Unit 1 Assessment Business Ethics Question 1 Review the ethical cycle (Page 19).

Discuss a decision you have made (at home or the workplace), and describe the steps of the cycle in relation to your decision making. Now review the section of rationalizing unethical behavior (page 25). What is the relationship between the ethical cycle and the three simple ethical tests used for business decisions? On some occasions, solving ethical problems may become a complex process; we do need a systematic approach to solve them. The textbook identifies a systematic approach which may be utilized in order to understand the underlying dynamics of the ethical decision making; it is identified as the ethical cycle (Stanwick & Stanwick, 2009). The ethical cycle consists of five important steps, which include; moral problem statement, problem analysis, options for actions, ethical judgment, and reflection. I will discuss the various steps of the ethical cycle in more detail, and in addition, discuss a decision which I have made utilizing the ethical cycle steps.

The start of the ethical cycle is the formulation of a moral problem. A special case of a moral problem is the moral dilemma. In this case, there are two positive moral values/norms that cannot be fully realized at the same time. Instead, one action only realizes one moral value, while another action realizes the other moral value (Stanwick & Stanwick, 2009).

A good moral question/problem statement must meet three conditions. It must clearly state what the problem is, it must state for whom it is a problem, and it must be clear why/how it is a moral problem (Stanwick & Stanwick, 2009). However, it will often not be possible to fully formulate the moral problem precisely when the ethical cycle is started. In my work situation, the moral problem is; I am upgrading a piece of machinery, upon the start of the project, I have been

made aware that there is no hard wire removal of power within the safety circuit. The safety interlocks of the machine are strictly controlled by programming. There are numerous individuals which are affected by the resolution of the problem, including, engineers, machine operators and skilled tradesman. In order to update the safety circuit of the machine, the machine will need to be completely re-wired, which will drastically affect the overall funds available for the project. So what should I do? Keep quiet and continue with the upgrade, and pretend that I am unaware there is a issue with the safety circuit, or make everyone aware of my concerns?

Secondly, there is the problem analysis. During this step, the relevant elements of the moral problem are described. There are three important elements: the interests of the stakeholders, the relevant moral values and the relevant facts (Stanwick & Stanwick, 2009). Unfortunately, facts arent always entirely clear. In my situation the shareholders are affected, due to the fact if there is an injury or someone killed due to the deficiencies of the machine safety circuit, the company will be faced with an enormous law suit. Also, as an electrical engineer, I am obligated by law to address and rectify the situation since I have become aware that there is an issue.

Thirdly, we need to generate possible options for actions. During this step creativity is of major importance. Also, the strategy of cooperation can be useful in order to develop alternatives. In this strategy, stakeholders are consulted for possible actions to solve the problem (Stanwick & Stanwick, 2009). This may often lead to win-win situations. And, next to the standard options, the option of whistle-blowing should also be kept in mind as a last resort. In my situation, I called a meeting with my Team Manager and Lead Engineer. I informed them

about the situation of the machine deficiencies, and instructed them that it will put us over budget to rectify the situation.

The fourth step of the ethical cycle is the ethical judgment step; the moral acceptability of the various options for action is evaluated. This can be done on the basis of formal frameworks and informal frameworks. Formal frameworks include codes of conduct and ethical theories like utilitarianism and duty ethics (Stanwick & Stanwick, 2009). Examples of informal frameworks are intuition and common sense. When using intuition, you choose the action that is intuitively most acceptable. When using common sense, you weigh the options for the possible actions, in the light of the relevant values. In my situation, I was always taught to practice due diligence, and as I mention earlier, I am obligated to address the concern of the safety circuit. This is my number one priority, once this addressed and resolved, then I may address the machine upgrade as initially I initially intended.

The final step of the ethical cycle is the reflection. A reflection of the options that were considered viable in the previous step is required in order to establish the final course of action (Stanwick & Stanwick, 2009). It is during the reflection stage that the outcomes of the ethical judgment stage are further evaluated so a definitive course of action can be determined. It is important to note that different ethical frameworks dont always lead to the same conclusion. In my situation, I did not proceed with the machine upgrade as initially discussed; instead, I reengineered the safety circuit so that it satisfied the requirements as becoming a category 4 safety circuit. My actions did not go unnoticed, the following year I received the Ford Health and Safety award for my actions.

