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  • 1. Common Ethical Dilemmas What, Why, and How You Can Do Between Ethics and the Individual 個人在社會倫理道德領域中的矛盾與責任
  • 2. Summary • i t t 孟母三遷 (Mencius'' mother, th Chinese ancient story:孟母三遷 (M Chi i th three moves) refers t ) f to the legend that Mencius' mother moved their house three times—from beside a cemetery, marketplace, to finally beside a school—before finding a location that she felt was suitable for his upbringing. As an expression, it as s itable pbringing e pression refers to the importance of a proper environment for the proper upbringing of children. • Especially, a person’s b h i i a b i E i ll ’ behavior in business world will b strongly ld ill be t l influenced by the environment outside and inside (SWOT Analysis). Environment is the ecology of ethics. • Why be hi l? Why bother? Who Wh b ethical? Wh b h ? Wh cares? A individuals we must care ? As i di id l about ethics, because most of us prefer to work for ethical organizations, what’s more, ethics is really an valuable assets for business organizations. • Corporate culture is the soul of business ethics; whereas, the code of conduct is the core value of ethics. It plays the role of
  • 3. Outline • The Objectives of Business: Profit Maximization; Alternatives to Profit Maximization; Is Th I There a Single, A Si l Appropriate Obj ti F i t Objective Function? ti ? • Ethics Value In The Business: Why Be Ethical? Wh B th ? A d Wh Cares? Wh B Ethi l? Why Bother? And Who C ? • An Individual in Business Ethics: Common Ethi l Problems, and Individual’s Dil C Ethical P bl d I di id l’ Dilemmas and What Could be The Solutions and Decisions? • Good Examples and Models: Ethical Applications in The Real Business.
  • 4. Learning Objectives • U d t d the various objectives th t Understand th i bj ti that businesses as a business entity and Individual as a employee my pursue and reflect on which pursue, objects are most important to them. • Understand the legal and social limitations on business objectives and how these limitations affect their decisions. decisions • Assess how their corporation’s culture and code of conduct supports or inhibits its stated mission and ethical philosophy.
  • 5. • More C M Countries B Chi t i Ban Chinese P d t A id Milk S Products Amid Scandal d l • China's recent troubles with contaminated milk are prompting more skepticism in other countries about its quality control, despite authorities' efforts to contain the crisis. • A Chinese dairy factory worker monitors the production at a plant in Wuhan, central China. • Countries stepped up testing of foods imported from China after Chinese authorities disclosed that the industrial chemical melamine had tainted products -- including liquid milk, yogurt and candy -- made by 22 companies. Baby formula contaminated by melamine has killed at least three babies and sickened more than 50,000. Taiwan and Indonesia have now joined the list of at least 12 regions that have banned Chinese-made dairy p j g y products. • New Zealand's Food Safety Authority warned the public on Wednesday that quot;unacceptablequot; amounts of melamine were found in a popular Chinese candy called quot;White Rabbit Creamy Candies.quot; British supermarket chain Tesco PLC said it recalled the candy as a precautionary measure from its stores in the U.K., China and Malaysia. • U.S. U S and European consumer-safety officials said the crisis highlights the need for better enforcement of public-safety standards at all stages of manufacturing. quot;You have to know what's coming into your factory and what's going out of your factory,quot; said Nancy Nord, acting head of the U.S. Consumer Product Safety Commission. • Wall Street Journal SEPTEMBER 25, 2008
  • 6. Lehman Brothers In Not New The Only Difference is the Term • I 1920s, there was Charles Ponzi’s “ In 1920 th Ch l P i’ “postal coupon t l scam”; • 1970s reappeared as Robert Vesco’s “mutual funds 1970s, Vesco s mutual scam”; • 1980s, with Charles Keating and the “multiple-book g p accounting scam”; Ivan Boesky and Michael Milken’s “insider trading”; • 1990s leveled as Martha Stewart s “doyenne of 1990s, Stewart’s doyenne domesticity”; • Obviously and painfully, this theme of mistakes of the past reiterated in the present is dramatically portrayed in Enron, WorldCom, Tyco, and a lot of other corporations.
