resources and ensure their prudent and effective use. It is

also assumed that the employees will refrain from giving and receiving excessive gifts and

entertainment therefore providing a fair and competitive return on investment (Stanwick &

Stanwick, 2009). The employee must only use its position and company resources for company

purposes only, and may not disclose potential conflicts between personal and company interests.

The employee must refrain from activities involving actual conflicts of interest, such as self

dealing and competing with the company. It is important that they refrain from pursuing, for

personal benefit, opportunities discovered through position or company resources (Stanwick &

Stanwick, 2009).

The property principal is the belief that every employee should respect the property as well as

the rights of the owners of the property. Some common examples of this include theft,

misappropriation of funds, and wasting valuable resources. Over the years, this principal has

been expanded to include intangible property and now also includes the misappropriation of

intellectual property or other types of information. It is expected that the employee protect the

tangible and intangible assets of the firm. It is expected that the employee should be a good

steward to the resource he or she has access to (Stanwick & Stanwick, 2009).

The reliability principle is based upon the belief that it is the employee's responsibility to

honor the commitments which he or she has made to the firm. It is therefore expected that the

employees will follow through with the promises and commitments that have been made

between the employees and the firm (Stanwick & Stanwick, 2009). Some common violations of

the reliability principle include; breaching a promise or a contract or not fulfilling a promised

action. It is expected that the employee will do his or her best to make good faith effort to fulfill

the commitments that the employee has promised.

The transparency principle is based on the belief that every employee should conduct business

in a truthful and open manner. It is expected that all employees will not make decisions based on

their personal agenda (Stanwick & Stanwick, 2009). Therefore, the employees will not act in a

deceptive manner and to keep accurate and current records of all of the business obligations that

are currently the responsibility of the employee. Transparent actions include accurate and up to

date record keeping of the information related to the actions and the decision making process. In

addition, transparency guides the employees in ensuring that the relationship between the

company and its suppliers are handled in an honest manner. Transparency will also ensure that

the firms marketing focus will not be mislead or misinform its current potential customers. The

benefits of following the transparency principle include the ability to make better informed

decisions, the ability to ensure that the truth is always presented to others in the organization, and

allow for improved cooperation within the firm through the development of trust among the

employees (Stanwick & Stanwick, 2009).

The dignity principle is based on the belief that each employee needs to respect the dignity of

all individuals. Protecting the dignity of people in society includes ensuring the human rights of

health, safety, and privacy (Stanwick & Stanwick, 2009). In addition, the dignity principle

encourages the enhancement of human development no only within the company and the

marketplace, but also within society. Therefore, any type of humiliation, coercion or other type

of human offences is in direct violation of the dignity principle. The principle also involves

making affirmative efforts for those individuals who need help in their personal pursuits, and it

also helps protect those individuals who are vulnerable to unethical actions. The dignity

principle highlights the sensitivity the employees should have as they interact with people from

other cultures or countries (Stanwick & Stanwick, 2009).

References

Stanwick, P.A., & Stanwick, S.D. (2009). Understanding business ethics. Upper Saddle River, NJ: Pearson-Prentice Hall.

Strickland, W. (2011, February 06). Company ethics and conduct. Retrieved from http://www.angelfire.com/tx3/wstrickland/BIC/BIC_Editorial_Feb_06.pdf

Question 3

List and discuss in depth the three teleological frameworks and the three deontological frameworks. What are the advantages and disadvantages of each? Of these six frameworks, which one do you most associate?

Teleological Frameworks

Teleological frameworks focus on the results of the conduct of the individual. Derived from

the Greek word for fulfillment, telos, these frameworks focus on the ramifications, positive and

negative, resulting from the actions and conduct of individuals. The three teleological

frameworks are ethical egoism, utilitarianism, and Sedgwick’s dualism (Stanwick & Stanwick,

2009).

Ethical Egoism

Although Thomas Hobbes has been credited with the development of ethical ego-ism, it can

be said that Plato may have actually been the father of the ideas that have evolved into it.

