In this document you will find: the materials of the slides, the reality checks and the readings of the handbook.
This summary will save you a lot of time on the exam and you won't have to go back and find everything in the books. I had achieved distinction on this subject. My advice: read everyt...
- ‘It takes 20 years to build a reputation and five minutes to ruin it’ => leg vb’n uit van Enron,
Madoff!!! Zie ook making business case for CSR!!!
- Ethics is the new competitive environment => leg uit de voordelen van ethics en het
contrast met unethical behavior!
- If moral behavior were simply following rules, we could program a computer to be moral
=> slide 18!!!
1) Making the case for business ethics
o Verschil tussen Business (economic) and ethics (morality) => Adam Smith problem!!
o To make a responsible DM => look at all stakeholders!!!! Not only stockholders
Golden rule: one should treat others as one would like others to treat
oneself. One should not treat others in ways that one would not like to be
treated.
o Why studying ethics? Reasons?
Unethical behavior has impact on many people (zie vb Madoff) + create
legal, financial and marketing risks
Reading 2.2: Poor management makes unethical behavior easier to
get away with. This might involve sloppy accounting, but it could just
as easily involve poor training, poor oversight, and unclear lines of
accountability. There are more complex cases, in which lack of
business skill results in a desire by some employees to engage in
compensatory wrongdoing, and that wrongdoing is made easier by
ongoing incompetent accounting (Chris MacDonald)
Bad companies can lose in marketplace + jail
Good companies create competitive edge via good reputation, attracting and
holding good employees, values like trust (zie ook slide 7), zie ook H5: ethics
pays off, ethics pays (zie RC p9)
Ethical systems gives the follower list of ways where ethics pays for
corporations (RC p9)
o Good reputation is valuable
o Illegal conduct can be extremely costly
o Good governance pays off financially
Ethics pays off (H5)
o Better reputation (employees, customers,….)
o Risk management: health and safety, avoiding conflicts
o Access to new markets
o Incentives for creativity and innovation
o Tax deduction and avoiding legislation
Future managers must be seen as role model!!!! They must manage the
ethical behavior => zie vb Prince Bandar en AIG
2) Business ethics as Ethical DM
o Ethics= how human beings should live their lives (not our own!!!) => think for
yourself what’s good and bad , be rational
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,3) Business ethics as personal integrity and social responsibility
o Ethical business leadership!!!! = the leader has to create a culture where good
people do good things and bad people are prevented from doing bad! (zie ook H4)
o (Philosophical) Ethics= ethics is normative: how and why (otherwise it’s only an
opinion, you need to convince other people!) people should act. (Not descriptive by
social sciences: how and why people do act) => it has to be rational (reasons to
support your decision)! Vb. I don’t kill people because I want to be a peaceful person
(why) <-> I Kill because it was fun
!!! It’s also important to answer not the why in religious terms (vb. Je moet je zo
gedragen omdat God dat beveelt) because then it would seem that ethics cannot
escape from ethical relativism. So it’s universal: every person is equal (vb. Voor alle
mensen ongeacht hun geloof).
Oke, BUT HOW should WE live?
Individually (value- based culture, H4): values (personal integrity or
morality)
Collectively (compliance-based culture, H4): follow rules, norms in
society = social responsibility: what do society expect from us? Vb
law
Managerial decisions involve both aspects of value but their can be
overlapping!!!
o So we know ethics is a normative approach as it deals with norms (H3)
Geschikt en juist gedrag vb don’t steal
Not all are ethical vb etiquette: don’t talk during lectures
Beroep op bepaalde values bv respect for the other and his life
4) Destinction between values and ethics (H3)
o Values: underlying beliefs that cause us to act or to decide one way rather than
another , motivators the reasons why we do things!!!
Verschillende vb financial religious,;..
Individuals and business (in culture) have values
Values can also lead to unethical results vb Enron
Why values useful? => uit Reading 1.1
To hire qualitative employees, minimize transaction costs and
building a good reputation on the market (Wipro company)
They are also a critical succesfactor in the business world
That’s why it’s important to have a business culture => having a
corporate culture with the right values is the most powerful what
you can do! Culture you establish will guide and teach all your
people in all their decisions => culture more important than you for
success/failure! (Scott Cook)
o Ethical values: serve the ends of human well-being (happiness, respect, life, health,
freedom, compassion) => they will impartially promote human well-being => so its
good for ALL parties involved!!! (not only for yourself)
=> it’s a universal (all parties) and anthropocentric (human centered)
approach
Vb. Norm: don’t kill => value: protecting life => ethical value : life
5) Ethics and law (H4 en 6)
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, o Legal norms and ethical norms are not the same!!! (zie vb’n)
o => even following law, managers often face decisions that challenge their ethical
judgments : what should I do?