Ethics is very well known for being about doing the right thing, and not just presenting the right idea. Many corporations are not responsible for making ethical decisions, although the employees of that corporation have the overall responsibility of the decisions being made, whether is ethical or unethical. There are three steps which have been identified by the Institute of Business Ethics; they include transparency, effect and fairness (Stanwick & Stanwick, 2009).

Transparency "refers to deciding if one accepts having others know what one has decided" (Stanwick & Stanwick, 2009, p.25). In other words, am I happy to make my decision public, especially to the people affected by it? Effect refers to determining who the decision affects or impacts. Therefore in an ethical situation, have I fully considered harmful effects of my decision? How may I avoid them? The final step is fairness, which refers to determining if the decision would be considered by those affected by it. In this step you need to consider all the individuals who are involved even the stakeholders. Therefore the ethical cycle and the three simple ethic tests both go hand in hand, they are equally important in order to properly make the correct ethical decision.

References Stanwick, P.A., & Stanwick, S.D. (2009). Understanding business ethics. Upper Saddle River, NJ: Pearson-Prentice Hall.

Question 2 Discuss the eight ethical principles in the Global Business Codex. Using these principles, describe an example of a company that does follow one of these principles, and then describe an example of a company that does not follow one of the principles/ The Global Business Standards Codex contains a set of principles as well as a set of conduct standards for putting those principles into practice. The GBS Codex is not intended for individuals to adopt as is, but is meant to be used as a benchmark by those wishing to create their own world-class code. The provisions of the codex must be customized to a company's specific business and situation; individual companies' codes will include their own distinctive elements as well (Stanwick & Stanwick, 2009). What the codex provides is a starting point grounded in ethical fundamentals and aligned with an emerging global consensus on basic standards of corporate behavior. The text has noted eight ethical principals, which include;

Fiduciary Principle, each officer has a legal fiduciary duty to act in the best interests of the stakeholders and other employees within the firm. A fiduciary may carry out the companys business in a diligent and loyal manner, with the degree of honesty which is expected of a trustee. In addition, they must promote the companys legitimate interests in a diligent and professional manner (Strickland, 2011). They must also maintain the companys economic health and safeguard the companys resources and ensure their prudent and effective use. It is also assumed that the employees will refrain from giving and receiving excessive gifts and entertainment therefore providing a fair and competitive return on investment (Stanwick & Stanwick, 2009). The employee must only use its position and company resources for company

purposes only, and may not disclose potential conflicts between personal and company interests. The employee must refrain from activities involving actual conflicts of interest, such as self dealing and competing with the company. It is important that they refrain from pursuing, for personal benefit, opportunities discovered through position or company resources (Stanwick & Stanwick, 2009).

The property principal is the belief that every employee should respect the property as well as the rights of the owners of the property. Some common examples of this include theft, misappropriation of funds, and wasting valuable resources. Over the years, this principal has been expanded to include intangible property and now also includes the misappropriation of intellectual property or other types of information. It is expected that the employee protect the tangible and intangible assets of the firm. It is expected that the employee should be a good steward to the resource he or she has access to (Stanwick & Stanwick, 2009).

The reliability principle is based upon the belief that it is the employee's responsibility to honor the commitments which he or she has made to the firm. It is therefore expected that the employees will follow through with the promises and commitments that have been made between the employees and the firm (Stanwick & Stanwick, 2009). Some common violations of the reliability principle include; breaching a promise or a contract or not fulfilling a promised action. It is expected that the employee will do his or her best to make good faith effort to fulfill the commitments that the employee has promised.

The transparency principle is based on the belief that every employee should conduct business in a truthful and open manner. It is expected that all employees will not make decisions based on their personal agenda (Stanwick & Stanwick, 2009). Therefore, the employees will not act in a deceptive manner and to keep accurate and current records of all of the business obligations that are currently the responsibility of the employee. Transparent actions include accurate and up to date record keeping of the information related to the actions and the decision making process. In addition, transparency guides the employees in ensuring that the relationship between the company and its suppliers are handled in an honest manner. Transparency will also ensure that the firms marketing focus will not be mislead or misinform its current potential customers. The benefits of following the transparency principle include the ability to make better informed decisions, the ability to ensure that the truth is always presented to others in the organization, and allow for improved cooperation within the firm through the development of trust among the employees (Stanwick & Stanwick, 2009).

