Professional and Business Ethics
Prof. Peter Hadreas
Spring, 2014
Course Website:
http://www.sjsu.edu/people/peter.hadreas/courses/P
rofandBusEthics/
1
Three Basic Types of Ethical Theory
Teleological, or consequence-based.
(MBE, pp. 40-42)
Deontological, or duty-based.
(MBE, pp. 42-46)
Virtue ethical, or character-based.
(MBE, pp. 46-51)
2
But why seek virtues such as self-control, courage,
fairness, and wisdom?
The answer applies to the question
raised at the beginning of this section
on virtue ethics. Why would one want
to be a ‘good person’
Aristotle’s and as we’ll later see
Confucius’ answer is the same: The
Virtuous life is the happy and fulfilled life.
3
But why seek virtues such as self-control, courage,
fairness, and good-temper?
But why is virtuous life the happy and
fulfilled life. The answer to this question
depends on the second question raised at
the beginning of this section: Why should
virtue ethics be particularly relevant to
‘professional community?’
4
But why seek virtues such as self-control, courage,
fairness, and good-temper?
Within a community, where people know who you are
(and know your character), character virtues both serve
the community and at the same time keep you on a
course in which you are more likely to have a happy,
fulfilled life.
Why?
5
But why seek virtues such as self-control, courage,
fairness, and wisdom?
The virtue of Good-temper means you stand up for
yourself. It protects your own reputation and also allow
you to neither be so meek as to be overlooked by others,
nor offends others because of a rash temper.
The virtue of Courage protects people in the community
and at the same time wins their respect.
Loyalty (a virtue) supports cooperative community
projects. Since it’s neither obsequious or indifferent, it
is a ‘thoughtful’ loyalty, neither blind obedience nor a
sullen lack of interest in cooperation.
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But why seek virtues such as self-control, courage,
fairness, and wisdom?
The virtue of Self-control supports your accomplishing
your goals and at the same time reduces conflicts with
others in the community.
The virtue of Responsible Money-Management enables
you to care for your own financial welfare as well as
those who are dependent upon you.
The virtue of Self-respect allows you to fairly promote
yourself. Over time, you also gain the respect of your
community because you’re neither too humble nor
unduly ambitious, but present yourself fairly.
7
But why seek virtues such as self-control, courage,
fairness, and good-temper?
Answer: The life of virtue leads to the realization of
one’s personal goals, wins community respect and
benefits the community. So the virtuous life leads to the
happy or fulfilled life.
8
THE DISCLOSURE RULE.
Since the virtuous life serves both the individual and
communally, then it should make sense why the
textbook authors, Nelson and Treviño arrive at a
“disclosure rule” for testing of decision-making:
“A useful decision-making shortcut based on the
broader community as a guide is known as the
disclosure rule. This practical shortcut is widely used by
managers and executives. The disclosure rule asks,
‘How would you feel if your behavior appeared on
_______. You fill in the blank of a particular media outlet.
Is it the front page of the New York Times, the Wall Street
Journal, your home town newspaper, 60 Minutes, CNN?
Treviño and Nelson textbook, Chapter 2, p. 50.
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PLEASE NOTE
Selections from Confucius’ Analects are available at the
course website.
http://www.sjsu.edu/people/peter.hadreas/courses/ProfandB
usEthics/
These selections will be referred to in the lecture and
discussion of Confucian ethics.
10
Confucius
Kǒng fū zǐ, trans.: ‘Master Kong’
(traditionally 551 BC – 479 BC.)
11
12
13
14
Confucianism continued
Virtue #3 ‘jen,’ ‘humaneness’, fully realized is
in sympathy with Heaven and Earth
“Only those who are absolutely sincere can fully
develop their nature. If they can fully develop
their nature, they can then fully develop the
nature of others. If they can fully develop the
nature of others, they can then fully develop the
nature of things. If they can fully develop the
nature of things, they can then assist in the
transforming and nourishing process of Heaven
and Earth. If they can assist in the transforming
and nourishing process of Heaven and Earth,
they can thus form a trinity with Heaven and
Earth.”
Confucius, The Doctrine of the Mean, #22, in Chan, Wing-Tsit, A Source Book in Chinese
Philosophy, (Princeton, NJ: Princeton University Press, 1963), p. 107-8. 15
Virtue #3, ‘jen’ ‘compassion’ continued
The person who has ‘jen’ (humaneness)’ will be a
natural leader and will be willingly followed by
people without force or coercion.
See Analects
2:1, 2:3, 2:19, 12:19.
QUESTION
The Confucian tradition retains cultural power in the Far East,
not only in China but also in cultures influenced by China such
as Japan, Korea and South East Asia. Given the Confucian
heritage, how do you think business relations will stand in
relation to the ‘rule of law’ as compared with bonds of family
and social commitments?
