Ethics, Law, Business
I. Ethics and Values
- Why Study Ethics?
- What is Ethics?
- Value Systems and Moral Beliefs
- 6 Influences That Shape Value System
- Values in Conflict
A. Why Study Ethics?
The primary goal of American business is to make a profit and our laws influence the daily activities of business.
Does this mean that whatever activities the business engages in are acceptable as long as the activities pursue profit and are legal?
B. What is Ethics?
ETHICS is the process by which we make decisions, the value system we apply when making moral choices, and the inherent rightness or wrongness of those decisions?
ETHICS and MORALITY are NOT the same
- Ethics – philosophical, rational basis for fair and honest conduct
- Morals – are more universal guidelines that determine action or character
C. Value Systems & Moral Beliefs
Everyone’s moral beliefs and value system start to form early in life based on observations of others
Individuals bring their own value systems and moral beliefs into the workplace to make decisions about what is right and wrong
D. Six Influences That
Shape the Value System
Family (greatest influence)
Proximity (peer) groups
Media / Social Media
E. Values in Conflict
Our values often come into conflict with one another
When conflict arises, the values compete to form a structured system for making future decisions
In a workplace setting, values in conflict, may make relationships uncomfortable or even hostile
II. Ethical Theories
- Social Contract
An EGOIST believes that people should act only in their own self interest
Me, me, me
B. Consequential Approach
A CONSEQUENTIALIST believes that the rightness or wrongness of an action depends on its consequences
- Utilitarianism – the greatest good for the great number
C. Deontological Approach
“Do unto others as you would have done unto you.”
- Immanuel Kant – “Do unto others as you would have them do unto everyone.”
- Prima Facie Duty – moral rules that bind us unless they conflict with other more compelling prima facie duties.
- Rights Theory – a mixed deontological theory emphasizing rights rather than duties
D. Social Contract Theory
A SOCIAL CONTRACT is an unwritten agreement establishing certain standards of behavior and rights among members of society.
Governments rely on social contracts to avoid anarchy.
Relativist – “ When in Rome, do as the Romans do.”
Libertarians – emphasize individual freedom based on property rights and a minimal role for government.
III. Business Decision Making
- Profit Maximizing
- Ethics and the Law
- Ethical Decision Making
A. Profit Maximizing
Is it profitable?
Businesses will cease to exist without profit
The desire to maximize profit can be a powerful influence on a person’s decision resolving an ethical dilemma
B. Ethics and the Law
Is it Legal?
Obeying the letter of the law is the minimum standard of behavior we expect from business
Anti-trust laws and environmental protection legislation are examples of ways in which the law imposes rules for corporations to follow
C. Ethical Decision Making
Is it ethical?
Ethical decisions may arise in business because of the conflict to maximize profits and the welfare of those affected by that goal
7 General Rules:
- Honor confidentiality
- Avoid conflict of interest
- Obey the law
- Exercise due care
- Act in good faith
- Respect the liberty and rights of others
- Respect human well-being
IV. Balancing Corporate Responsibility
- Optimizing Profits
- Steps to Solving Ethical Dilemmas
A. Optimizing Profits
Optimizing profits involves making profits while at the same time staying within legal and ethical limits
Codes of Ethics
B. Steps to Solving
8 Decision-Making Steps
Determine the true facts
Establish the major issues
Determine the options available
Are the options legal?
Determine how each option would look in the light of day
Does the option violate company policy? Or company code of ethics?
How does the option fit under utilitarianism?