The dignity principle is based on the belief that each employee needs to respect the dignity of all individuals. Protecting the dignity of people in society includes ensuring the human rights of health, safety, and privacy (Stanwick & Stanwick, 2009). In addition, the dignity principle encourages the enhancement of human development no only within the company and the marketplace, but also within society. Therefore, any type of humiliation, coercion or other type of human offences is in direct violation of the dignity principle. The principle also involves making affirmative efforts for those individuals who need help in their personal pursuits, and it also helps protect those individuals who are vulnerable to unethical actions. The dignity

principle highlights the sensitivity the employees should have as they interact with people from other cultures or countries (Stanwick & Stanwick, 2009).

References Stanwick, P.A., & Stanwick, S.D. (2009). Understanding business ethics. Upper Saddle River, NJ: Pearson-Prentice Hall. Strickland, W. (2011, February 06). Company ethics and conduct. Retrieved from http://www.angelfire.com/tx3/wstrickland/BIC/BIC_Editorial_Feb_06.pdf

Question 3 List and discuss in depth the three teleological frameworks and the three deontological frameworks. What are the advantages and disadvantages of each? Of these six frameworks, which one do you most associate? Teleological Frameworks Teleological frameworks focus on the results of the conduct of the individual. Derived from the Greek word for fulfillment, telos, these frameworks focus on the ramifications, positive and negative, resulting from the actions and conduct of individuals. The three teleological frameworks are ethical egoism, utilitarianism, and Sedgwicks dualism (Stanwick & Stanwick, 2009).

Ethical Egoism Although Thomas Hobbes has been credited with the development of ethical ego-ism, it can be said that Plato may have actually been the father of the ideas that have evolved into it. Contemporary writers such as Ayn Rand have adopted the concept of focusing on each individuals self- interest (Stanwick & Stanwick, 2009). Ethical egoism is based on the belief that every individual should act in a way to promote him or herself if the net result will generate, on balance, positive rather than negative results. Derived from the Latin word ego, which is defined as one's self, ethical egoism allows for self- interests to play a role in the actions of the individual as long as there are also positive benefits for others. Many individuals who abide by the philosophy of ethical egoism may have different interpretations of what would be considered on balance an action that is good for others as well as themselves (Stanwick & Stanwick, 2009). Some ethical egoists may argue that based on their own perceptions, all of their actions on

balance generate more positive than negative benefits. This level of rationalization may evolve into the justification that pursuing a persons self- interest is necessary to generate a positive outcome for others. The supporters of ethical egoism argue that this framework is the only ethical model that captures the essence of motivation within individuals. Without self-interest, ethical egoists would argue, why would someone do any action? As a result, ethical egoists will argue that their philosophy supports a win- win proposition (Stanwick & Stanwick, 2009). An individual will reward his or her self- interest while also yielding benefits for the rest of society.

Those who argue against ethical egoism state that part of the connection of the actions that motivate an individual also require certain obligations of an individual. In addition, human motivation is primarily based on purely selfish factors, meaning that there should also be no selfish factors that motivate individuals and make them unique human beings.

Utilitarianism The utilitarianism movement started in England in the eighteenth century. Originally developed by Jeremy Bentham in his Introduction to the Principles of Morals and Legislation in 1789 and John Stuart Mills Utilitarianism in 1863, utilitarianism holds the belief that any action of an individual will be based on providing the greatest good for the greatest number of people derived from the word utility (Stanwick & Stanwick, 2009). Utilitarianism is based on the

principle of utility where each persons actions add to the overall utility of the community impacted by those actions (Stanwick & Stanwick, 2009). As a result, utilitarians will focus on the net result of their actions instead of the means or motives that generated the reason for their actions. Utilitarianism can be based on single acts of individuals or on guiding behavior

indirectly through an evaluation of ethical conduct via rules procedures. Those who support utilitarianism state that this theory is the only one that captures the essence of benevolent behavior. Without utilitarianism as a framework, supporters would argue that people would not do actions that help others if the action doesnt benefit the self- interests of the individuals (Stanwick & Stanwick, 2009).