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Confucianism
Becoming Virtuous: Strive to be like the Ideal Person
Confucius exhorts all people to strive for the ideal of
a "gentleman" or "perfect man” (jūnzǐ). ”The perfect
man" or “superior man” is one who "combines the
qualities of saint, scholar, and gentleman." (The
masculine gender is traditional and is still used.) The
opposite person is the “small person” or “inferior
man” (xiǎorén) who is petty, narrowly self-interested,
greedy, and superficial,
See Analects: 2:14, 4:11, 5:15, 12:19, 16:7, 16:10.
QUESTION
In the Analects 12:19 Confucius says, “The nature of the
Superior Man is like the wind, the nature of the inferior man is
like the grass. When the wind blows over the grass, it always
bends.” What does this metaphor suggest about the
individuality versus the universality of the Superior Man?
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Dwight Perkins on ‘Chinese Way of Doing
Business:’
“Where networks do not already exist, Chinese
businesses spend time and resources trying to
develop them, even across ethnic lines. A standard
statement about business practices in China is that
Americans and European businessmen show up
with their lawyers and try to write and negotiate
formal contracts that cover all contingencies.
Chinese businessmen, in contrast, are prepared to
spend years visiting, entertaining, and getting to
know the foreigners before they are prepared to get
down to carrying out actual transactions with or
without formal contracts.”
From Perkins, Dwight H., “Laws, Family Ties, and the East Asian Way of Business,”
in Culture Matters, Harrison, Lawrence E., and Huntington, Samuel P, (Eds.) (New
York: Basic Books, 2000), p. 238. Dwight Perkins directed the Harvard Institute for
International Development from 1980 to 1995.
18
“Guanxi”
Upper character: Behind the door, i. e. hidden.
Lower character: Man facing a complex, i. e. a relationship
19
Lucian W. Pye on ‘Asian Values: ‘Guanxi’
“In the case of Chinese culture, the bonds of family
extend outward to the clan and then onto more
general ties of guanxi, or personal connections
based on shared identities. What is most significant
about the Chinese practices of guanxi for economic
development is that parties are expected to share
mutual obligations even though they may not know
each other well. It is enough that they were
classmates or schoolmates, came from the same
town or even province, belonged to the same
military outfit, or otherwise had a common element
in their background.”
From Pye, Lucian W., “’Asian Values’: From Dynamos to Dominoes?” in Culture
Matters, Harrison, Lawrence E., and Huntington, Samuel P, (Eds.) (New York: Basic
Books, 2000), p. 251. Lucian Pye is former president of American Political Science
Association and edited or authored twenty-seven books.
20
A False Dichotomy
Ethical Relativism
versus
Ethical Imperialism
Discussed in Treviño and Nelson textbook, p. 415.
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Ethical Relativism
No culture has a better ethics than
any other.
(Discussed in textbook, p. 415ff.)
Inadequacy of Ethical Relativism
I.
Exaggerates differences between
societies.
II. Undermines moral criticism.
III. Denies moral progress.
IV. Implies that the majority is always right.
V. Typically falsified by actual behavior of
ethical relativist.
Why are Cultural Differences Important in thje
Following Scenario?
A large U. S. computer-products company in 1993
introduced a course on sexual harassment in
its Saudi Arabian facility. Instructors used the
same approach as they used with U. S.
managers: the participants were asked to
discuss a case in which a manager makes
sexually explicit remarks to a new female
employee over drinks in a bar.1
Why was this training session a dismal failure?
1. Adapted from Donaldson and Werhane, Ethical Issues in Business, 1999, p. 432.
Why are Cultural Differences Not Important in the
Nestlé’s Notorious Marketing Program
In the 1970s and 1980s, the Swiss conglomerate
Nestlé marketed infant formula to mothers in
Third World countries. Nestlé advertised that
bottle-fed babies were healthier. They used
women, dressed as nurses, who were actually
sales representatives receiving a commission
to sell the formula. The formula needed to be
mixed with water to be used. And it needed to
be bought repeatedly by the mothers to
continue bottle-feeding. The marketing
campaign produced a health disaster.1
1. Adapted from textbook, p. 422-3.
Why Not Culturally Relative?
In the early 1990s a group of investors wanted to
restore the SS United States, once a luxurious
ocean liner. The restoration required stripping
the ship of its asbestos lining. The bid from a
U. S. company, based on U. S. standards for
asbestos removal, was prices at more than
$100 million. A company in the Ukranian city of
Sevastopol offered to do the job for less than $2
million. In October, 1993, the ship was towed to
Sevastopol.