  • 7. Environment: An Ecology o Ethics o e co ogy of cs 環境是影響人類道德趨向的生態學 • A 孟母三遷(M As 孟母三遷(Mencius'' mother, th i th three moves) th ) the same affection could be referred to the importance of a proper environment for the proper upbringing of ethical behavior. • The world is a village no one live in vacuum village, vacuum. This is the same true for the corporations, it also the members of society needing to play a society, positive role in the business and real world.
  • 8. The Motivation to Be Ethical • Classical economists such as Ad Cl i l i h Adam S i h assume that practically Smith h i ll all human behavior is motivated solely by self-interest (Invisible hand)—that humans are purely rational economical actors who make choices solely on the basic of cold cost/benefit analysis. • Etzioni, in his book “ The Moral Dimension”, cites many more examples and research evidence to document his claim that human action has two distinct sources: the pursuit of pleasure or self- interest, and moral commitments. • A Accordingly, most h di l t human d i i decisions are bbased on d 1.ethical and emotional considerations 2.as 2 as well as rational economic self-interest self interest. They are motivated by both economic and moral concerns.
  • 9. KY Lee Is Not YT Wang ee s o a g 李焜耀不是王又曾 • 2007年5月17日 • 李焜耀曾說品牌是他最大的冒險。 李焜耀曾說品牌是他最大的冒險 如今,這句話聽來更加諷刺,因為 這場冒險還看不到終點,卻已轉成 了他個人與明基有史以來最大的危 機。為何圓品牌夢,會讓明基捲入 機 為何圓品牌夢 會讓明基捲入 內線交易案? • 一位曾經登上Forbes雜誌全球版封 面、被美國Business Week列入 「電子業名人堂」、目前掌管集團 (友達、明基)四千億市值的台灣 企業家,為何現在因為涉嫌內線交 易被檢方起訴? Source: Business Weekly 2007.05.21, A special report concerning KY Lee when he was speculated insider trade. Reputation is respecting worthy.
  • 10. Jack Welch CEO General Electric Welch, Jack Welch’s lessons for success, Fortune, January 25, 1993:86-93 • Every organization needs E i ti d values….Values are what enable people to guide themselves through thro gh that kind of change… change • Trust is enormously powerful in a corporation. People won’t do their best l b t unless th b li they believe th ’ll b they’ll be treated fairly. • The only way I know to create that kind f ki d of trust i b l i out your is by laying values and then walking the talk. • 道德VS道得: 儒商新 學
  • 11. The Value of Corporate Ethics • An outstanding in-depth article on the can be found in an article by Reggie in depth Van Lee, Lisa Fabish, and Nancy McGaw in this month's S+B. Based on a survey at 365 companies in 30 countries, the authors claim quot;quot;. The highlights of the survey and article are: • A large number of companies are making their values explicit. That’s . The ramifications of this shift are just beginning to be understood. j g g • Ethical behavior is a core component of company activities. • Most companies believe values influence two important strategic areas — relationships and reputation — but do not see the direct link to growth. • Most companies are not measuring their “ROV ” M i i h i “ROV.” • Top performers consciously connect values and operations. • Values practices vary significantly by (continental) region. • The CEO’ tone really matters. Th CEO’s t ll tt
  • 12. Politic, Economic, and Social Balance It’s A New Time Come Make profits under acceptable profitability Government Economic Vibration The government 法律政策 can’t cure the souls 經濟規律 自利自愛 Law & Policy Economic-oriented co o c o e ted Legal-oriented Legal oriented Invisible Hand Supposed to operate under market ethics— each party pursues interest vigorously and h t i t t i l d intelligently, and the invisible hand makes Social Code sure everyone does better in the long run. Everyone 社會規範 will ill oblige to 基礎: 公平正義 be a >恩惠義務 good apple Moral-oriented
  • 13. An Ethics Survey 2005 • Di Discusses what’s d i i b i h t’ driving business ethics t d ? thi today? • Describes What’s today’s state-of-the-art business ethics practices? b i thi ti ? • Forecasts what will drive business ethics over the th next 10 years? t ? • Discusses what the best-in-class practices may look lik i the l k like in th year 2015? Source: American Management Association/Human Resource Institute 2005 study.
