Chapter 2
Business Ethics
and Social
Responsibility

cc licensed ( BY NC ND ) flickr photo by Stephen Wu: http://flic.kr/p...
cc licensed ( BY ) flickr photo by Robert Couse-Baker: http://flic.kr/p/dBYAqq
Ford Pinto
• Developed by Ford in response to
popularity of small imports

• Developed in 25 months (usually 43)
• Limits ...
Ford Pinto
• 40 crash tests >25mph: all ruptured fuel
tank without modification
• Ford owned a patent on a safer fuel tank...
Ethics: How do we know what is
right?
•
•
•
•

Outcome-based: Utilitarianism
Duty/responsibility-based: Deontology
Categor...
Stakeholders
•
•
•
•
•

Customers
Suppliers
Employees
Investors/owners
Society
Duties/Responsibilities?

• Customers?
– Safe products
– Accurate information
• Suppliers?
– Honesty
– Payment
• Investors...
externalities

http://en.wikipedia.org/wiki/User:Mikm
conflict of interest
Generally: when someone is involved in
multiple interests, one of which could
possibly corrupt the mo...
ethical fallacies
cc licensed ( BY NC SA ) flickr photo by Avi: http://flic.kr/p/6KT6aR
If I don't do it, someone else
will.
cc licensed ( BY NC ) flickr photo by Brook Ward: http://flic.kr/p/dW4c2G
I have a duty to my family.
Entitled to own opinion but not
own facts
• Use the facts given in the case
• Do not change facts to suit your
conclusion
...
Holland Hardware Case
1. What decision does Matt have to make?
2. Who are the stakeholders?
3. Do their interests conflict...
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Chapter 02: Business ethics

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Class slides for BUS 263, Jan. 16, 2014.

Published in: Education, Technology, Business
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Chapter 02: Business ethics

  1. 1. Chapter 2 Business Ethics and Social Responsibility cc licensed ( BY NC ND ) flickr photo by Stephen Wu: http://flic.kr/p/tZ1LP
  2. 2. cc licensed ( BY ) flickr photo by Robert Couse-Baker: http://flic.kr/p/dBYAqq
  3. 3. Ford Pinto • Developed by Ford in response to popularity of small imports • Developed in 25 months (usually 43) • Limits of 2,000 – <2,000 lbs – <$2,000.00 VW Beetle, ©carblueprints.info
  4. 4. Ford Pinto • 40 crash tests >25mph: all ruptured fuel tank without modification • Ford owned a patent on a safer fuel tank design • Cost-benefit analysis: – Life = $200,000 – Cost of modification = $11 – 180 deaths/180 burn injuries: $49.5M – 11M cars, 1.5M trucks: $137M
  5. 5. Ethics: How do we know what is right? • • • • Outcome-based: Utilitarianism Duty/responsibility-based: Deontology Categorical Imperative Religion: The Golden Rule
  6. 6. Stakeholders • • • • • Customers Suppliers Employees Investors/owners Society
  7. 7. Duties/Responsibilities? • Customers? – Safe products – Accurate information • Suppliers? – Honesty – Payment • Investors? – Disclosure – Profit • Employees? – Equal treatment – Safety • Society? – Externalities
  8. 8. externalities http://en.wikipedia.org/wiki/User:Mikm
  9. 9. conflict of interest Generally: when someone is involved in multiple interests, one of which could possibly corrupt the motivation for an act in the other Specifically: any situation in which someone is in a position to exploit a professional or official capacity in some way for their personal benefit en.wikipedia.org/wiki/Conflict_of_interest
  10. 10. ethical fallacies
  11. 11. cc licensed ( BY NC SA ) flickr photo by Avi: http://flic.kr/p/6KT6aR
  12. 12. If I don't do it, someone else will.
  13. 13. cc licensed ( BY NC ) flickr photo by Brook Ward: http://flic.kr/p/dW4c2G
  14. 14. I have a duty to my family.
  15. 15. Entitled to own opinion but not own facts • Use the facts given in the case • Do not change facts to suit your conclusion • Conclusion must follow from facts
  16. 16. Holland Hardware Case 1. What decision does Matt have to make? 2. Who are the stakeholders? 3. Do their interests conflict? 4. What externalities are involved? 5. What duties does Matt have? 6. Does Matt have a conflict of interest? 7. What is it? 8. What system of ethical reasoning should Matt use? 9. Why? 10. What decision should Matt make, and why?
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