1. Adapted from Donaldson and Werhane, Ethical Issues in Business, 1999, p. 432.
Ethical Imperialism:
The view that there are absolute
ethical principles that demand
exactly the same behavior in every
society .
(Discussed in Treviño and Nelson textbook, p. 415.)
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Inadequacy of Ethical Imperialism
Cultures vary. Some ways in which cultures vary
include emphases on long-term versus short-term
goals, conceiving people individualistically as
opposed to conceiving people as parts of families
or clans, and the acceptance of the behavior of
powerful people simply because they are powerful
people.
These variations make it appear as if the ethics of
different business practices, for example, bribery,
nepotism, and employee loyalty, vary culture by
culture. There are seldom a difference in core
ethical values. The different culture practices create
the appearance of differences in core values.
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Geert Hofsteder on ‘Confucian Dynamism’
“In practical terms confucianism refers to a longterm versus a short-term orientation in life”1
1. Hofstede, Geert, Culture's Consequences: Comparing Values, Behaviors, Institutions and Organizations
Across Nations, 2nd Edition. 596 pages. Thousand Oaks CA: Sage Publications, 2001, hardcover, ISBN 08039-7323-3; 2003, paperback, ISBN 0-8039-7324-1, pp. 164-5.
Long-term versus short-term orientation
Long term orientation
-persistence -ordering
relationships by status and
observing this order -thrift having a sense of shame
Short term orientation
-personal steadiness and
stability -protecting your
reputation -respect for
tradition -reciprocation of
greetings, favors, and gifts
1. http://www.clearlycultural.com/geert-hofstede-cultural-dimensions/long-termorientation/ Hofstede (2001), Culture’s Consequences, 2nd ed., p 359. “Long-Term Orientation,
the fifth dimension of Hofstede was drawn from a value survey which was distributed across 23
countries.
Geert Hofstede’s Long-Term versus Short-Term Index:
China
118
Hong Kong
96
Taiwan
87
Japan
80
South Korea 75
Brazil
65
India
61
Thailand 56
Singapore
48
Netherlands
Sweden
Australia
Germany
New Zealand
United States
Ethiopia
Kenya
25
Tanzania 25
44
33
31
31
30
29
25
United Kingdom 25
Zambia25
Norway
20
Philippines
19
Ghana
16
Nigeria
16
Sierra Leone
16
Adapted from Website: Making Sense of Cross Cultural Communication, http://www.clearlycultural.com/geert-hofstedecultural-dimensions/long-term-orientation/
Japan scores a relatively high ‘80’ on the longterm versus short-term index. This would fit
with Japanese firms investing in their
employees’ training and development.
Typically, new employees will train on average
for six to twelve months in each of the firm’s
major offices or divisions so that within a few
years they know many facets of the company’s
operations.
Reid, Steven, “The Business of Culture: How Culture Affects Management Around the
World,” Oct. 4, 2010, http://www.hrmtoday.com/culture/corporate-culture/the-businessof-culture-how-culture-affects-management-around-the-world/ accessed March 9, 2011.
Individualism
“Individualism represents the extent to which
people in a society think of themselves as
autonomous individuals who are responsible
primarily to themselves and their immediate
families. . . . Americans, Canadians, Australians
and most Northern Europeans are
individualists. They define themselves in terms
of personal characteristics and achievement,
and they generally value personal welfare over
group harmony.”
(Treviño and Nelson textbook, p. 403.)
Geert Hofstede’s Individualism/Collectivism Index:
United States
91
Australia
90
United Kingdom 89
Netherlands
80
New Zealand 79
Italy
76
Belgium
75
Denmark
74
France
71
Sweden
71
Ireland
70
Norway
69
Switzerland 68
Germany
67
South Africa 65
Finland
63
Poland
60
Czech Republic 58
Austria
55
Hungary 55
Israel
54
Spain
51
India
48
Argentina
46
Japan
46
Iran
41
Jamaica
39
Brazil
38
Egypt
38
Iraq
38
Kuwait
38
Lebanon38
Libya
38
Saudi Arabia 38
United Arab
Emirates
38
Turkey
37
Uruguay
36
Greece
Philippines
Mexico
Ethiopia
Kenya
Portugal 27
Tanzania27
Zambia
Malaysia26
Hong Kong
Chile
China
35
32
30
27
27
27
25
23
20
Ghana
20
Nigeria
20
Sierra Leone 20
Singapore
20
Thailand
20
El Salvador
19
South Korea 18
Taiwan
17
Peru
16
Costa Rica 15
Indonesia
14
Pakistan 14
Colombia
13
Venezuela 12
Panama
11
Ecuador 8
Guatemala 6
An individualist – collectivist tragedy?
