Ethics

Ethics is more than legality

Ethics

• Standards of moral behavior; behavior that is accepted by society as right versus wrong.

Ethics begins wit each of us

• It is helpful to ask yourself the following questions when facing an ethical dilemma.

o It is legal?

o It is balanced? Am I acting fairly? Would I want to be treated this way?

o How will it make me feel about myself? Would I feel proud if my family learned of my decision? My friends?

Managing Businesses Ethically and Responsibly

• People learn their standards and values from observing what others do, not from hearing what they say.

• A business should be managed ethically for many reasons:

o to maintain a good reputation

o to keep existing customers

o to attract new customers

o to avoid lawsuits

o to reduce employee turnover

o to avoid government intervention

o to please customers, employees, and society

o simply to do the right thing

• Ethic of justice is based on principles like justice, fairness, equality, or authority.

• Ethic of care is based on a sense of responsibility to reduce actual harm or suffering.

Setting Corporate Ethical Standards

Compliance-based ethic codes

• Ethical standards that emphasize preventing unlawful behavior by increasing control and by penalizing wrongdoers.

Integrity-based ethic codes

• Ethical standards that define the organization’s guiding values, create an environment that supports ethically sound behavior, and stress a shared accountability among employees.

Whistleblowers

• People who report illegal or unethical behavior.

• The following six-step process can help to improve business ethics:

o Top management must adopt and support an explicit corporate code of conduct

o Employees must understand that ethical behavior begins at the top, and that they are expected to act accordingly

o Managers and others must be trained to consider ethical implications of all business decisions

o Ethics