Contemporary writers such as Ayn Rand have adopted the concept of focusing on each

individual’s self- interest (Stanwick & Stanwick, 2009). Ethical egoism is based on the belief

that every individual should act in a way to promote him or herself if the net result will generate,

on balance, positive rather than negative results. Derived from the Latin word ego, which is

defined as one's self, ethical egoism allows for self- interests to play a role in the actions of the

individual as long as there are also positive benefits for others. Many individuals who abide by

the philosophy of ethical egoism may have different interpretations of what would be considered

on balance an action that is good for others as well as themselves (Stanwick & Stanwick, 2009).

Some ethical egoists may argue that based on their own perceptions, all of their actions on

balance generate more positive than negative benefits. This level of rationalization may evolve

into the justification that pursuing a person’s self- interest is necessary to generate a positive

outcome for others. The supporters of ethical egoism argue that this framework is the only

ethical model that captures the essence of motivation within individuals. Without self-interest,

ethical egoists would argue, why would someone do any action? As a result, ethical egoists will

argue that their philosophy supports a win- win proposition (Stanwick & Stanwick, 2009). An

individual will reward his or her self- interest while also yielding benefits for the rest of society.

Those who argue against ethical egoism state that part of the connection of the actions that

motivate an individual also require certain obligations of an individual. In addition, human

motivation is primarily based on purely selfish factors, meaning that there should also be no

selfish factors that motivate individuals and make them unique human beings.

Utilitarianism

The utilitarianism movement started in England in the eighteenth century. Originally

developed by Jeremy Bentham in his Introduction to the Principles of Morals and Legislation in

1789 and John Stuart Mills Utilitarianism in 1863, utilitarianism holds the belief that any action

of an individual will be based on providing the greatest good for the greatest number of people

derived from the word utility (Stanwick & Stanwick, 2009). Utilitarianism is based on the

principle of utility where each person’s actions add to the overall utility of the community

impacted by those actions (Stanwick & Stanwick, 2009). As a result, utilitarian’s will focus on

the net result of their actions instead of the means or motives that generated the reason for their

actions. Utilitarianism can be based on single acts of individuals or on guiding behavior

indirectly through an evaluation of ethical conduct via rules procedures. Those who support

utilitarianism state that this theory is the only one that captures the essence of benevolent

behavior. Without utilitarianism as a framework, supporters would argue that people would not

do actions that help others if the action doesn’t benefit the self- interests of the individuals

(Stanwick & Stanwick, 2009).

Sedgwick’s Dualism

In 1874, the Methods of Ethics by Henry Sidgwick was first published and attempted to

bridge the gap between the two competing ethical frameworks of ethical egoism and

utilitarianism (Stanwick & Stanwick, 2009). Sidgwick argued that a common ground could be

found between the two theories. At the core of the argument is that both previous theories had

elements of using cost- benefit analysis to help analyze the actions of individuals. Sedgwick’s

dualism attempted to resolve the fundamental difference of whether the actions for one’s self-

benefit impact just the individual or others (Stanwick & Stanwick, 2009). Sidgwick argued that

utilitarianism is a foundation component of any ethical frame-work, which he called rational

benevolence. Although, he also argued that the self- interest of ethical egoism must be included

in the ethical framework he called prudence. He argued that rational benevolence is necessary in

an individual’s actions, but he also stated that prudence is necessary because the happiness of the

individual is the common goal of the action and it would not be logical for an individual to

sacrifice his or her own happiness to help others. Therefore, he argued that a harmony can exist

among rational benevolence and prudence viewpoints to have a rational ethical model. He

concluded by stating that there had to be some reconciliation between the two theories to explain

how individuals act in their own self- interest as well as in those interests of others (Stanwick &

Stanwick, 2009).

As a result, these frameworks can be used to present different arguments from a business

perspective. Those supporters of the ethical egoism theory would argue that businesses should

focus solely on their own self- interests and maximize their level of profitability by developing a

strong competitive advantage (Stanwick & Stanwick, 2009). Those who support the

utilitarianism theory would accept government intervention as a way to protect the interests of

the majority against the decisions of the minority within any given business. In his book, An

Inquiry into the Nature and Causes of the Wealth of Nations, Adam Smith presented an argument

that could support Sedgwick’s dualism. Smith argues that the greatest good for the greatest

number is achieved by individuals pursuing their self-interests in the marketplace (Stanwick &

Stanwick, 2009).

