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The set of moral principles or values that defines right and wrong for a person or group.
Behavior that conforms to a society's accepted principles of right and wrong.
Sources of code of Ethics
- Societal Ethics
- Occupational Ethics
- Organizational Ethics
- Individual Ethics
- Ethics vary from country to country, from group to group, from time to time.
Unethical behavior that violates organizational norms about right and wrong.
- Production Deviance: Hurts the quality and quantity of work produced.
- Property Deviance: Aimed at the organizations's property or products.
- Political Deviance: Using one's influence to harm others in the company.
- Personal aggression: Hostile or aggressive behavior toward others.
U.S. Sentencing Commission Guidelines since 1991, amended in 2004
- Who: Nearly all businesses are covered
- What: Punishes a number of offenses
- Why: Encourages businesses to be proactive
- How: Determine the punishment
- Companies can be prosecuted and punished even if management didn't know about the unethical behavior.
- i.e. invasions of privacy, price fixing, fraud, customs violations, antitrust violations, civil rights violations, theft, money laundering, conflicts of interest, embezzlement, dealing in stolen goods, copyright, extortion.
- All alternatives are undesirable or unethical
- Potential ethical consequences are unclear
- The quandary people are in when deciding which way they should act
Three Domains of Human Action
- Free choice vs. Law
- Free choice vs. Ethics
- Law vs. Ethics
7 Ethical Principles of Decision Making
- Long-term self-interest: Holds that you should never take any action that is not in your or your organization's long-term self-interest.
- Personal virtue: Holds that you should never do anything that is not honest, open, and truthful and that you would not be glad to see reported in the newspapers or on TV.
- Religious Injunctions: Holds that you should never take any action that is not kind and that does not build a sense of community.
- Government Requirements: Holds that you should never take any action that violates the law, for the law represents the minimal moral standard.
- Utilitarian Benefits: Holds that you should never take any action that does not result in greater good for society.
- Individual Rights: Holds that you should never take any action that infringes on others' agreed-upon rights.
- Distributive Justice: Holds that you should never take any action that harms the least fortunate among us: the poor, uneducated, unemployed.
Selecting and Hiring ethical employees
Overt integrity testsasking: Estimates one's honesty directly
Personality-Bases integrity testspsychological: Test one's honesty indirectly.
- Develops employee awareness of ethics
- Achieves credibility with employees
- Teaches a practical model of ethical decision making
Rationalizations for unethical behavior
- "It is not really illegal."
- "It is really in everyone's best interests."
- "No one will ever know about it."
- "The organization will stand behind me."
- Establishing an Ethical Climate
- 1. Act ethically
- 2. Are active in company ethics programs
- 3. Report potential ethics violations
- 4. Punish those who violate the code of ethics.
Reporting others' ethics violations to management or legal authorities.
A business's obligation to pursue policies, make decisions, and take actions that benefit society.
View of social responsibility that holds that an organization's overriding goal should be to maximize profit for the benefit of shareholders.
- Theory of corporate responsibility that holds that management's most important responsibility, long-term survival, is achieved by satisfying the interests of multiple corporate stakeholders.
Person or groups with a "stake" or legitimate interest in a company's actions.
- Any group on which an organization relies for its long-term survival.
- Local Communities
- Any group that can influence or be influenced by a company and can affect public perceptions about its socially responsibility behavior.
- Special interest groups
- Trade associations
- Discretionary: Serve a social role
- Ethical: Abide by principles of right and wrong
- Legal: Obey laws and regulations
- Economic: Be profitable
- Refers to a company's strategy for responding to stakeholders' economic, legal, ethical, or discretionary expectations concerning social responsibility.
- Reactive, defensive, accommodative, proactive strategies.
A social responsiveness strategy in which a company does less than society expects.
A social responsiveness strategy in which a company admits responsibility for a problem but does the least required to meet societal expectations.
A social responsiveness strategy in which a company accepts responsibility for a problem and does all that society expects to solve that problem.
A social responsiveness strategy in which a company anticipates responsibility for a problem before it occurs and does more than society expects to address the problem.
Social Responsibility and Economic Performance
- Realities of Social Responsibility:
- Can cost a company
- Sometimes it does pay
- Does not guarantee profitability