02 value and ethics

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02 value and ethics

  1. 1. Value and Ethics Lesson 02
  2. 2. Lesson's Objectives  Define Value & familiar with types of value  Identify the formation of value  Define Ethics  Familiar with the formation of Ethics  Define Business Ethics  Identify the importance of Business Ethics  Identify relationships between ethics and organization
  3. 3. Value  As we knew the firm is determined by its values  Edwerd Spranger define the value as "the constellation of standards, or qualities, characteristics, or ideas that determine a person's view of the world  Those standards/idea, qualities are likes, dislikes, viewpoints, inner inclinational, rational and irrational judgments, prejudices, and association patterns
  4. 4. Value  Value Then values provide the basic foundation for understanding a person’s personality perception and attitudes. Beliefs Perception Attitudes Behavior interest and personality
  5. 5. Importance of Value  A powerful force affecting behavior  Values contain a judgmental element in that they carry an individual's ideas as to what is right or desirable  Provide a way to understand organization  Help to differentiation  Determine the retention
  6. 6. Personal Value  Personal values denote a sense of right or wrong, good or bad, and other judgmental criteria based on our strong sense of what the ideal ought to be  Personal values serve five purposes in organizations  Value serve as standards of behavior  Guidelines for decision making and conflict resolution  Value effect our thought & action  Influence on employee motivation & perception  Influence on attitude and behavior
  7. 7. Formulation of Our Value  40% value is genetically determined  Balance is given by the environmental factors  Culture  Parental dictates  Teachers  Friends and other situations
  8. 8. Workforce Value  At the workplace  Old value: Hard work, conservativetraditional, loyalty to the employer organization.  Today value: Job satisfaction, leisure time, loyalty to relationship, flexibility to career  Negative value: Anger, ,meanness, arrogance (overconfidence),crookednesswicked, greed/lust
  9. 9. Business Value  Scholars identified ten fundamental shared values for successful organization Truth Mentoring Giving credit Honesty Caring Trust Openness Risk taking Social conscience Responsibility & accountability Firm can manage itself through values and core values
  10. 10. Office Technology Is it wrong to use company e-mail for personal reasons? Is it wrong to use office equipment to help your children or spouse do schoolwork? Is it wrong to play computer games on office equipment during the work day? Is it wrong to use office equipment to do internet shopping? Is it unethical to blame an error you made on a technological glitch? Is it unethical to visit pornographic web sites using office equipment?
  11. 11. Gift and Environment • What’s the value at which a gift from a supplier or client becomes troubling? • Is an Rs.10000 gift to boss unacceptable? • Is an Rs.10000 gift from the boss unacceptable? • Is it OK to take an Rs.5000 pair of cricket match tickets from suppliers? • Is it OK to take an Rs.120 pair of theater tickets? • Is it OK to take an Rs.1000 holiday food basket? • Is it ok to take a Rs.2500 gift certificate? • Can you accept Rs750 prize won at a raffle at a supplier conference? Truth and Lies •Due to on the job pressure. Have you ever abused or lied about sick day? •Due to on-the job pressure have you ever taken credit for someone else’s work or idea?
  12. 12. Ethics  There is no agreement to define ethics means  E.g.:  Helpless Boy from everything asked “Priest I will give you an apple if you tell me where god is”?  Priest replied, “I will give you two apples if you tell me where he is not?”  Value…Ethics…
  13. 13. Ethics  Ethics is derived from the Greek word “ethos” which means customs, habitual usage, conduct and character.  Ethics is an individual’s personal beliefs regarding what is right and wrong or good or bad.  Ethics involves a discipline that examines good or bad practices within the context of a moral duty
  14. 14. Formation of Personal Ethics  Persons ethics are formulated through the operation of five key forces in the individual’s environment.  Family influences  Peer influences  Experiences  Value and Morals  Situational factors
  15. 15. Ethics  Philosophers today usually divide ethical theories into four general subject areas: ◦ ◦ ◦ ◦ Descriptive ethics Metaethics Normative ethics Applied ethics
  16. 16. Descriptive ethics  It is closely related to anthropology, sociology, and psychology and leans heavily on them. ◦ It consists of studying and describing the morality of a people, culture, or society. ◦ It compares and contrasts different moral systems, codes, practices, beliefs, principles, a nd values.
  17. 17. Metaethics Metaethics investigates where our ethical principled come from, and what they mean.  That attempts to discover the origin or cause of right and wrong.” ◦ It discuss about the theoretical meaning and reference of moral propositions and how their truth values may be determined; ◦ questions such as “What is goodness?” 
  18. 18. Normative ethics Normative ethics, about the practical means of determining a moral course of action.  This may involve articulating the good habits that we should acquire, the duties that we should follow.  Question as “what should one do?” 
  19. 19. Applied ethics Applied ethics ,consider about how moral outcomes can be achieved in specific situations;  And applied ethics involves examining specific controversial issues, such as abortion, infanticide, animal rights, environmental concerns, homosexuality, capital punishment, or nuclear war. 
