BUSINESS ETHICS

"Let me appeal to your sense of doing things my way"

Cartoon by P.C. Vey Copyright 2004, Harvard Business Review

BUSINESS ETHICS
Can Business be Ethical?
Do Ethics matter More Now than Before? Whose Ethics are They?

Isnt the Best Ethic maximizing Shareholder Value?

WHAT ARE UNETHICAL BUSINESS PRACTICES?

Abusive or Intimidating Behavior Accurate but Incomplete Disclosures Discrimination against Protected Class Receiving/Offering Bribes, Kickbacks or Incentives Theft or Fraud: Personal Use of Company Property or Expense Account Misrepresentations Sexual Harassment Termination without Fair Notice or Cause

WHY DO ETHICS MATTER?

Does Doing the Right Thing Matter? To Whom Does it Matter?
What are the Costs to Business of Unethical Behavior?

ETHICS AND THE LAW

Legal Requirements often represent an
Ethical Minimum Personal Ethical Standards Generally Exceed Legal Standards

ETHICS
LAW

Laws are Ethical Issues with Societal Implications as interpreted by a Legislature; Personal Ethics have Broader Context and Application

LEVELS OF BUSINESS ETHICS

What are the different levels at which issues originate and how they move to other levels?

Individual Organizational Association Societal International

FORCES THAT SHAPE BUSINESS ETHICS

Personal Ethics
Beliefs and Values Moral Development Ethical Framework

Organizational Culture
Founder History Defining Moments Stories of Development

Organizational Systems
Structure Policies and Rules Code of Ethics Reward System Selection and Training

Is Decision or Behavior Ethically and Socially Responsible?

External Stakeholders
Government Regulations Customers Special Interest Groups Market Forces

PERSPECTIVES ON ETHICS
Ethical Issues require Persons or Organizations to choose an Action that may get judged as right or wrong

Classifications of Business Ethical Issues

Conflicts of Interest Fairness and Honesty Communications Organizational Relationships

CONFLICTS OF INTEREST
USUAL FORM: Financial Interest or Bias
MINIMAL RESPONSE: Full Disclosure
and Withdrawal from Participation
The Probability of Somebody Watching You is Directly Proportionate to the Stupidity of Your Actions

- Kelly M. ODonnell

BIAS OF BUSINESS IN ETHICAL DILEMMAS

When confronting Ethical Conflicts, Businesses Seek to Preserve the Organization Customer Relationships and Employee Concerns Corporations are Legal Fictions created and managed by Shareholders, Directors and Employees

FORMAL ETHICS STRUCTURES AND SYSTEMS

Formal Reporting System: Ethics

Ombudsperson - Unbiased and Neutral but with Authority Code of Ethics (Standards) and Code of Conduct (Actions) Communications Network: Formal and Informal Processes for Reinforcing and Refreshing

HOW BUSINESS CAN GET IT

Organizations that Promote an Ethical Climate provide an Opportunity to develop an Ethical Culture Starts with Organization-wide Commitment: Organizations have to WANT to Do the Right Thing - Obtain Commitments from CEO, President and Board of Directors With Commitment, Organizations can Define their Right Thing and decide How to Do It

CRITERIA GUIDING ETHICAL ACTIONS

Is Action consistent with Organizations
Goals, not motivated by self-interest? Does Action respect the Rights of Individuals and Groups affected by it? Does Action satisfy Standards of Fairness and Equity? Would You wish Others to Behave in the Same Way if Action affected You?

BOTTOM LINE OF ETHICAL LEADERSHIP

Decision-making includes Personal, Organizational and Societal Values Ethical Values always open to Discussion and Criticism subject to Fire Wall between Immutable Standards and Case-by-Case Exceptions Accept Responsibility for Sound Moral Judgments: Its in Everyones Job Description