Module 4 Flashcards
accepted principles of right or wrong that govern the conduct of a person, the members of a profession, or the actions of an organization
ethics
is a strategy, or course of action, that does not violate these accepted principles
ethical strategy
refers to the idea that business people should take the social benefits into account when making business decisions, and that there should be a belief in decisions that have both good economic and good social benefits.
social responsibility
the roots of unethical behavior
-personal ethics
-decision making processes
-organizational culture
-leadership
-unrealistic performance expectations
Business ethics reflect personal ethics (the generally accepted principles of right and wrong leading the conduct of individuals). Managers may face pressure to violate their personal ethics because they are away from their ordinary social context and supporting culture, and they are psychologically and geographically distant from the parent company
personal ethics
Studies show that business people may behave unethically because they fail to ask the relevant question—is this decision or action ethical? – Decisions are made based on economic logic, without consideration for ethics.
decision making processes
Unethical behavior may exist in firms with an organization culture (the values and standards that are shared among employees of an organization) that does not stress business ethics. – Values and standards shape the culture of a firm, and that culture influences decision making.
organizational culture
If a firm’s leaders fail to act in an ethical manner, other employees may not act ethically – Actions speak louder than words
leadership
Pressure from the parent company to meet performance goals that are unrealistic, and can only be achieved by acting in an unethical manner which causes unethical behavior.
unrealistic performance expectations
ensures awareness and concern for the future and for the right way of action in each particular situation.
ethical behavior
The most common ethical issues in business involve
-employment practices
-human rights
-environmental regulations
-corruption
-the moral obligation of multinational companies
If work conditions in a host nation are clearly inferior to those in a multinational’s home nation, should companies apply: - Home country standards - Host country standards - Something in between
employment practices
Ethical issues arise when environmental regulations in host nations are far inferior to those in the home nation. Environmental questions take on added importance because some parts of the environment are a public good that no one owns, but anyone can despoil. The tragedy of the commons occurs when a resource held in common by all, but owned by no one, is overused by individuals, resulting in its degradation.
environmental pollution
refers to the idea that business people should take the social consequences of economic actions into account when making business decisions, and that there should be a presumption in favor of decisions that have both good economic and good social consequences .
social responsibility
Social responsibility refers to the idea that business people should take the social consequences of economic actions into account when making business decisions, and that there should be a presumption in favor of decisions that have both good economic and good social consequences . People argue that businesses need to recognize their noblesse oblige and give something back to the societies that have made their success possible. BP supports this notion, and has made it company policy to give back to the community. For example, in Algeria the company built two desalination plants to provide drinking water to residents in Salah.
moral obligations
Managers often face situations where the appropriate course of action is not clear Situations in which none of the available alternatives seems ethically acceptable They exist because real world decisions are complex, difficult to frame, and involve various consequences that are difficult to quantify.
ethical dilemmas
suggests that the only social responsibility of business is to increase profits, so long as the company stays within the rules of law.
Friedman doctrine
argues that ethics are culturally determined and that firms should adopt the ethics of the cultures in which they operate, or in other words, “when in Rome, do as the Romans do”.
cultural relativism
claims that a multinational’s home country standards of ethics should be followed in foreign countries.
righteous moralist
asserts that if a manager of a multinational sees that firms from other nations are not following ethical norms in a host nation, that manager should not either .
naïve immoralist
are based on the philosophy of Immanuel Kant who argued that people should be treated as ends and never purely as means to the ends of others. People have dignity and need to be respected, they are not machines.
Kantian Ethics
approaches to ethics hold that the moral worth of actions or practices is determined by their consequences. Actions are desirable if they lead to the best possible balance of good consequences over bad consequences Problems with this ethics include measuring the benefits, costs, and risks of an action, and the fact that the approach fails to consider justice
Utilitarian Approach
recognize that human beings have fundamental rights and privileges which transcend national boundaries and cultures . It establishes a minimum level of morally acceptable behavior.
rights theories
focus on the attainment of a just distribution of economic goods and services. A just distribution is one that is considered fair and equitable. One theory of justice that is particularly important was proposed by John Rawls who argued that all economic goods and services should be distributed equally except when an unequal distribution would work to everyone’s advantage.
justice theories