Sedgwicks Dualism In 1874, the Methods of Ethics by Henry Sidgwick was first published and attempted to bridge the gap between the two competing ethical frameworks of ethical egoism and utilitarianism (Stanwick & Stanwick, 2009). Sidgwick argued that a common ground could be found between the two theories. At the core of the argument is that both previous theories had elements of using cost- benefit analysis to help analyze the actions of individuals. Sedgwicks dualism attempted to resolve the fundamental difference of whether the actions for ones selfbenefit impact just the individual or others (Stanwick & Stanwick, 2009). Sidgwick argued that utilitarianism is a foundation component of any ethical frame-work, which he called rational benevolence. Although, he also argued that the self- interest of ethical egoism must be included in the ethical framework he called prudence. He argued that rational benevolence is necessary in an individuals actions, but he also stated that prudence is necessary because the happiness of the individual is the common goal of the action and it would not be logical for an individual to sacrifice his or her own happiness to help others. Therefore, he argued that a harmony can exist among rational benevolence and prudence viewpoints to have a rational ethical model. He concluded by stating that there had to be some reconciliation between the two theories to explain

how individuals act in their own self- interest as well as in those interests of others (Stanwick & Stanwick, 2009). As a result, these frameworks can be used to present different arguments from a business perspective. Those supporters of the ethical egoism theory would argue that businesses should focus solely on their own self- interests and maximize their level of profitability by developing a strong competitive advantage (Stanwick & Stanwick, 2009). Those who support the utilitarianism theory would accept government intervention as a way to protect the interests of the majority against the decisions of the minority within any given business. In his book, An Inquiry into the Nature and Causes of the Wealth of Nations, Adam Smith presented an argument that could support Sedgwicks dualism. Smith argues that the greatest good for the greatest number is achieved by individuals pursuing their self-interests in the marketplace (Stanwick & Stanwick, 2009).

DEONTOLOGICAL FRAMEWORKS As opposed to teleological frameworks, which focus on whether the results are favorable or not, deontological frameworks focus on the duty or obligation in determining whether the actions are right or wrong (Stanwick & Stanwick, 2009). Deontological is derived from the Greek word "deon", which means duty. There are three deontological frameworks: existentialism, contractarianism, and Kants ethics.

Existentialism Existentialism is based on the underlying belief that the only person who can determine right and wrong is the person making the decisions. As a result, each individual determines his or her

own actions and is ultimately responsible for the consequences of those actions. Philosophers such as Sren Kierkegaard, Friedrich Nietzsche, and Jean- Paul Sartre have all embraced existentialism as the most viable way to connect duty with actions (Stanwick & Stanwick, 2009). It is through authenticity of their actions that individuals are able to develop their own sense of personal virtue. As a result, existentialism would not utilize universal principles because each individual determines that acceptance of his or her own actions.

Contractarianism For centuries, philosophers have tried to explain why people form governments to establish and maintain social order and why they surrender some natural liberties for the sake of a well ordered society. The social contract theory is one prominent explanation that philosophers like Thomas Hobbes, John Locke, and Jean-Jacques Rousseau have used since the 17th century. It states that individuals (and businesses) willingly trade some of their freedoms in exchange for a government or society that can protect their individual and collective interests (Stanwick & Stanwick, 2009). Today in business, social contract theory implies a social contract between business and society. Corporations are allowed to do business because of the belief that corporations benefit society, and companies have certain ethical obligations to promote the interests of society. In general, the bargain between business and society holds that economic activity adds value to society and, therefore, that business is good, but business also has a responsibility not to take advantage of societies support (Stanwick & Stanwick, 2009).

Kants Ethics

In Kant's book named Foundations of the Metaphysics of Morals (1785), Immanuel Kant discussed ethical decisions based on the free will of the individual. Kant argued that the free will to make decisions that were considered rational needed to be converted into a universal will (Stanwick & Stanwick, 2009). Kants ethical view is considered a dualism because it attempted to bridge the gap between the existentialist and contractarian points of view. The linkage Kant made was to consider his principle pertaining to free will based on the philosophy that an individual should act in a way in which one would expect everyone to act if it were a universal will and to treat other individuals as the end, not the means to an end (Stanwick & Stanwick, 2009). As a result, Kant eventually rejected the view of using heuristics or gut feelings as a justification for a decision because these findings are not always predictable nor are they acceptable. In addition, the rationale for not committing an illegal act such as dumping dangerous chemicals into a water source should not be based on the legal requirements or the potential negative image that would be created for the company. Kant would argue that "the manager should consider only whether his free will action to dump the toxic waste would be acceptable as a universal will in which any company or individual could dump any chemical they want into any water supply" (Stanwick & Stanwick, 2009, p.7). Kant argued that this should be the only way in which managers should consider their decisions.

References Stanwick, P.A., & Stanwick, S.D. (2009). Understanding business ethics. Upper Saddle River, NJ: Pearson-Prentice Hall.

