Module 5 - Ethics and Corporate
Responsibility
Chapter 3
Learning Objectives
LO1 Describe how different ethical perspectives guide decision
making
LO2 Explain how companies influence their ethics environment
LO3 Outline a process for making ethical decisions
LO4 Summarize the important issues surrounding corporate
social responsibility
LO5 Discuss reasons for businesses’ growing interest in the
natural environment
LO6 Identify actions managers can take to manage with the
environment in mind
3-2
What is “ethics?”
Ethics
• Ethics
– The system of rules that governs the ordering of values
3-4
CEO Quotes
• "Ethics has to do with what my feelings tell me is
right or wrong.”
• "Ethics has to do with my religious beliefs.”
• "Being ethical is doing what the law requires.”
• "Ethics consists of the standards of behavior our
society accepts.”
• "I don't know what the word means."
CEO Quotes
• "Ethics has to do with what my feelings tell me
is right or wrong.”
CEO Quotes
• "Ethics has to do with what my feelings tell me
is right or wrong.”
• "Ethics has to do with my religious beliefs.”
CEO Quotes
• "Ethics has to do with what my feelings tell me
is right or wrong.“
• "Ethics has to do with my religious beliefs.“
• "Being ethical is doing what the law requires.“
CEO Quotes
• "Ethics has to do with what my feelings tell me is
right or wrong.”
• "Ethics has to do with my religious beliefs.”
• "Being ethical is doing what the law requires.”
• "Ethics consists of the standards of behavior our
society accepts.”
CEO Quotes
• "Ethics has to do with what my feelings tell me is
right or wrong.”
• "Ethics has to do with my religious beliefs.”
• "Being ethical is doing what the law requires.”
• "Ethics consists of the standards of behavior our
society accepts.”
• “Ethical behavior is following the code of your
industry/profession.”
Perhaps Shakespeare was correct….
• divorcedeli.com
• Merry Christmas and Happy New Year
Still further down…..
$50 Billion Ponzi
Scheme
It’s a Personal Issue
• “I am ethical! You, on the other hand…..”
• Have you ever………….
– taken pens, staples, printer paper from work and used
it at home?
– listened to a coworker tell a joke that insults [fill in the
blank!] and said nothing?
– not told the complete truth about a mistake made at
work?
– shopped online while at work?
– checked your Facebook page?
– Checked the ball scores from last night?
3-22
…and if you have, then you are……
Cost of time
• 100 employees @$15 an hour
• Wastes 30 minutes a day - $7.50
• 250 work days X 100 X $7.50 =
$187,500 annually!!
Bottom line
• 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.
• Refer you to the great quote by Thoreau in your
text:
3-25
It is truly enough said that a corporation
has no conscience; but a corporation of
conscientious men is a corporation with a
conscience
How do you react?
• Moral philosophy
– Principles, rules, and values people use in deciding
what is right or wrong
3-27
Ethical Systems
• Universalism
– The ethical system stating that all people should
uphold certain values that society needs to
function
– Caux Principles for Business
• Human dignity
• Kyosei
3-28
Ethical Systems
• Egoism
– Ayn Rand
• Utilitarianism
3-30
MARTIN NIEMÖLLER: "FIRST THEY
CAME FOR THE SOCIALISTS..."
• First they came for the Socialists, and I did not
speak out -Because I was not a Socialist.
• Then they came for the Trade Unionists, and I did
not speak out -Because I was not a Trade Unionist.
• Then they came for the Jews, and I did not speak
out -Because I was not a Jew.
• Then they came for me -- and there was no one
left to speak for me.
Ethical Systems
• Egoism
– Ayn Rand
• Utilitarianism
• Relativism
– It all depends
• Virtue ethics
3-32
Kohlberg’s Model of Cognitive Moral
Development
3-33
Fun Exercise
• Heinz’s wife is dying. The druggist in town has
discovered the cure. It cost him $200 to make but
offers it to Heinz for $2,000. Heinz asks everyone
he knows for money but can only come up with
$1,000. He promises to pay the rest later. The
druggist says no: he wants to make money from
his discovery. That night Heinz breaks into the
shop and takes the medicine.
• Was Heinz right? Why or why not?
• where are you????
Business Ethics
• Ethical climate
3-35
Ethics Programs
• Codes of ethics
– J&J in text
• Compliance-based ethics programs
• Integrity-based ethics programs
• Ethical leaders
3-36
1.
2.
3.
4.
5.
6.
7.
Don’t allow personal gains to outweigh the good of the organization
Recognize all perspectives when making an ethical decision
Respect people and their rights
Keep promises and honor contracts
Use feelings to help decide morale dilemmas
Get all the facts
Treat all people fairly
8. Know who you are and what your personal values
9. Know what your company is and its cultural values
10. Always challenge your decision to be in line with your values, beliefs and morals
11. Never compromise your integrity
12. Make sure unjust decisions can be appealed
13. Don’t choose the easiest answer (don’t just go for a quick fix)
14. Consider the risk of setting & trying to achieve overly ambitious goals
15. Communicate that all employees have a responsibility to keep the company’s moral
& ethical standards in check
16. When in doubt, don’t
17. When possible seek the input of effected individuals at a moral crossroads
The Business Costs of Ethical Failure
3-39
Corporate Social Responsibility
• Obligation toward society assumed by business.
3-40
Do businesses really have a
social responsibility?
• First view
– holds that managers act as agents for
shareholders and, as such, are obligated to
maximize the present value of the firm
– “The Social Responsibility of Business is to
Increase its Profits”
3-41
Do businesses really have a
social responsibility?
• Second view
– managers should be motivated by principled
moral reasoning
3-42
You can do good and do well
• Profit maximization and CSR = oil and
water?????
• Key is the “reputation”
3-43