Integrity and Ethics
Integrity and Entrepreneurship
• What is integrity?
• What one believes to be right and proper
• Values such as honesty, reliability and
fairness
2
Integrity and Entrepreneurship
• Doing the right thing
• Ethical issues involve questions of right and
wrong,
• Self-interest versus the needs of others
• It may not pay to be ethical, at least in the
short run???
3
Difficult Ethical Issues Facing the
Entrepreneur /
Small Business Owner
•
•
•
•
Relationships with customers, clients, and competitors
(relationships with outside parties in the marketplace)
Human Resource decisions (relating to employment
and promotion)
Employee obligations to employer (responsibilities and
actions that in some way conflict with the best interests
of the employer)
Management processes and relationships (superiorsubordinate)
4
Difficult Ethical Issues Facing the
Entrepreneur /
Small Business Owner
•
•
•
Governmental obligations and relationships
(compliance with governmental
requirements and reporting to government
agencies)
Relationships with suppliers (practices and
deceptions that tend to defraud suppliers)
Environmental and social responsibilities
(business obligations to the environment
and society)
5
A Framework for Integrity in
Entrepreneurship
•
•
•
•
•
Promoting the Owners’ Interest
Respecting Customers
Valuing Employees
Social Responsibility
Government Laws and Regulations
7
The Challenges and Benefits of
Acting Ethically
The Vulnerability of Small Companies
•
•
•
•
Many small firms are vulnerable to temptation
because of marginality.
Bribery may be rationalized as an effort to
create a level playing field.
Responses to vignettes compare the ethics of
entrepreneurs and others.
Entrepreneurs were less moral on some issues
but more moral on others.
8
The Challenges and Benefits of
Acting Ethically
The Vulnerability of Small…continuation
• Ethical issues abound in the Internet
world.
• Using personal information—the privacy
issue
• Respecting intellectual property rights
• Is it okay to monitor employees’ email?
9
The Challenges and Benefits of
Acting Ethically
The Integrity Edge
• Integrity is crucial to small business
success.
• Firms perform better when they focus in
the needs of all stakeholders
• Greatest benefit of integrity is the trust it
generates.
10
The Challenges and Benefits of
Acting Ethically
International Issues of Integrity
•
Some countries face higher levels of
unethical behavior than others.
•
Determining what constitutes ethical
behavior is more difficult across different
cultures.
11
The Challenges and Benefits of
Acting Ethically
International Issues of Integrity . . .
continuation
•
Ethical relativism is troublesome.
•
*Ethical imperialism—impose US
standards on other societies
Building a Business with Integrity
1. A Strong Foundation
*The personal Integrity of the founder or owner is key to a firm’s ethical
performance
2. Leading with integrity in our actions
*The underlying values that govern the integrity of business practices
are often based on religious foundations or personal values.
3. A Supportive Organizational Culture
4. An Ethical Decision-Making Process
13
Class Activities
(Group analysis and discussions of
ethical dilemma situations)
1. Give an example of an unethical business practice that you have personally
encountered.
2. Based on your experience as an employee, customer, or observer of some
particular small business, how would you rate its ethical performance? On what
evidence or clues do you base your opinion?
3. What are some of the advantages of conducting business with integrity?
Some people say they have no responsibility beyond maximizing the value of
the firm in financial terms-can this position be defended? If so, how?
4. Develop a mission and values statements for an entrepreneurial venture
business that your group selects.
5. Develop a Code of Business Conduct for Western Instructors at King Saud
University
14