DEONTOLOGICAL FRAMEWORKS

As opposed to teleological frameworks, which focus on whether the results are favorable or

not, deontological frameworks focus on the duty or obligation in determining whether the actions

are right or wrong (Stanwick & Stanwick, 2009). Deontological is derived from the Greek word

"deon", which means duty. There are three deontological frameworks: existentialism,

contractarianism, and Kant’s ethics.

Existentialism

Existentialism is based on the underlying belief that the only person who can determine right

and wrong is the person making the decisions. As a result, each individual determines his or her

own actions and is ultimately responsible for the consequences of those actions. Philosophers

such as Sren Kierkegaard, Friedrich Nietzsche, and Jean- Paul Sartre have all embraced

existentialism as the most viable way to connect duty with actions (Stanwick & Stanwick, 2009).

It is through authenticity of their actions that individuals are able to develop their own sense of

personal virtue. As a result, existentialism would not utilize universal principles because each

individual determines that acceptance of his or her own actions.

Contractarianism

For centuries, philosophers have tried to explain why people form governments to establish

and maintain social order and why they surrender some natural liberties for the sake of a well

ordered society. The social contract theory is one prominent explanation that philosophers like

Thomas Hobbes, John Locke, and Jean-Jacques Rousseau have used since the 17th century. It

states that individuals (and businesses) willingly trade some of their freedoms in exchange for a

government or society that can protect their individual and collective interests (Stanwick &

Stanwick, 2009). Today in business, social contract theory implies a social contract between

business and society. Corporations are allowed to do business because of the belief that

corporations benefit society, and companies have certain ethical obligations to promote the

interests of society. In general, the bargain between business and society holds that economic

activity adds value to society and, therefore, that business is good, but business also has a

responsibility not to take advantage of societies support (Stanwick & Stanwick, 2009).

Kant’s Ethics

In Kant's book named Foundations of the Metaphysics of Morals (1785), Immanuel Kant

discussed ethical decisions based on the free will of the individual. Kant argued that the free will

to make decisions that were considered rational needed to be converted into a universal will

(Stanwick & Stanwick, 2009). Kant’s ethical view is considered a dualism because it attempted

to bridge the gap between the existentialist and contractarian points of view. The linkage Kant

made was to consider his principle pertaining to free will based on the philosophy that an

individual should act in a way in which one would expect everyone to act if it were a universal

will and to treat other individuals as the end, not the means to an end (Stanwick & Stanwick,

2009). As a result, Kant eventually rejected the view of using heuristics or gut feelings as a

justification for a decision because these findings are not always predictable nor are they accept-

able. In addition, the rationale for not committing an illegal act such as dumping dangerous

chemicals into a water source should not be based on the legal requirements or the potential

negative image that would be created for the company. Kant would argue that "the manager

should consider only whether his free will action to dump the toxic waste would be acceptable as

a universal will in which any company or individual could dump any chemical they want into

any water supply" (Stanwick & Stanwick, 2009, p.7). Kant argued that this should be the only

way in which managers should consider their decisions.

References

Stanwick, P.A., & Stanwick, S.D. (2009). Understanding business ethics. Upper Saddle River, NJ: Pearson-Prentice Hall.

Question 4

Review table 2-1 in the textbook, which relates to the myths about business ethics (page 23). Select three myths, and discuss why they represent a general misunderstanding about business ethics.

When it comes to business ethics in the workplace, I feel it is about prioritizing moral values

for the workplace and ensuring behaviors which are aligned with those values and its values

towards management. The textbook has identified 10 myths about Business ethics. I feel that

some of these myths arise from general confusion about the notion of ethics. Other myths arise

from narrow or simplistic views of ethical dilemmas. I have chosen 3 myths and will discuss my

opinion regarding the general misunderstanding about business ethics.