  • 14. Do You Know ? o ou o Why People Compromise Ethical Standards • Did you know that ? k th t • the number one factor most likely to cause people to compromise ethical standards is is, quot;pressure to meet unrealistic business objectives/deadlines. objectives/deadlines.quot; • The second answer was, quot;a desire to further one's careerquot; a one s career • and number three, quot;desire to protect one's livelihood.quot; desire one s livelihood. This information comes from a global study made by the American Management Association.
  • 15. Ethics Global Study 2005 y What Wh exactly are the reasons l h behind the rise in corporate unethical behavior? • According to American Management’s study, the number 1 answer from the 1,100 respondents to the question, • Factors Most Likely to Cause People to Compromise Ethical Standards was Pressure to meet unrealistic business objectives/deadlines. • Considering that marketplace competition was cited as a major business driver of ethics today and the respondents believe, to remain a major driver 10 years into the future in addition to the desire to further one’s career and protect one’s livelihood, what can companies do now to p p p protect themselves from future scandals? • Answers to these questions, areas where organizations can draw the line of first defense are found in their ability to 1.make 1 make transparent current business cultures cultures, 2.Leadership support and modeling ethical behavior, training programs (through a Train-the- Trainer Certification Program where individual accountability and a responsibility is tied to promotional opportunities, bonuses/incentives, retention, future assignments and departments which includes new hires straight up to the C Levels and into the Board of Director) new-hires C-Levels Director), 3.the development of an Ombudsman Program with 24/7 anonymous hotline, an enforceable Code of Conduct and ethic audits addressing technology, Corporate Social Responsibility Program are just to name a few.
  • 16. Why Lehman Makes Mistakes? When Unlimited Profit Meet Battling Competition • Lehman B th L h Brothers FFormer R t ti in Taiwan 陳嫦芬 Representative i T i • If the board of directors and top leaders of either Lehman’s Brother, or other organizations still keep the unlimited p g p pursuit of p profit as the only objective; consequently, enforced the management running business with all attention to profit maximization, then the same story will repeat again and again again. • 從最上方的董事會開始都對財務管理有虛幻的期待,若董事長會要求 高業績,下面的小主管也沒有辦法,只好著眼於業績一直衝。 • 金融工具的過受創新若欠缺縝密的監理機制,勢必付出惨痛的代價。
  • 17. Enron’s Wrongdoing g g The ultimate failure of the system Enron I ’t Real but Risk Money E Isn’t R l b t Ri k M had never been profitable under any acceptable definition of “profitability” •The financialization of all things Integrity: Everything rested •Hedge derivatives with derivatives on the reputation •Refer tax division as a profit center Auditing VS Consulting •Sell underperforming assets to improve balance Internal conflicts •Never owned anything that Kept silent to the checks and balances •created real value and make real money created Arthur Andersen Had Profited form its participation The Wall Street Fixation Everybody knows that the market has to be kept happy The only real things Enron had --were sold to raise quarterly earnings The Market need huge funds to grow their assets And that need coincides nicely with the opportunity of insiders To make a huge amount of money by manipulating stock And cashing in options
  • 18. Why King Car Makes Mistakes? y g Limited Equity VS Unlimited Profits • 罪莫大於可欲 禍莫大於不知足;咎莫大於欲得 故知定之 罪莫大於可欲, 禍莫大於不知足;咎莫大於欲得。故知定之 人,常足矣。(老子,四十六章) • 欲而不知止, 失其所以欲; 有而不知足, 失其所以有。(司馬 ( 遷,史記列傳) • 欲無極限,禍亂生焉。(劉昀,唐書志第) • It seems true that greedy misleading is the main reason why lots of corporations’ falling into guile. • Greed as Plato pointed out so long ago is Greed, ago, essentially unlimited. If I am enjoying a comfortable existence now, I immediately see that with more money I could enjoy a l h ih ld j luxurious i existence, and I want it, also immediately.