Question 4 Review table 2-1 in the textbook, which relates to the myths about business ethics (page 23). Select three myths, and discuss why they represent a general misunderstanding about business ethics. When it comes to business ethics in the workplace, I feel it is about prioritizing moral values for the workplace and ensuring behaviors which are aligned with those values and its values towards management. The textbook has identified 10 myths about Business ethics. I feel that some of these myths arise from general confusion about the notion of ethics. Other myths arise from narrow or simplistic views of ethical dilemmas. I have chosen 3 myths and will discuss my opinion regarding the general misunderstanding about business ethics. The first myth about business ethics I have chosen is "business ethics is based solely on the belief that you will always do the right thing". Many people react that codes of ethics, or lists of ethical values to which the organization aspires, are rather unnecessary because they represent values to which everyone should naturally aspire. However, the value of a code of ethics to an organization is its priority and focus regarding certain ethical values in that workplace. For example, its obvious that all people should be honest. However, if an organization is struggling around continuing occasions of deceit in the workplace, a priority on honesty is very timely and therefore honesty should be listed in that organizations code of ethics (Madsen and Shafritz, 1990).

The second business myth chosen is "Business ethics is theoretical and abstract philosophical concept". I believe that the lack of involvement of leaders and managers in business ethics literature and discussions has led many to believe that business ethics is a fad or movement,

having little to do with the day-to-day realities of running an organization. They believe business ethics is primarily a complex philosophical debate or a religion. However, business ethics is a management discipline with a programmatic approach that includes several practical tools (Madsen and Shafritz, 1990). Ethics management programs have practical applications in other areas of management areas, as well.

The third myth regarding business ethics is "Business ethics equals corporate social responsibility". The social responsibility movement is one aspect of the overall discipline of business ethics. According to Madsen and Shafritz authors of the book Essentials of Business ethics, they refine the definition of business ethics to be: 1) an application of ethics to the corporate community, 2) a way to determine responsibility in business dealings, 3) the identification of important business and social issues, and 4) a critique of business (Madsen and Shafritz, 1990). Items 3 and 4 are often matters of social responsibility. Writings about social responsibility often do not address practical matters of managing ethics in the workplace, e.g., developing codes, updating policies and procedures, approaches to resolving ethical dilemmas, etc.

References Madsen, P. and Shafritz, J. M., (Eds.), (1990). "Essentials of Business Ethics". New York: Penguin Books.

Question 5 Examine the three simple tests identified by the institute of Business Ethics (page 25). Use these tests, and discuss a decision you made dealing with ethics According to the Institute of Business Ethics, they have identified three simple ethical tests to use for business decisions. They include transparency, effect, and fairness (Stanwick & Stanwick, 2009). I will use each of the three tests identified and discuss a recent decision I have made in my workplace using ethics.

Transparency, this can be summarized by asking the question " Do I mind others knowing what I have decided". I was in a situation recently where one of my main suppliers willingly offered me a very generous offer, to see a hockey game out of town. The trip would be all expense paid, including the flight, overnight stay in the Hilton and all meals paid for. The seats at the game were in a V.I.P box in the arena which my supplier rents for the year. This offer was very tempting, but according to our company's ethics handbook, it states that I am only allowed to accept gifts of nominal value. According to my employer, nominal value is estimated to be a maximum of $50. So, back to the ethical test of transparency, if I was to accept such a generous gift, I would obviously be uncomfortable with anyone knowing that I have accepted the gift. So, I thankful declined the offer. It is possible that if I had accepted the offer, I would be disciplined or even terminated. This was not worth the risk in my opinion.

Effect, may be summed up as asking the question, who does the decision affect or hurt? The effect of me accepting the offer of my supplier can affect me and hurt the reputation of my

employer. Ethically, it would be as though I am accepting some sort of bribe, to ensure that this supplier continues to conduct business with myself and my employer.

Fairness, would this decision be considered as fair by those affected. In the situation of the hockey game, this would not be fair to those affected. This supplier, who made me the offer, is also a big competitor of other suppliers which I deal with. The other suppliers are not as large, so therefore, they could not compete with a generous offer as the one given me. To be fair, if I was to accept the offer, it is possible that it may sway my judgment, and I give special treatment to this supplier offering me the all expense paid trip.

References Stanwick, P.A., & Stanwick, S.D. (2009). Understanding business ethics. Upper Saddle River, NJ: Pearson-Prentice Hall. The in-text citation should be (Stanwick & Stanwick, 2009).