TABLE OF CONTENTS
ethics and business ........................................................................................................................................ 3
making the case for business ethics ................................................................................................................... 3
making the case for business ethics ................................................................................................................... 4
making the case for business ethics ................................................................................................................... 4
business ethics as ethical decision ..................................................................................................................... 4
business ethics as personal integrity and social responsibility ........................................................................... 5
distinction between values and ethics ............................................................................................................... 6
ethics and the law .............................................................................................................................................. 7
ethics as practical reason ................................................................................................................................... 7
Ethical Decision Making – personal and professional context ......................................................................... 8
A decision making process for ethics.................................................................................................................. 8
When ethical decision making goes wrong ...................................................................................................... 11
Ethical decision making in managerial roles .................................................................................................... 12
Philosophical ethics and business ................................................................................................................ 13
Ethical frameworks .......................................................................................................................................... 13
Decision-making model revisited ..................................................................................................................... 20
The corporate culture – ImpacT and implications ......................................................................................... 22
what is corporate culture ................................................................................................................................. 22
What is corporate culture ................................................................................................................................ 24
culture and ethics ............................................................................................................................................. 25
culture and ethics ............................................................................................................................................. 26
Compliance and values-based cultures ............................................................................................................ 26
Ethical leadership and corporate culture ......................................................................................................... 27
Effective leadership and ethical, effective leadership ...................................................................................... 27
Building a values-based corporate culture ....................................................................................................... 28
The corporate culture ....................................................................................................................................... 30
Corporate social responsibility ..................................................................................................................... 31
Introduction: corporate social responsibility .................................................................................................... 31
Ethics and Social Responsibility ........................................................................................................................ 32
Models of CSR .................................................................................................................................................. 33
Exploring Enlightened Self-Interest .................................................................................................................. 36
1
, Conclusion ........................................................................................................................................................ 37
Decision-Making Model Revisited II ................................................................................................................. 38
Corporate Social Responsibility ........................................................................................................................ 38
Ethical Decision Making: Technology and Privacy in the Workplace ............................................................. 39
introduction...................................................................................................................................................... 40
The right to privacy .......................................................................................................................................... 40
Linking Privacy to the Ethical Use of Technology ............................................................................................. 43
Managing Employees Through Monitoring ..................................................................................................... 44
Other Forms of Monitoring .............................................................................................................................. 46
Regulation of Off-Work Acts ............................................................................................................................ 48
Ethics and marketing ................................................................................................................................... 49
Introduction ..................................................................................................................................................... 49
Marketing: an ethical framework .................................................................................................................... 50
Responsibility for Products: Safety and Liability .............................................................................................. 51
Contractual Standards for Product Safety........................................................................................................ 51
Tort Standards for Product Safety .................................................................................................................... 51
Strict Product Liability ...................................................................................................................................... 52
Ethical Debates on Product Liability ................................................................................................................. 53
Responsibility for Products: Advertising and Sales ........................................................................................... 54
Ethical Issues in Advertising ............................................................................................................................. 54
Marketing Ethics and Consumer Autonomy..................................................................................................... 55
Marketing to Vulnerable Populations .............................................................................................................. 56
Supply Chain Responsibility .............................................................................................................................. 57
Business and environmental sustainability .................................................................................................. 58
Introduction ..................................................................................................................................................... 59
Business Ethics and Environmental Values ...................................................................................................... 60
Business’ Environmental responsibility ............................................................................................................ 61
The “Business Case” for a Sustainable Economy .............................................................................................. 64
Principles for a Sustainable Business................................................................................................................ 65
Sustainable Marketing ..................................................................................................................................... 66
Decision-Making Model Revisited III ................................................................................................................ 67
2
,ETHICS AND BUSINESS
Opening decision point
Zika Virus and Olympic Sponsors (HDM, 2-3)
- How much responsibility do sponsoring corporations bear for the outcomes of
things like the Olympic Games? All the sponsors are doing is paying money to have
their logos featured at Olympic venues and the right to use the Olympic logo in their
advertising. The Rio sponsors wouldn’t be directly spreading Zika. Does that
indirectness matter, ethically?