  • 19. Johnson & Johnson Learning from Tylenol’s Rebound • “It’s easier to turn water into wine than to bring back Tylenol It is dead” An It s Tylenol. dead advertising head said when Tylenol crisis happened in 1982, 7 deaths in Chicago area from the cyanide-laced Exta-Strength Tylenol capsules. • Johnson & Johnson took actions soon in few days: 1.Yanked 1 Yanked millions of bottles of Tylenol off the shelves across the country; 2.Ran newspaper ads 10 days after the tragedy offering to swap Tylenol tablets. 3.Investigated tamper-resistant packaging; to develop marketing strategies to rebuild the brand—coupons for consumers and discounts for retailers—and to employ once the i i th crisis was over. 4.Obtained letter from the Food and Drug Administration stating that the agency was satisfied that there had been no criminal tampering with the product manufactured by Johnson & Johnson. 5.Aired ‘Roadblock” d 5 Ai d ‘R dbl k” ads, and granted access t media, t l t th publics and d t d to di to let the bli d consumers know the whole stories through corporate statement and actions to do. • Tylenol had more than 28.6 % share of the $1.2 billion non-prescription pain relieve market, and over 80 % of it t t l Still after the crisis, competitors made surprisingly small headway in f its total. Still, ft th i i tit d i i l ll h d i grabbling off chucks of its market share by about 1%.
  • 20. Johnson & Johnson Ranks No. 1 in National Corporate Reputation Survey for Seventh Consecutive Year • ROCHESTER, N.Y. December 7, 2005 The Annual RQ 2005 study conducted by Harris Interactive measures the corporate reputations of the most visible companies in the United States. According to this year Reputation survey, for the seventh consecutive year, y , • Johnson & Johnson ranks No. 1 with an RQ score of 80.56. • Coca Cola ranks second (79.69), • Google ranks third, with an RQ score of 79.52. • The study evaluates companies along six key dimensions : 1.corporate reputation: 2.vision and leadership, 3.social responsibility, p y, 4.emotional appeal, 5.products and services, 6.workplace environment and financial performance. • Overall, Overall the study shows that Corporate America reputation has declined slightly since 2004. This year, the majority of U.S. adults (71%) say its reputation is quot;not good/terriblequot; compared to 68% a year ago.
  • 21. There Is An World of Imagination Crested by Mathematicist Edwin Abbott • Line Land 線國: Business is business, profit is all thing, careless of law and moral, if will not be punished. This corporation is called Alpha looking for short term profit. • Flat Land 平面國: While in pursuit of profit, corporation needs to obey the law and rule, but care not too much moral. It called Omega firm such as “The Body Shop” and “ Dow Corning “paying attention to limited social responsibility and g p y g p y middle term profit. • Real Land 真實國: A Company of Character Economic and business are close link with law, moral, and reputation, Corporation Zeta such as ‘Merck” operated in balance. Source: Kevin T. Jackson, Building Reputational Capital: strategies for integrity and fair play that improve the bottom line, 2004. i t it d f i l th t i th b tt li 2004
  • 22. The fundamental findings were: • Ethical behavior is a core component of company activities. Of activities the 89 percent of companies that have a written corporate values statement, 90 percent specify ethical conduct as a principle. Further, 81 percent believe their management p p g practices encourage ethical g behavior among staff. Ethics-related language in formal statements not only sets corporate expectations for employee behavior; it also serves as a shield companies are using in an increasingly complex and global legal and regulatory environment environment. • Most companies believe values influence two important strategic areas — relationships and reputation — but do not see the direct link to growth Of the companies that value growth. commitment to customers, 80 percent believe their principles reinforce such dedication. Substantial majorities also categorize employee retention and recruitment and corporate reputation as both important to their business strategy and strongly affected by b th i t t t th i b i t t d t l ff t d b values. However, few think that these values directly affect earnings and revenue growth.