  20. 20. Ethics and Moral Moral is similar to ethics and many people use the two words interchangeably and derived from the Latin “mores”, means custom or habit.  And morals are based on religious beliefs and social influence and group norms. 
  21. 21. Ethics & Moral  Ethics and morals both relate to “right” and “wrong” conduct. However, ethics refer to the series of rules provided to an individual by an external source. E.g. their profession. On the other hand, morals refer to an individual’s own principles regarding right and wrong.
  22. 22. Ethics What is it? Source Why we do it? Morals The rules of conduct recognized in respect to a particular class of human actions or a particular group, culture, etc. it defines how thing are according to the rules. Social system/ external Because society says it is the right thing to do. Principles or habits with respect to right or wrong conduct. It defines how things should work according to an individual’ ideas and principles. Individual / internal Because we believe in something being right or wrong. Doing something against one’s morals and principles can have different effects on different people, they may feel uncomfortable, remorse, depressed etc. Usually consistent, although can change if an individual’s beliefs change. What if we don’t do We will face peer/ societal it? disapproval, or even be fired from our job. Flexibility Ethics are dependent on others for definition. They tend to be consistent within a certain context, but can vary
  23. 23. Ethics, value, Moral Ethics are rules that help us tell the difference between right and wrong. They encourage us to do the right thing.  Values tell us what is important. They help us make decisions about right and wrong.  Morals are rules we use to decide what is good or bad. 
  24. 24. 1980s Bribery and illegal contracting practices Employer/em Human rights Deceptive ployee issues (forced advertising tensions labor, low wages, work environment) Civil rights & Firms start Financial race relation practice of fraud (savings issues covering up & loan not scandals) confronting issues Changing Federal Transparency work ethics Corrupt issues arise Practices Act passes (1977) Drug use escalated 1970s Employee militancy (us vs. them) Compliance & legal to values orientation Defense Industry Imitative (1986) 1990s Unsafe work practice in third world countries Increased corporate Inability for personal damage Financial mismanagem ent & fraud 2000+ Emerging technology issues cyber crime privacy Intellectual property theft Federal sentencing Guidelines for Org (1991) Global Sullivan Principles (1999) Sarbannes oxley Act (2002) International corruption UN Convention Against Corruption (2003) Business Ethics Time line 1960s Environment al issues
  25. 25. Sources of Ethical Norms Fellow Workers Opposites Family Regions of Country Profession The Individual Conscience Friends The law Employer Religious Beliefs Society at large
  26. 26. Ethics and Law Law often represent an ethical minimum  Ethics often represents a standards that exceeds the legal minimum  Frequent Ethics Overlap Law
  27. 27. Concepts of Ethics Developed by moral philosophers over generations and used to distinguished ethical from unethical behavior. But each ethical concepts has problems  The 4 Concept of Ethics ◦ Relativism ◦ Egoism ◦ Utilitarianism ◦ Deontologism 
  28. 28. Relativism There is no universal standard by which morality can be judged  At here what is correct for one society may be wrong for another  And Ethics and morality are relative 
  29. 29. Relativism There are no absolutes/limitsmurder, slavery, torture, rape are also accepted  Always directed to meant by a society as a subsocieties  Leads to conclusion – each person’s opinion is correct  Nothing that anyone does is morally wrong 
  30. 30. Egoism    It is one ought to act in his or her own self interest and when it is ethical behavior is that which promotes one’s own self interest. And it does not mean should not obey laws – only do so if in self interest Ethical egoism is the view that what a person ought to do is always what they judge to be in their individual best interest to do. Psychological egoism is the view that everyone, in fact, always does act from a self-interested motive
  31. 31. Utilitarianism      The morality of an action can be determined by its consequences. And an action is ethical if it promotes the greatest good for the greatest number The benefits of the Action is higher than its cost means the behavior is ethical otherwise it is unethical Restrictions against the majority to protect a minority is not utilitarian In the eyes of a utilitarian, any action is justified if it works towards the greatest utility.
  32. 32. Deontologism Derived from the Greek world for Duty  Actions are not justified by their consequences.  Factors other than good outcomes determine the rightness of actions 
  33. 33. Macro & Micro Ethics Micro-ethics (individual focus) De George in Roddis (1993) Ladd (1991) Vanderburg (1995) Macro-ethics Actions of individual considered person. The role of individual in industry and other organizations, professional, societies, and responsibilities of the profession Professional Problems confronting relationships between members of a individual professionals profession as a group and other individuals in their relationship to who are their clients, society colleagues, employers Microlevel analysis – of Macrolevel analysis- of individual technologies technology as a whole or
  34. 34. Business Ethics Typologies Micro Macro Normative Values/Norms & Principles for Organizational Decisions Norms & Principles and a Fair economic System – i.e. Distributive Justice Descriptive Codes, Standards of Conduct, & Compliance Systems for Organizations Public Policy & the Legalization of Business Ethics – i.e.U.S.Sarbannes Oxley Act, EU Privacy Laws
  35. 35. Development Of Ethics Different cultures have different standards of what is good and what is bad, but humans tend to go through a certain process in learning to apply their ethics and cultural morels to their own behavior.  Contributors  ◦ Piaget – Cognitive – development Theory ◦ Kohlberg – Conventional Approach
  36. 36. PREMORAL PERIOD (up to 4-5) ◦ Preschool children show little awareness of rules, purpose of the game is to take turns and have fun and Parents and older children are more tolerant of kid’s behavior. ◦ At the end of this stage (~4 -5) children become more aware of the “rules” by watching older people and imitating their behavior.
