Lecture1 Business Ethics Unit 1 Introduction- Business Ethics
Business Ethics misbahuddin azzuhri. Ethical Issues & Dilemmas in Business Business Ethics.
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Transcript of Business Ethics misbahuddin azzuhri. Ethical Issues & Dilemmas in Business Business Ethics.
Business Ethicsmisbahuddin azzuhri
Ethical Issues & Dilemmasin Business
Business Ethics
Justice as an Objective• Distributive justice-an evaluation of the
outcomes or results of a business relationship
• Procedural justice-based on the processes and activities that produce the outcomes or results
• Interactional justice-based on an evaluation of the communication processes used in business relationships (often based on the accuracy of information provided)
Ethical Issues are...• problems, situations, or
opportunities requiring an individual to choose among actions that may be evaluated as right or wrong, ethical or unethical
• ethical issues arise because of:– conflict among
personal/organizational values– conflicts with societal values
What do you see as some of the causes of unethical behavior?
Influences on Ethical Behavior...• personal values• attitudes/behaviors of supervisor• attitudes/behaviors of senior
management• internal drive to succeed• performance pressures• no threat of punishment• friends/coworkers
Causes of Unethical Behavior...• meeting overly aggressive
financial or business objectives• meeting schedule pressures• helping the organization survive• rationalizing that others do it• resisting competitive threats• saving jobs
Classification of Ethical Issues...• conflict of interest• honesty & fairness• communications issues• organizational relationships
Conflict of Interest...• exists when an individual must
choose whether to advance his or her own personal interests, those of the organization, or some other group
• must be able to separate personal interests from business dealings
• bribery is a significant concern
Honesty & Fairness• honesty relates to truthfulness,
integrity & trustworthiness• fairness related to being just,
equitable & impartial• breaking or bending laws violates
trust• business should not be played as
a “game”• lack of rules & poor enforcement
leads to unethical behavior
Communications...• issues involved relate to
advertising, product safety, pollution, & employee work conditions
• lying is a major ethical issue with internal & external communications
• false advertising relates to:– exaggerated claims– concealed facts & ambiguous
statements– lying
Organizational Relationships...• relate to behavior of organizational
members toward customers, suppliers, subordinates, superiors, peers & others
• plagiarism is one ethical issue of concern to organizations
Ethical Issues Related to Ownership...• owners have an obligation to
society as well as their employees & customers– minimize pollution– compensate workers fairly– produce safe products
• must be sensitive to legal & ethical risks of their industry & region
Financial Responsibilities...• reporting & use of the
companies finances• pricing products/services
fairly• avoiding any antitrust
activities– price fixing
• sensitivity to socially responsible investing
Employees & Management Concerns...• employee theft, sabotage &
competitive intelligence• fear of layoffs• salary plateaus• upward mobility • discrimination• privacy & data access• health & safety
Consumer & Marketing Issues...• Must consider consumer
feedback– safety– environmental (can lead to
boycotts)– maximize positive publicity &
avoid negative
Ethical Dilemmas
Ethical Responsi
bility
Legal Responsibility
Economic
Responsibility
132b
2a
Venn Diagram for Ethical Decision Making• Area 3: Legal and ethical, but not profitable. Find ways to seek profitability
• Area 2a: Profitable and legal. Proceed cautiously
• Area 2b: Profitable and ethical. Probably legal too. Proceed cautiously
• Area 1: Profitable, legal, ethical. Go for it!
That’s AllMisbahuddin Azzuhri
Case Discussion• Case 1: Wal-Mart: The Challenge of
Managing Relationships with Stakeholders
• After Class Discussion please submit the results according to your group opinion