- One danger is that the decision would not be based on ethics at all, and that the
organizations involved would fall prey to a general “the Olympics must go on!”
attitude (= a “can-do” attitude, Challenger 1986)
o A similar attitude was used at NASA during a space shuttle launch where they
discovered problems before launch and believed they could solve this on the
way, in the end the space shuttle exploded and 7 people died è no ethics
used in the decision making process (based decision on the “can-do” attitude)
- Does the lack of full agreement between experts absolve Olympic sponsors of
blame if the Rio Olympics ended up contributing to the spread of the Zika virus?
Would it be ethically correct of the sponsors to say, after the fact, “We didn’t know for
sure there would be a problem”?
è Should be able to answer these questions
MAKING THE CASE FOR BUSINESS ETHICS
- Business ethics = a process of responsible decision making.
o Many scandals are brought about by ethical failures.
o Homework: familiarize yourself with the following cases and check what went
wrong: Enron/Arthur Andersen, Madoff, BP Deep Water Horizon, Volkswagen
- This text provides a decision-making model that can help avoid future ethical failures.
- As an introduction to this model, this chapter reflects on the intersection of ethics and
business (e.g. the Adam Smith problem).
o Adam Smith wrote a business like economic handbook about selfishness and
egoism, while he also claims that we are ethical, caring, and sympathic (how
to combine harsh economic handbook with ethical handbook?)
- There has been a shift from whether ethics should play a role in business decisions
to how to most effectively do so.
o Which values and principles should guide business decisions.
o Origins of this shift: the serious consequences of unethical behavior for many
people and organisations (e.g. Madoff)
- Responsible decision making must move beyond concern for stockholders to
consider the impact on all stakeholders.
o Anyone who affects or is affected by decisions made within the firm, for better
or worse.
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, MAKING THE CASE FOR BUSINESS ETHICS
- The case for (studying) Business Ethics
o Unethical behavior might affect a wide range of people including ourselves
(as managers involved, or as employees, consumers, citizens, …).
o ‘Bad’ companies can lose in the marketplace (e.g. customer boycotts) or
even go out of business and employees might end up in jail.
o ‘Good’ companies might create an ethical competitive advantage through a
good reputation, attracting and holding good employees, values like trust …
o As future managers/leaders we will have to manage the ethical behavior of
others and will be seen as role models (e.g. Prince Bandar Bin Sultan, AIG).
MAKING THE CASE FOR BUSINESS ETHICS
Summary (reasons for studying business ethics)
- Legal requirements.
- Unethical behavior creates legal, financial and marketing risks.
- Maintaining an ethical advantage aids success.
- Ethical reputations provide a competitive edge.
- Ethical management may aid organizational structure and efficiency.
- For business students, ethics is an important field of study.
- Leaders need to know how to manage ethical behavior of others.
- Business must take ethics into account and integrate ethics into its organizational
structure (mainstream ethics, CSR and sustainability within an organization)
- But what is ethics? (= “the new competitive environment” – P. Robinson, refers to
positive motivation for business ethics)
BUSINESS ETHICS AS ETHICAL DECISION
- Our approach to business ethics focuses on ethical decision making, not just on
information and knowledge about ethics.
- The authors’ fundamental assumption is that a process of rational decision making
can and will result in behavior that is more reasonable, accountable, and ethical.
o Studying ethics does not mean you will behave more ethical, but this is the
hope
- Ethics = refers to how human beings should properly live their lives
- Even if an ethics course does not change your capacity to think, we believe that it
could stimulate your choices of what to think about.
- Caution: no manipulation (influence someone’s behavior) but reasoning to attempt to
produce more ethical behavior among the students who enroll.
- Influencing, manipulation, threats, guilt, pressure, bullying, intimidation, … do not
belong in an ethical classroom. Persuading through reasoning however does!
- Our role [as teachers] should not be to preach our own ethical beliefs to a passive
audience, but instead to treat students as active learners and to engage them in an
active process of thinking, questioning, and deliberating.
- Teaching ethics must challenge students to think for themselves!
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