“A federal prison camp inmate spoke with Penn State students
about the reason for his imprisonment. The man, who was welleducated and well-spoken, had been a successful New York
executive. He and his wife had helped the wife’s nephew by
providing a place for him to stay when he was having
difficulties in his life, including drug use. But it turned out that
the nephew was using their telephone to sell drugs right out of
their home! The couple was accused of knowing about and
supporting drug dealing, and they were charged with
conspiracy. Both were convicted and sentenced to many years
in prison. Asian students in the audience were horrified that
this man was in prison for helping his nephew.”
(Treviño and Nelson textbook, p. 404.)
Collectivism
“Most Asian and Latin American countries
represent collectivist societies. They value
conformity to the group and define themselves
in terms of their group memberships and their
contributions to the success of those groups.”
(Treviño and Nelson textbook, p. 403.)
A Japanese businessman wants to tell his
Swedish client that he is uninterested in a
particular sale. So he says "That will be very
difficult." The Swede eagerly asks how he can
help. The Japanese is mystified. To him, saying
that something is difficult is a polite way of
saying ‘No way in hell!.’
What’s ‘individualistic’ or ‘collectivist’ about
the Swedish and the Japanese man’s
response?
Scenario downloaded from http://www.analytictech.com/mb021/cultural.htm
QUESTION
How might family loyalty become confused
with conflict of interest depending upon
whether a culture is individualistic or
collectivist?
Conflict of interest defined: “In an organization, a
conflict of interest arises when employees at any level
have special or private interests that are substantial
enough to interfere with their job duties; that is, when
their personal interests lead them, or might reasonably
be expected to lead them, to make decisions or act in
ways that are detrimental to their employer’s interests.”1
1. Shaw, William H., and Barry, Vincent, Moral Issues in Business, 10th
Edition (Belmont CA: Wadsworth, 2007), p. 389.
Power Distance
“Power distance is the extent to which less powerful
members of institutions and organizations within a country
expect and accept that power is distributed unequally.”1
In countries with high power distance employees are often
afraid to express their doubts and disagreements with their
autocratic and paternalistic bosses.
In countries with small power distance, bosses and
subordinates work closely together and consult each other.
Subordinates and superiors consider each other as or less
equal . Subordinates expect to be consulted within the
decision-making process.
1. http://www.via-web.de/power-distance/
Geert Hofstede:
Geert Hofstede’s Power Distance Index:
Malaysia 104
Guatemala
95
Panama 95
Philippines 94
Mexico 81
Venezuela
81
China
80
Egypt
80
Iraq
80
Kuwait 80
Lebanon 80
Libya
80
Saudi Arabia 80
United Emirates 80
Ecuador 78
Indonesia
78
Ghana 77
India
77
Nigeria 77
Sierra Leone
Singapore
Brazil
69
France 68
Hong Kong
Poland 68
Colombia
El Salvador
Turkey 66
Belgium 65
Ethiopia 64
Kenya
64
Peru 64
Tanzania 64
Thailand 64
Zambia 64
77
74
68
67
66
Chile
63
Portugal 63
Uruguay 61
Greece 60
South Korea 60
Iran 58
Taiwan 58
Czech Republic
57
Spain
57
Pakistan 55
Japan
54
Italy 50
Argentina
49
South Africa 49
Hungary 46
Jamaica 45
United States 40
Netherlands 38
Australia 36
Costa Rica
35
Germany
35
United Kingdom
Switzerland 34
Finland 33
Norway 31
Sweden 31
Ireland 28
New Zealand 22
Denmark 18
Israel
13
Austria 11
Adapted from Website: Making Sense of Cross Cultural Communication, http://www.clearlycultural.com/geert-hofstedecultural-dimensions/
35
QUESTIONS
1.How would whistle-blower behavior vary
according to power distance?
2. If an employee in a high power distance
culture wants help with work related problem,
how might the ‘chain of command’ in the
organization play into the request for help?
Citations for pictures in previous powerpoint:
1. Slide #11, picture of Confucius, en.wikipedia.org/wiki/File:Confucius_Tang_Dynasty.jpg
http://www.google.ca/search?q=picture+of+Monarch+Butterflies+in+Santa+Cruz&tbm
2. Slide #12, picture of Confucius, en.wikipedia.org/wiki/File:Confucius_Tang_Dynasty.jpg
3. Slide #13, picture of Confucucius, http://www.all-famousquotes.com/images/uploads/confucius1.jpg.
4. Slide #14, pictiure of Confucius, http://blogs.reuters.com/wpcontent/uploads/2006/09/confucius300.jpg.
5. Slide #15, picture of Confucius, http://1.bp.blogspot.com/_UCX9YZuA81Q/TQ1kFei9aI/AAAAAAAAACU/RzZUTE7fXQw/s1600/dragon%2B2.jpg
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