Unit 1- Ethics in the world of business Flashcards
What is Ethics
Refer to rules provided by an external source on wring and wrong
What are Morals?
Refer to an individual’s own principles regarding right and wrong.
What are the distinguishing features of a Business?
- Economic Characteristics
2. It operates in an organization
What are the three levels of Decision Making?
- Individual Level
- Organizational Level
- Business System-Level- Problems are a result of business practices/features of an economic system that cannot be solved by an individual or 1 organization
What is Ethical Displacement
Addressing a problem on a level other than the one on which the problem appears.
Factors influencing the Ethical Behavior
Legal Interpretations: In secular societies, legal interpretations are based upon contemporary values and standards according to time, country or situation.
Organizational Factors: The organization too can affect or influence participant’s behaviour based on the degree of commitment of the organization’s leader conduct
Individual Factors: Individuals come to work with different values based on personal values and morals, family influences, peer influence and life experiences.
Complete the phrase: Businesses are……
Organized primarily to provide goods and services, as well as jobs
Relationship of Ethics and Economics
- Adam Smiths argument of the ethics of pursuing self-interest in business
a. Ethics seek to provide justice and good to others, economics seeks to serve self-interest which will then provide well for others. - In turn, ethical factors affect economic activity- Businesses will stay clear of making unethical choices because it will affect them in the market place
- Both seek to make the best choice for others, doing what’s fair, maximizing utility
Relation of Law To Ethics
They are not the same and do not overlap in ALL situations; some things that are unethical may be legal, and things that are illegal may be seen as ethical
What are the 2 schools of Thought that support using the law alone for Ethical Decision Making?
- Law is for business practice, whilst ethics govern private life
- Law embodies the ethics of business. - Ethical rules have been enacted by legislators into laws (hence the “if it’s legal, it’s ok” idea)
Why is there a conflict between ethics and law?
Legislators and judges bring their own personal opinions on ethics to the lawmaking process.
As a result, ethics and law will sometimes conflict. Which means that Legal behavior is not necessarily ethical behavior.
What are 4 reasons for which the Law is Not Enough
- Inappropriate for regulating certain aspects of business activity
E.g. Toys R Us issue (a law for every single aspect would be strenuous/foolish) - Slow to develop in new areas of concern and often unsettled
- Employs moral concepts that are not precisely defined(goodwill/faith, due care etc).
- Approval the legal department does not always assure a successful legal resolution.
E.g. Companies have prevailed in court then suffered adverse consequences in the marketplace
What is Ethical Management?
Acting ethically as a manager by doing the right thing
What is Management of Ethics?
Acting effectively in situations that have an ethical aspect
Ethical dilemmas for top managers are due to conflicts between which three main roles?
Managers as economic actors- contribute to efficiency and sustaining profit
Managers as company leaders- Manage assets, satisfy internal and external stakeholders
Managers as community leaders- Top managers in top companies have the power to influence the community
What are the 3 Definitions for Morality
Descriptive- are based on what society says is moral
Normative/universal- should be used by all rational beings
Synonymous with ethics- similar in meaning
Morality concerns a set of shared rules, principles, and duties that:
- Independent of religion
- Applicable to all in a group or society
- Has no reference to the will or power of one individual
What are the 4 considerations to take in Moral decision Making?
- Facts surrounding the situations
- Taking into account the interests of all parties involved
- Taking into account the moral principles involved
- Take into account how the decisions will affect others.
Distinguish between Primary and Secondary Principles
Primary – general; everyone knows them
Secondary – more specific issues
Moral Decision Making Helps us to
- Perceive moral principles
- Use reason to determine the best way to achieve the highest moral good
- Make rational calculations of the consequences of our actions
- Distinguish between Primary and Secondary Principles
What are the 3 things Morality and the Law are used to do?
- Serve the purpose of keeping society stable and secure
- Used in making judgments about people’s actions
- Judgments are justifiable by reason of Morality and Law
Morality and Law are involved in processes that occur in law, hence, Complete the statement: “Morality and the Law are involved in….”
- The process of making codes and laws
- Enforcement
- Nature of punishment
- Conflict resolution
- Types of judgement
Factors that affect Individual decision Making?
Lack of strong guidance
Biases
Heuristics
What are Heuristics?
Ignoring parts of info, with goal of faster decision making.
E.g.- Representativeness heuristic- Tendency to use recent and vivid examples rather than statistical data. - word of mouth on a car, rather than car facts online
Availability Heuristic- Tendency to make decisions based on info on hand, rather than seeking new sources.
What are the Features that contribute to mistakes in decision making
- Making decisions over time and not at once
- Multiple decisions lead to an unstoppable course of action
- Diffusion of information
- Fragmentation of responsibility