  • 23. The Findings 2 • Most companies are not measuring their “ROV ” In a business “ROV.” environment increasingly dominated by attention to definable returns on specific investments, most senior executives are surprisingly lax in attempting to q p g quantify a return on values ( y (ROV). Fewer than half ) say they have the ability to measure a direct link to revenue and earnings growth. • Top performers consciously connect values and operations. Companies th t report superior fi C i that t i financial results emphasize such i l lt h i h values as commitment to employees, drive to succeed, and adaptability far more than their peers. They are also more successful in linking values to the way they run their companies: A significantly greater number report that their management practices are effective in fostering values that influence growth, and executives at these companies are more likely to believe that social and environmental responsibility have a positive effect on fi d i t l ibilit h iti ff t financial i l performance.
  • 24. The Findings 3 • Values practices vary significantly by region Asian and region. European companies are more likely than North American firms to emphasize values related to the corporation’s broader role in society, such as social and environmental responsibility. The manner in p y which companies reinforce values and align them with company strategies also varies by region. • The CEO’s tone really matters. Eighty-five percent of the respondents say their companies rely on explicit CEO support t d t th i i l li it t to reinforce values, and 77 percent say such support is one of the “most effective” practices for reinforcing the company’s ability to act on its values It is considered the most effective practice among values. respondents in all regions, industries, and company sizes. (See “Leaders Make Values Visible,” below.)
  • 25. Common Ethical Problems In Individual • H Human R Resources I Issues: Di i i ti Discrimination, Sexual Harassment; • C fli t of Interest: O t bribes or ki kb k Conflicts f I t t Overt b ib kickbacks, Subtle “Bribes”, Influence, Privileged Information; • C t Customer C fid Confidence: C fid ti lit P d t Confidentiality, Product safety, Truth in advertising, Special fiduciary responsibilities; • Use of Corporate Resources: Use of corporate reputation, reputation Corporate financial resources resources, providing honest information.
  • 26. Sexual Harassment • If a man makes a pass at a female colleague, it k t f l ll is not sexual harassment. If he continues, it is. (Letitia Baldrige PR consultant on corporate Baldrige, etiquette, quoted in U.S. News & World Report, 1985) • I am treating an executive now who’s been sued for calling a secretary “honey”. He’s become honey He s functionally paranoid, afraid to talk to people— especially women at work—at all. (Steven p y ( berglas, clinical psychologist, quoted in Fortune, September 8, 1997)
  • 27. What Is code of conduct ? • A set of rules outlining the responsibilities of or proper practices f f l li i h ibili i f i for an individual or organization. Related concepts include ethical codes and honor codes. • quot;Principals, values, standards, or rules of behavior that guide the decisions, procedures and systems of an organization in a way that (a) contributes to the welfare of its key stakeholders stakeholders, and (b) respects the rights of all constituents affected by its operations.“ In its 2007 International Good Practice Guidance, Defining and Developing an Effective Code of Conduct for Organizations, the International Federation of Accountants [1] provided the following working definition:
  • 28. Code of Ethics
  • 29. Create & Evaluate A Code of Ethics and Conduct
  • 30. A Manu for Managing Ethics
  • 31. Dell’s Code of Conduct A Good Model to Learn • Dell s Dell's Higher Standard • Dell's success is built on a foundation of personal and professional integrity. We hold ourselves to standards of ethical behavior that go well beyond legal minimums. We never compromise these standards and we will never ask p any member of the Dell team to do so either. We owe this to our customers, suppliers, shareholders and other stakeholders. And we owe it to ourselves because success without integrity is essentially meaningless. • Our higher standard is at the heart of what we know as the quot;Soul of Dell - Soul Dellquot; the statement of the values and beliefs which define our shared global culture. This culture of performance with integrity unites us as a company that understands and adheres to our company values and to the laws of the countries in which we do business Just as the Soul of Dell articulates our business. values and beliefs, the following Code of Conduct provides guidance to ensure we meet our higher standard and conduct business the Dell Way - the right way, which is quot;Winning with Integrity.quot; Simply put, we want all members of our team along with our shareholders customers suppliers team, shareholders, customers, and other stakeholders, to understand that they can believe what we say and trust what we do
