BUS 200 Lecture 3: 3- Conducting Business Ethically and Responsibly
8 Dec 2017
School
Department
Course
Professor
Conducting Business Ethically and Responsibly
Midterm June 14:
Chapters 1-5 and the HBR (Leading Change- John Kotter)
Multiple choice and short answer
Ethics- believe of what is right and wrong, good and bad
• Ethical behaviour is behaviour that conforms to individual and social expectations of what is
right and wrong
• Vary from person to person or from situation to situation
Business Ethics- ethic or unethical behaviour of managers or employees of a business
Individual Ethics
Ethics and Legalities
• Ethical and Legal- no issue
• Ethical and Illegal- possible issue
• Unethical and Legal- possible issue
• Unethical and Illegal- huge issue
Ethical Influences
• Moral Intensity- degree to which we need to apply the ethical principles
• Ethical Sensitivity- how we recognize that there is an ethical issue
• Situational- circumstances around us might cause us to act in an unethical way
• Mindless Behaviour- people might not think their actions are unethical
Complications with Ethics
• Many companies do business with companies located in other countries where their laws are
different. This could mean the line of what is legal becomes fuzzy
• Most people would never think of taking a chocolate from a convenience store, but many
people take home office supplies from work for personal use, but is it not essentially the same
thing?
• People can rationalize any situation as ethical if they try hard enough
Managerial Ethics
• Standards of behaviour that guide managers at their work
• Behaviour toward employees
o Hiring and firing should be based solely on a person’s ability to perform the job
▪ Hiring a family friend – unethical in Canada but not so in other countries
o Wages and working conditions
▪ Paying someone less simply for knowing they can’t quit- ethical or unethical?
o Protecting the privacy of employees
• Behaviour towards the organization
o Employee behaviour towards the employer
o Conflict of interest- activity benefits employee at the expense of the employer
• Behaviour towards other economical agents
o A company and its customers, competitors, stockholders, suppliers, dealers and unions
o Price gouging- charging unreasonably high prices
Assessing Ethical Behaviour
• Deciding whether a decision or action is ethical or not, use the Model of Ethical Judgment
Making (does not include the role emotions may play in any situation):
o Gather the relevant factual information
o Determine the most appropriate moral values
o Make an ethical judgement based on the rightness or wrongness of the proposed
activity or policy
• Ethical values
o Utilitarian- optimize for all of those affected
o Rights- respect rights of individuals
o Justice- fairness for all
o Caring- consistent with people’s responsibilities
Encouraging Ethical Behaviour
• Reasons unethical behaviour occurs:
o Pressure- problem has to be solved but cannot be solved legitimately
o Opportunity- employee uses their position in a company to secretly solve the problem
o Rationalization- an ethical person caught up in an unfortunate situation
• Can be avoided by:
o Demonstrating top management commitment to values and high ethical standards
▪ Management must make a serious public commitment to high ethical standards
▪ Strategies and Practices (frequently revised) -> Organizational Objectives
(changed infrequently) -> Core Principles and Organizational Values
(unchanging)
o Written code of ethics
▪ Formally acknowledges that a company intends to do business in an ethical
manner
▪ Many Canadian and American companies are added positions such as “ethics
director”
▪ To be effective: there must be consistent enforcement when unethical
behaviour occurs
o Provide Ethics Training
▪ Keep employees informed on current laws and regulations of ethics
▪ People usually know the difference between right and wrong, but teaching
them how to resist pressure will stop them from making unethical decisions
Corporate Social Responsibility (CSR)
• A business tries to balance commitments to important individuals and groups in its exterior
environment
o Waste disposed of in an environmental manner, treat workers with dignity, pay workers
fairly, emphasizes energy efficiency, minimizes affect of production pollution and audit
suppliers
o Fair trade- workers in developing countries receive fair pay for their work
• Social- creating a good image of the company
• Environment- prevent pollutants from entering environment
Document Summary
Chapters 1-5 and the hbr (leading change- john kotter) Ethics- believe of what is right and wrong, good and bad: ethical behaviour is behaviour that conforms to individual and social expectations of what is right and wrong, vary from person to person or from situation to situation. Business ethics- ethic or unethical behaviour of managers or employees of a business. Ethics and legalities: ethical and legal- no issue, ethical and illegal- possible issue, unethical and legal- possible issue, unethical and illegal- huge issue. Complications with ethics: many companies do business with companies located in other countries where their laws are different. Assessing ethical behaviour: deciding whether a decision or action is ethical or not, use the model of ethical judgment. Ingredients, care instructions, interest being charged: right to be heard, customers can complain, right to choose what they buy, free and open competition among companies.
