CHAPTER 2
BUSINESS
ETHICS
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ETHICS
THE STUDY OF HOW
PEOPLE OUGHT TO ACT
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NOT HOW
THEY ACT
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HOW ETHICAL ARE
YOU?
• Quiz time
• Quiz rules:
• Do not put your name on this
quiz
• Do not put your name on this
quiz
• Do not put your name on this
quiz
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CALLED IN SICK WHEN
NOT ILL?
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TAKEN OFFICE SUPPLIES
FROM AN EMPLOYER
FOR PERSONAL USE?
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TAKEN ANYTHING
VALUABLE FROM AN
EMPLOYER FOR
PERSONAL USE?
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MISSTATED FACTS ON A
RESUME/JOB
APPLICATION?
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SHIFTED BLAME TO A
CO-WORKER FOR
SOMETHING YOU DID?
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BEEN UNDERCHARGED
OR RECEIVED TOO
MUCH CHANGE FROM A
CASHIER AND NOT
TOLD THEM?
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DOWNLOADED MUSIC
FROM AN INTERNET
SITE WITHOUT PAYING
FOR IT?
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“CHEATED” ON YOUR TAX
RETURN (NOT
DECLARED INCOME OR
OVER-REPORTED
DEDUCTIONS?
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SWITCHED PRICE TAGS
TO GET A LOWER PRICE
ON SOMETHING YOU
WANTED TO BUY?
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LIED TO FRIENDS OR
FAMILY MEMBERS
ABOUT THEIR
APPEARANCES TO
AVOID HURTING THEIR
FEELINGS?
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KNOWING YOU HAD
LITTLE CHANCE OF
GETTING CAUGHT,
DRIVEN MORE THAN 20
MPH OVER THE SPEED
LIMIT OR RAN A RED
LIGHT?
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LIED TO YOUR SPOUSE,
PARTNER, SIGNIFICANT
OTHER, AND/OR
PARENT, ABOUT THE
COST OF A RECENT
PURCHASE?
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LIED TO YOUR SPOUSE,
PARTNER, SIGNIFICANT
OTHER, ABOUT YOUR
RELATIONSHIP WITH
ANOTHER PERSON?
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1. 63% 2. 63%
4. 18% 5. 13%
7. 37% 8. 17%
10. 71% 11.
12. 32% 13.
3. 16%
6. 50%
9. 12%
71%
28%
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WHY STUDY
ETHICS
?
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WORLDCOM
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HEALTHSOUTH
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ImClone
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WORLDCOM
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HEALTHSOUTH
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ImClone
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KEY POINTS




Exploration of real-life business ethics
issues
Teleological and deontological approaches
to ethical issues
Corporate ethics codes
Lots of rules and thoughts
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LAW AND ETHICS
MAY NOT ALWAYS
AGREE!
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SOMETIMES IT IS ETHICAL
TO COMMIT AN ILLEGAL
ACT AND SOME LEGAL
ACTS ARE UNETHICAL
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ETHICAL DILEMMAS
Career and Family:
Are career and
family goals ethically
compatible?
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Ethical Structures

Religion:

Libertarianism:

Virtue Ethics:
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TELEOLOGICAL
ETHICAL SYSTEMS
SOMETIMES CALLED
CONSEQUENTIAL
SYSTEMS
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DEONTOLOGICAL
ETHICAL SYSTEMS
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AMERICA’S MORAL CLIMATE
1.Teens
2. College students
3. Business practices
4. Schools
5. Politics
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TESTING HONESTY AROUND
THE WORLD
Reader’s Digest intentionally “lost”
more then 1,100 wallets in 117 cities
to see how many would be returned.
The wallets contained up to $50
along with a name and phone
number.
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MANAGERIAL ETHICS: PART I
In a recent study of 600
workers, “Teams that viewed
their supervisor as ethical
showed a positive correlation
with the following outcomes:
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MANAGERIAL ETHICS: PART II
Managers are the ethics teachers
of their organizations
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Corporate Ethics Codes
 Address
such topics as:
 relations
with government,
 matters of personal character,
 product safety,
 environmental issues,
 customer/supplier relations,
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CORPORATE ETHICS CODES
(CONT’D)
political contributions,
 employees’ working conditions,
 bribery,
 workplace safety,
 collective bargaining,
 freedom of expression and
 fair trade.

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FIGHTING BUSINESS CRIME
 The
2002 Sarbanes-Oxley Act
 Federal
sentencing guidelines
 Whistleblower
protection
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ETHICAL CHECK LIST:
WHAT ARE THE FACTS?
WHAT ARE THE CRITICAL ISSUES?
WHO ARE THE STAKEHOLDERS?
WHAT ARE THE ALTERNATIVES?
IS IT LEGAL?
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HOW WOULD IT LOOK IN THE LIGHT
OF THE DAY?
WHAT ARE THE CONSEQUENCES?
DOES IT VIOLATE IMPORTANT
VALUES?
DOES IT VIOLATE THE GOLDEN RULE?
IS IT JUST?
HAS THE PROCESS BEEN FAIR?
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ETHICAL RESPONSIBILITIES
TO OTHERS
 TO CUSTOMERS
 TO EMPLOYEES
 TO STAKEHOLDERS
 TO THE COMPANY
 TO SOCIETY
 TO YOURSELF

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AND REMEMBER
EXECUTIVES WHO BEHAVE
ETHICALLY HAVE HAPPIER, MORE
FULFILLED LIVES
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AND
UNETHICAL BEHAVIOR CAN
DESTROY A COMPANY
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CHESTER’S
RULES
FOR
ETHICAL
BEHAVIOR
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WHEN IN DOUBT,
DON’T
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IF IT SMELLS BAD, IT
PROBABLY IS
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IF IT SOUNDS TO
GOOD TO BE TRUE,
IT PROBABLY IS
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NEVER DO ANYTHING YOU
WOULD BE EMBARRASSED TO
TELL YOUR MOTHER ABOUT
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