  37. 37. MORAL REALISM (6-10) Children at this stage tend to think of rules in terms of MORAL ABSOLUTES is “right” always means following the rules  The child also believes in IMMANENT JUSTICE is any violation of society rules will be caught and punished  In SUM: rules exist outside of themselves. Wrong is whatever adults forbid and punish. Rules MUST NOT be questioned. 
  38. 38. AUTONOMOUS MORALITY (11 on) Older, more autonomous (independent) children begin to understand that social rules are arbitrary  They exist because agreements have been made. And it is at this stage that rules begin to be challenged  At this stage the INTENTION of the individual begins to have an impact (punish kid who was stealing jam) 
  39. 39. Kohlberg Contribution  Kohlberg proposed 3 stages of moral development, with each stages consisting of 2 distinct sub stages. ◦ Level 1: preconvention morality (1&2) ◦ Level 2: conventional morality (3&4) ◦ Level 3: post-conventional morality (5&6)
  40. 40. Level 01  Stage 01, - punishment & obedience orientation ◦ Goodness or badness of an act is based on its consequences.  Stage 02, - instrumental orientation ◦ Person conforms to rules in order to gain rewards or to satisfy personal needs,
  41. 41. Level 02  Stage 03: “Good-boy/good-girl” orientation ◦ Moral behavior is that which pleases, helps, or is approved by others. And actions are evaluated on the basis of intent with one objective is to be thought of as a “nice” person  Stage 04: Authority and social-ordermaintaining morality  Accept and conforms to social rules and conventions because of a belief that rules and laws maintain an order which is judged good or moral  Law and order mentality
  42. 42. Level 03  Stage 05: Social contract morality. ◦ Flexibility begins in moral reasoning with a sense of having to live up to the law, but an understanding that laws can be wrong  Stage 06; Universal ethical principles ◦ “Highest” stage of moral reasoning right and wrong defined on a personal belief or selfchosen ethics ◦ Belief in abstract principles which override all others (life, liberty, equality)
  43. 43. Business ethics Business Ethics means conducting all aspects of business and dealing with all stakeholders in ethical manner…  A specialized study of right and wrong applied to business policies, institutions and behaviors; where moral standards apply to social systems and organizations that produce and distribute goods and services. 
  44. 44. Business Ethics: Today vs. Earlier Expected and Actual Levels of Business Ethics Society’s Expectations of Business Ethics Ethical Problem Actual Business Ethics Ethical Problem 1950s Time Early 2000s
  45. 45. Business ethics  Three basic topics covered: ◦ Systematic Issues – Raised question about economic, political, legal or other social systems within which business operate ◦ Corporate Issues – raised question about a particular company ◦ Individual Issues – Questions about a particular individual within an organization, their behavior & decisions
  46. 46. A model to Identify Business Ethics Business Ethics Managerial Mischief Moral Problems Illegal act Micro level problems (Individual consideration) Questionable Macro level problems Practices (organizational consideration)
  47. 47. Business ethics  At the Practices of Business Ethics have to consider ◦ ◦ ◦ ◦ Profits versus higher wages Expansion versus development Production versus pollution Supplier benefits versus consumer prices/lower costs ◦ Survival of the business versus needs of stakeholders
  48. 48. Business ethics  Solutions for Business immoral/amoral ◦ ◦ ◦ ◦ ◦ ◦ ◦ Taxation Self Regulation Subsidies Government/EU regulation Legislation Pressure Groups Improve competition and contestability of markets ◦ Social Environmental Audits
  49. 49. Significance of Business ethics Attract customers to the firm’s products, thereby boosting sales and profits  Make employees want to stay with the business, reduce labor turnover and therefore increase productivity  Attract more employees wanting to work for the business, reduce recruitment costs and enable the company to get the most talented employees  Attract investors and keep the company’s share price high, thereby protecting the business from takeover. 
  50. 50. Significance of Business ethics    The need for a company to behave “ethically” is described in terms of a company’s need to interact productively with its stakeholders. “Behavior that is trusting, trustworthy, and cooperative, not opportunistic, will give the firm a competitive advantage”. Sustainable global competitive advantage occurs when a company implements a valuecreating strategy which other companies are unable to imitate.
  51. 51. Significance of Business ethics It facilitates the delivery of quality of products in an honest, reliable way.  This approach can enhance work life by making the workplace more fun and challenging.  It can improve relationships with stakeholders and can instill a more positive mindset that fosters creativity and innovations among the stakeholders. 
  52. 52.  Thank you!

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