Part One

Basic Principles

What is business ethics?

- It is the application of our understanding of what is good

and right to that assortment of institutions, technologies,
transactions, activities, and pursuits that we call business

- A specialized study of moral right and wrong that

concentrates on moral standards as they apply to
business institutions, organizations, and behavior

- It studies moral standards and how these moral

standards apply to social systems and organizations
that produce and distribute goods and services

It considers the following questions

What are the framework of basic principles

for understanding GOOD and RIGHT?

What does ethical mean to you?

What are the ethical values

necessary for a successful business?

Should we seriously consider ethics

in business?

Short Activity

Identify ethical values that are helpful for a successful

business

Identify values and practices that are not helpful in

business

Identify situations in business organizations where

these values are practiced

Doest ethics matter in business?

Yes: Manuel Velasques

Ethical behavior is more profitable, more rational and

more intrinsically valuable than unethical behavior

Ethical behavior and the development of the virtues that

results in ethical behavior are the best predictors of
profit in business organizations

No: David M. Messick

Velasques conclusion is oversimplified if they aim to

predict that the rational businessperson will regularly
follow ethical rules of conduct

He asserts that actual behavior, in business and in other

areas of life, tends to be nuanced combination of
egotistical and justice-oriented-profit-maximizing
actions

Ethics is not the ONLY thing that matters in business

If we agree that ethics matter, along with a variety of

other, we my see some wisdom in the view that
unethical actions may occur not because ethics doesnot
matter but because other matter more or mistakes are
made

Synthesis

Shall i live a moral life?

Someone cant answer that in a day or week, however,

the less we think about it, the more definitely it will be
answered by our action

Globalization, Multinationals, and

Business Ethics

Many of the most pressing issues in business

ethics are related to the phenomenon of
globalization

Globalization is the worldwide process by which the economic and

social systems of nations have become connected together so that
the goods, services, capital, knowledge, and cultural artifacts are
traded and moved across national borders at an increasing rate.

Its components includes

- the lowering of trade barriers and the rise of

worldwide open markets

- the creation of global communication and

transportation systems such as internet and
global shipping

- the development of international

trade organizations such as WTO

- the establishment of international financial institutions

such as the World Bank and the International Monetary
Fund that facilitated the flow of capital

Thus, the spread of Multinational

Corporations

Multinational Corporations (MC) are at the heart

of the process of globalization and responsible for
the enormous volume of international transactions

MC maintains manufacturing, marketing,

service, or administrative operations across
bounderies

MC draws capital, raw materials, and human

labor from wherever in the world they are
cheap and availble

Globalization has brought the world

significant economic benefits.

Multinationals like NIKE, MOTOROLA, and FORD

build factories and establish assembly operation in
countries with low labor cost, they bring jobs, skills,
income and technology raising the standards of living

Globalization has enabled nations to specialize

in producing and exporting goods and services
that they can produce most efficiently

Many studies have shown that growth is

correlated with openness to globalization

The more willing a nation to lower its trade

barriers and to allow free trade with other
nations, the higher its economic growth rate

BUT...

Globalization is also accused of

inflicting significant harms on the world

While globalization has been especially

beneficial for develop nations that have highvalued products to sell (high-tech products),
many poorer nations in Africa have been left
behind for they can only sell cheap raw materials

WB reports, as globalization has spread,

inequality has increased both between nations
and within nations

Giving MC free at hand resulted to global

decline in labor, environmental and wage
standards

MC have introduced sweatshops working

conditions and exploitative wages

MC closed factories in their home countries,

leaving thousands of workers there without
jobs

Thus, globalization has posed

important ethical questions for MC

Ethical Questions for MC

What are their obligations to displaced workers in their home countries?

Do multinationals have obligations to try to improve the labor,

environmental and wage standards of the various countries?

Do they have any obligation to refrain from exploiting workers in other

countries?

Or should they simply look toward lowering their labor cost by

whatever means?

Do MC have any obligations to ensure that foreign users of their

technologies can protect themselves against the risk they pose?

How should MC behave when operating in other cultures?

Business Ethics and Cultural

Differences

Faced with the fact that different cultures have

different moral standards, managers of some
MC adopted the theory of Ethical Relativism

Ethical Relativism (ER) is the theory that, because different

societies have different ethical beliefs, there is NO rational
way of determining whether an action is morally right or
wrong

ER is the view that there are no ethical standards

that are absolutely true and that apply or should be
applied to the companies and people of all societies

Is ER reasonable view to hold?

There are numerous practices that are judge immoral by some societies
that other societies have deemed morally acceptable, including
polygamy, abortion, infanticide, slavery, homosexuality, racial and
sexual discrimination, genocide, patricide and the torture of animals

However, there are also certain moral

standards that any society should accept if that
society will survive.

All societies have norms against injuring or killing other

members of society, norms about using language truthfully
when communicating, and norms against taking the personal
goods of another

Thou shall not kill...

Thou shall not lie...
Thou shall not steal...

Objections to the Theory of ER

Some moral standards are found in all societies

Moral differences do not logically imply relativism

Relativism is incoherent theory

Relativism privileges the current moral standards of a

society

Technology and business ethics

Almost all issues raised by new technologies

are related to the question of risk

Are the risk of new technologies predictable?

How large are the risk and are they reversible?

Are the benefits worth the potential risks and who

should decide?

Do those persons on whom the risk will fall know about

the risk and have they consented to bear these risk?

Will they be justly compensated for their losses?

Many of the ethical issues new technologies

have created especially information
technology are related to privacy

Computers enable us to collect detailed

information on individuals on a scale that was
never possible before

Such as

Tracking users on the internet

Gathering information on customers at cash registers

Collecting information on credit card purchases

Retrieving information from applications for licenses,

bank accounts, credit cards, email, monitoring
employees working at computers

They have the power to quickly link

this information to other databases

Like

Containing financial information

Purchase histories

Addresses

Phone numbers

Driving record

Arrest records

Credit history

Medical and academic records

Ethical Principles in Business

What is the central question posed in the

utilitarian approach to moral evaluation?

How can a concept of a right be

applied to business situations?

What is justice?

What is the key concept underlying

an ethic of care?

Is it possible to integrate the various

approaches to moral evaluation?

What role does character play in

morality?

What are the special challenges of applying

business ethics in an international context?