The first myth about business ethics I have chosen is "business ethics is based solely on the

belief that you will always do the right thing". Many people react that codes of ethics, or lists of

ethical values to which the organization aspires, are rather unnecessary because they represent

values to which everyone should naturally aspire. However, the value of a code of ethics to an

organization is its priority and focus regarding certain ethical values in that workplace. For

example, it’s obvious that all people should be honest. However, if an organization is struggling

around continuing occasions of deceit in the workplace, a priority on honesty is very timely and

therefore honesty should be listed in that organization’s code of ethics (Madsen and Shafritz,

1990).

The second business myth chosen is "Business ethics is theoretical and abstract philosophical

concept". I believe that the lack of involvement of leaders and managers in business ethics

literature and discussions has led many to believe that business ethics is a fad or movement,

having little to do with the day-to-day realities of running an organization. They believe

business ethics is primarily a complex philosophical debate or a religion. However, business

ethics is a management discipline with a programmatic approach that includes several practical

tools (Madsen and Shafritz, 1990). Ethics management programs have practical applications in

other areas of management areas, as well.

The third myth regarding business ethics is "Business ethics equals corporate social

responsibility". The social responsibility movement is one aspect of the overall discipline of

business ethics. According to Madsen and Shafritz authors of the book Essentials of Business

ethics, they refine the definition of business ethics to be: 1) an application of ethics to the

corporate community, 2) a way to determine responsibility in business dealings, 3) the

identification of important business and social issues, and 4) a critique of business (Madsen and

Shafritz, 1990). Items 3 and 4 are often matters of social responsibility. Writings about social

responsibility often do not address practical matters of managing ethics in the workplace, e.g.,

developing codes, updating policies and procedures, approaches to resolving ethical dilemmas,

etc.

References

Madsen, P. and Shafritz, J. M., (Eds.), (1990). "Essentials of Business Ethics". New York: Penguin Books.

Question 5

Examine the three simple tests identified by the institute of Business Ethics (page 25). Use these tests, and discuss a decision you made dealing with ethics

According to the Institute of Business Ethics, they have identified three simple ethical tests to

use for business decisions. They include transparency, effect, and fairness (Stanwick &

Stanwick, 2009). I will use each of the three tests identified and discuss a recent decision I have

made in my workplace using ethics.

Transparency, this can be summarized by asking the question " Do I mind others knowing what

I have decided". I was in a situation recently where one of my main suppliers willingly offered

me a very generous offer, to see a hockey game out of town. The trip would be all expense paid,

including the flight, overnight stay in the Hilton and all meals paid for. The seats at the game

were in a V.I.P box in the arena which my supplier rents for the year. This offer was very

tempting, but according to our company's ethics handbook, it states that I am only allowed to

accept gifts of nominal value. According to my employer, nominal value is estimated to be a

maximum of $50. So, back to the ethical test of transparency, if I was to accept such a generous

gift, I would obviously be uncomfortable with anyone knowing that I have accepted the gift. So,

I thankful declined the offer. It is possible that if I had accepted the offer, I would be disciplined

or even terminated. This was not worth the risk in my opinion.

Effect, may be summed up as asking the question, who does the decision affect or hurt? The

effect of me accepting the offer of my supplier can affect me and hurt the reputation of my

employer. Ethically, it would be as though I am accepting some sort of bribe, to ensure that this

supplier continues to conduct business with myself and my employer.

Fairness, would this decision be considered as fair by those affected. In the situation of the

hockey game, this would not be fair to those affected. This supplier, who made me the offer, is

also a big competitor of other suppliers which I deal with. The other suppliers are not as large,

so therefore, they could not compete with a generous offer as the one given me. To be fair, if I

was to accept the offer, it is possible that it may sway my judgment, and I give special treatment

to this supplier offering me the all expense paid trip.

References

Stanwick, P.A., & Stanwick, S.D. (2009). Understanding business ethics. Upper Saddle River, NJ: Pearson-Prentice Hall. The in-text citation should be (Stanwick & Stanwick, 2009).