  • 32. Dell’s Code of Conduct A Good Model to Learn • . Our higher standard includes several key characteristics that both underpin the Soul of Dell and provide the foundation for our Code of Conduct: • Trust - Our word is good. We keep our commitments to each other and to our stakeholders. • Integrity - We do the right thing without compromise. We avoid even the compromise appearance of impropriety. • Honesty - What we say is true and forthcoming - not just technically correct. We are open and transparent in our communications with each other and about business performance. performance • Judgment - We think before we act and consider the consequences of our actions. • Respect -We treat people with dignity and value their contributions. We maintain fairness in all relationships. • Courage - W speak up for what is right. We report wrongdoing when we see it. C We k f h t i i ht W t d i h it • Responsibility - We accept the consequences of our actions. We admit our mistakes and quickly correct them. We do not retaliate against those who report violations of law or policy. •
  • 33. What’s Corporation p Legalities is Clear, But Morality is Not Exact • Legally, corporations are” fictitious persons” (Sth Invested or imagined) created by the law and empowered with certain rights and abilities that allow them to be recognized as financial entities; • Capable of carrying on commercial transactions, and as institutional citizens that can be held accountable to regulation and taxation. • In general, the legalities are relatively easy to say;
  • 34. What’s Corporation p Legalities is Clear, But Morality is Not Exact • However the moral issues involved are much less clear However, and exact. • Is a corporation responsible only to its shareholders? p p y • Is financial performance the only measure of corporate success? • Are corporations moral agents in the same sense as individuals? • Can corporation be held morally accountable for their decisions and b h i ? d i i d behavior? • Beyond the strict requirements of the law, what rules, rights, and obligations do corporations share with other stakeholders, that is employees, customers, vendors, and the community and society?.
  • 35. Ethics and The New Management Organization and Business World • Th new business paradigm-people and work: The b i di l d k Work organizations are viewed as communities, and employees are members of these communities communities. Business is no longer just about products and bottom line profits. The words products and profits join with words like meaning and values. values • The new business paradigm-interconnectedness : Organizations are viewed as i t O i ti i d integral parts of an i t l t f interconnected t d world community and ecosystem. It has clearly shifted p y perceptions of social responsibility beyond the p p y y corporation’s front door-to its suppliers and their suppliers both local and abroad.
  • 36. Examples of Interconnectedness • S Sears: W ’t import forced-labor products f Won’t i tf dl b d t from Chi China. • Dow Chemical: Asks its international suppliers to conform to U.S. Standards on pollution and safety that US are frequently tougher than local laws. • Levi Strauss & Co.: Has ditched some suppliers that pp didn’t measure up to its tough conduct standards, and has exacted reforms from many others. • Home Depot: Distributed a questionnaire to its worldwide suppliers, asking whether any factory in the supply chain employs children or p pp y p y prison convicts.
  • 37. A Booz Allen Hamilton/Aspen Institute survey of corporate behavior finds that leading companies are crafting a purpose- driven identity. • The V l Th Value of Corporate fC t Values by Reggie Van Lee, Lisa Fabish, Fabish and Nancy McGaw • Increasingly, companies around the world have adopted formal statements of corporate f l t t t f t values, and senior executives now routinely identify ethical behavior, honesty integrity behavior honesty, integrity, and social concerns as top issues on their companies’ agendas. agendas
  • 38. New Week We Will Discuss • Deciding What’s Right? And How to Deal Between Black and While? • How to Build A Framework to Think and To Manage Business Ethically? g y • From Prescriptive and Psychological Approaches.