Jan. 29, 2008, CNN.com
Conducting Business
Ethically and Responsibly
Actuary Analysis, from the movie Class Action
(1:40 min.)
Prof. Bauer-Ramazani
Ethical Dilemma -- definition

A predicament in which a (business) person
must resolve whether an action may be
considered unethical even if it benefits
the organization, the individual, or
both.

An ethical dilemma may arise when two
norms or values are in conflict
 Identify the 2 norms or values.
 Tradeoffs (pros & cons)
What Is Ethical Behavior?
Ethics
Right or wrong, good or bad,
in actions that affect others
Ethical
Behavior
Conforming to individual
beliefs AND social norms
about what’s right and good
Business
ethics
Ethical or unethical behavior
by employees of
organizations
Formalizing the Commitment to
Ethics
Adopting Written Codes
Instituting Ethics Programs
Code of Ethics


formal statement = a guide for how people
within a particular organization should act and
make decisions in an ethical fashion.
‘s Code of Business Conduct
(in 15 languages):
– Our Code of Business Conduct serves to guide the
actions of our employees, officers and directors in ways
that are consistent with our core values: honesty;
integrity; diversity; quality; respect; responsibility; and,
accountability. The Code helps our people play by the
rules wherever we operate around the world.
(http://www.thecocacolacompany.com/ourcompany/business_conduct.html)
Ethical Decision Model by the
Josephson Institute of Ethics
1.
2.
All decisions must take into account and
reflect a concern for the interests and
well-being of ALL stakeholders.
Core ethical values and principles
ALWAYS take precedence over nonethical ones, e.g. self-interest.
Major
Corporate
Stakeholders
Groups, individuals,
and organizations that
are directly affected by
the practices of an
organization
Businesses have a
social responsibility
toward them.
6 Pillars of Character
(Ethical Norms)
Steps in
Making
Ethical
Decisions
Responsibility Toward Customers
Consumer Rights
Fair Pricing
Ethics in Advertising
Responsibility Toward
Employees
Legal and Social Commitments
Safe work environment
 Equal pay

Ethical Commitments
 Whistle-blowers
David Batstone on
whistleblowing:
Unethical
behavior at
work? (2:46 min)
Responsibility Toward Investors
1.
NO improper financial
management
2.
NO insider trading
3.
NO misrepresentation
of finances on financial
statements
Responsibility Toward Local
Communities
 Environment
Air pollution
Water pollution
Land pollution
 Clean
up toxic waste
 Use recycling

Growth / infrastructure
 Social well-being of all members of
the community
Company Practices and Business
Ethics
Best Approach: Open, Honest, Responsive!
The Tylenol Scare Case
Lawsuits as a result of
pharmaceutical company
Merck’s announcement
about the potential side
effects of its drug Vioxx and
subsequent withdrawal
7 possible Guidelines for Making Ethical
Decisions in the Work Place
(Please refer to your handout.)
1.
2.
3.
4.
5.
6.
7.
The Golden Rule
The Utilitarian Principle
Kant’s Categorical Imperative
The Professional Ethic
The TV Test
The Legal Test
The Four-Way Test
Business
Ethics:
My Life in
Headlines
(1 min.)
Social Audits
Many companies attempt to regulate
themselves on the topic of social
responsibility and ethics. They do this
through social audits.
 A social audit is a form of self-regulation in
which the company attempts to monitor
managers’ and employees’ ethical behavior.

Managing Social
Responsibility & Ethics Programs
Key steps:

Social responsibility and ethics must start at the top.

A committee of top managers must develop a plan
detailing the level of top management support.

One executive must be put in charge of the firm’s agenda.

The organization must conduct periodic social audits
Evaluate progress in achieving social responsibility goals