H2: Ethical DM: Personal and professional contexts (ODP: Ipod)
Quotes:
- It’s very important to know who you are. To make decisions. To show who you are. => You
have to make a decision that is in line with the person that you are or that you want to be! It
must be in line with the values that you have!!!
- The time is always right to do what’s right => you have to think in a structured way when
you make a decision making process! So that you can defend your choices! It’s a helpful
beginnening to make a reasonable , ethical and accountable decision! Explain than fully
EDMP, and says also that you have higher chance that the ethical DM will not go wrong
- Nearly all men can stand adversity, but if you want to test a man’s character give him
power => Zie EDM in managerial roles!!! Slide 17
1) Decision making process for ethics
o 1e stap: Determine the facts (zie apart blad)
o 2e stap: identify ethical issues (zie apart blad)
Business and ethics often intersect: you take an economic decision but it can
have ethical consequences => look at human well-being!!! Vb Addidas => zie
ook Adam Smith problem!!!
Some people don’t recognize there are ethical issues: harming well-being of
of people, ethics at stake. Not seeing ethical issues => problems (3) + RC p 43
Normative myopia/ shortsightedness about values => not seeing
values or issues at stake
Inattentional blindness: failure to success. It means that you focus
on 1 thing and miss focus on whole thing vb. Reducing costs and miss
important issues
Change blindness: when gradual change goes unnoticed => change
goes slowly but at end big problem => vb Enron was audited and
they didn’t see anything, SPV from 1 to 100 => Andersen wasn’t
seeing it because it became bigger!!
Ethical blind spots (RC p 43)
Implicit biases: individuals typically fail to recognize the harm that
implicit favoritism of in-group members causes to members of social
out-groups
Temporal distance: We tend to believe that we will follow our moral
compasses “when the times comes”, but when the time actually
comes, we become more likely to go with our immediate wants.
Failure to notice others’ unethical behavior: we are less likely to
condemn other people’s behavior when we benefit from it, or when
we have encouraged it
Ethics of cheating (RC p 51)
3
, Business undergraduate students are most likely to have cheated on
test, when compared with prelaw students and the general
population. Not cheating is the best way to get ahead in the long
run, business students claimed ‘you snooze, you lose’. Is there
perhaps a failure in ethics in the business arena because the people
who go into business already cheat? Or is it that business students
are aware that the business arena demands this type of unethical
conduct so they prepare themselves for it from start?
Competitiveness might blur the border between ethical and
unethical.
Reading 2.1: when good people do bad things at work
Scripts: in situations where we observe the pain of those in need,
scripts permit us to steel ourselves against feelings of empathy.
Scripts allow people to avoid responsibility for the suffering of thers
in situations when providing help appears costly. This might explain
(in work context) why business people do not always respond
philanthropically to documented cases of human suffering.
Whenever there is repetition, there are likely to be scripts. The best
way to eliminate the potential of scripts to result in unethical
behavior is to keep people out of highly repetitive situations.
Technology can be used to eliminate highly routine tasks but job
rotation is also an option.
Distractions: for example students were told that they had to deliver
a lecture from prepared notes in a classroom across campus. Half the
students were told they had to hurry to be on time, and the other
half were told they had more than ample time. On the way, the
students came across a person in distress who sat slumped
motionless in a doorway. Only 16 of 40 divinity students stopped to
help, most of them from the group had ample time. To those in a
hurry, the man was a distraction, a threat to their focus on giving a
lecture. Mindlessness about distractions at work is most pronounced
when employees, with limited means of gaining perspective, are
encouraged to be focused and driven.
Moral exclusion: when individuals or groups are perceived as
outside the boundary in which moral values and considerations of
fairness apply. One way such exclusion shows up is in our use of
pronouns. If we are in marketing and they are in production, the
chances are that the distance may be great enough for us to be
morally indifferent to what happens to them.
When ethical decision making goes wrong (slide 15, zie ook apart blad):
reasons why we take bad decisions!
Some stumbling blocks to responsible DM are intellectual or
cognitive
o Intentional ignorance: I take it and don’t think any longer,
you put it away
o Considering only limited alternative: I don’t take it, someone
else will do
o Finding comfort in simplified decision rules vb FIFO
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