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BUS 300 Chapter 2
- 1. © 2013 The McGraw-Hill Companies, Inc. All rights reserved. Chapter 2 Business Ethics and Social Responsibility 1 Copyright © 2016 McGraw-Hill Education. All rights reserved.
- 2. © 2013 The McGraw-Hill Companies, Inc. All rights reserved. Chapter 2 Ethical Dilemma What is the best source for ethical business practices: The individual employee, or the business organization itself? To what extent should individual employees be allowed to lend input in the creation of a code of ethics for a business organization? In the event that an individual employee’s ethical standards differ from his/her employer’s code of ethics, what can/should be done to resolve those differences? 2
- 3. © 2013 The McGraw-Hill Companies, Inc. All rights reserved. Chapter 2 Case Hypothetical and Ethical Dilemma As hiring coordinator for Hennessey Networking Solutions, Inc., (Hennessey) Andrea Templeton knew that her position was of utmost importance to her company in terms of hiring candidates who were well-qualified, and who would best contribute to the company’s overall success. On her desk was the employment application and resume of Timothy Carraway. Andrea had just finished her interview of Timothy, who was the last in a long line of interviewees who had applied for an entry-level information technology (IT) position at Hennessey. Hennessey only had one (1) opening available. During Timothy’s interview, the candidate revealed that seven (7) years ago, he had been tried and convicted in federal court for selling a significant amount of cocaine. Timothy had also revealed the conviction on his employment application. Timothy went to great lengths to explain to Andrea that he sincerely regretted the indiscretions of his youth, and that he had spent the last seven (7) years of his life “paying penance,” and reforming his life. After serving three (3) years in federal penitentiary, Timothy had earned his bachelor’s degree in Information Technology, graduating with honors . Timothy’s interview had gone very well. In fact, Andrea felt that in terms of his personality and education, he was the best “fit” for the position. Andrea was obviously concerned about Timothy’s criminal background, but she was also concerned about the young man should he not find an employment opportunity after graduating from college. Without a legitimate employment option, would Timothy revert back to his “criminal ways? Does Andrea Templeton and Hennessey Networking Solutions, Inc. have an ethical obligation to hire Timothy Carraway? Should Andrea’s “hire” decision be based exclusively on Timothy’s qualifications for the job? Why or why not? 3
- 4. © 2013 The McGraw-Hill Companies, Inc. All rights reserved. Chapter 2 Case Hypothetical and Ethical Dilemma John Harrison is the owner of Harrison Enterprises, Inc., a small metal fabrication shop located in Poughkeepsie, New York. Andrew Jameson, an employee of Harrison Enterprises, has approached John with a request. Andrew is the proud parent of a newborn son, and he would like to take the next two (2) weeks off from work in order to “bond” with his new child. John knows that Andrew does not have any accrued vacation time (shortly before his son was born, Andrew had taken a final “two-person family” trip to Florida with his wife, Sara). He also knows that Harrison Enterprises is not legally required to comply with the Family and Medical Leave Act (FMLA), since the company only has seventeen (17) employees (FMLA mandates that businesses employing more than fifty people provide their workers with up to twelve weeks’ unpaid leave every year for a host of specified reasons, including the birth of a child) . John wonders whether his company has an ethical obligation to comply with the “spirit” of the Family and Medical Leave Act, even though he does not have a technical, legal obligation of compliance. Advise John whether his company has such an ethical obligation. Should John Harrison allow Andrew Jameson to take his requested two (2) weeks of leave from work? 4
- 5. © 2013 The McGraw-Hill Companies, Inc. All rights reserved. Business Ethics and Social Responsibility •Ethics: The study and practice of decisions about what is good or right •Business Ethics: The application of ethics to the problems and opportunities experienced by businesspeople •Ethical Dilemma: A problem about what a firm should do for which no clear, right decision is available •Social Responsibility of Business: Expectations that the community imposes on firms doing business inside its borders 5
- 6. © 2013 The McGraw-Hill Companies, Inc. All rights reserved. The “WH” Process of Ethical Decision Making: W—WHO (Stakeholders) •Consumers •Owners or Investors •Management •Employees •Community •Future Generations 6
- 7. © 2013 The McGraw-Hill Companies, Inc. All rights reserved. Primary Values and Business Ethics •Freedom •Security •Justice •Efficiency 7
- 8. © 2013 The McGraw-Hill Companies, Inc. All rights reserved. Primary Values and Business Ethics: Freedom •To act without restriction from rules imposed by others •To possess the capacity or resources to act as one wishes •To escape the cares and demands of this world entirely 8
- 9. © 2013 The McGraw-Hill Companies, Inc. All rights reserved. Primary Values and Business Ethics: Security •To possess a large enough supply of goods and services to meet basic needs •To be safe from those wishing to interfere with your property rights •To achieve the psychological condition of self-confidence such that risks are welcome 9
- 10. © 2013 The McGraw-Hill Companies, Inc. All rights reserved. Primary Values and Business Ethics: Justice •To receive the products of your labor •To treat all humans identically, regardless of race, class, gender, age, and sexual preference •To provide resources in proportion to need •To possess anything that someone else is willing to grant you 10
- 11. © 2013 The McGraw-Hill Companies, Inc. All rights reserved. Primary Values and Business Ethics: Efficiency •To maximize the amount of wealth in society •To get the most from a particular output •To minimize costs 11
- 12. © 2013 The McGraw-Hill Companies, Inc. All rights reserved. The “WH” Process of Ethical Decision Making: H—HOW (Guidelines) •The Golden Rule •Public Disclosure Test •Universalization Test 12
- 13. © 2013 The McGraw-Hill Companies, Inc. All rights reserved. Six Ways To Interpret “The Golden Rule” •Do to others as you want them to gratify you •Be considerate of others’ feelings as you want them to be considerate of yours •Treat others as persons of rational dignity like you •Extend brotherly or sisterly love to others, as you would want them to do to you •Treat others according to moral insight, as you would have others treat you •Do to others as God wants you to do to them 13
Editor's Notes
- Chapter 2: Business Ethics and Social Responsibility
- Chapter 2 Ethical Dilemma: What is the best source for ethical business practices: The individual employee, or the business organization itself? To what extent should individual employees be allowed to lend input in the creation of a code of ethics for a business organization? In the event that an individual employee’s ethical standards differ from his/her employer’s code of ethics, what can/should be done to resolve those differences?
- Chapter 2 Case Hypothetical and Ethical Dilemma: As hiring coordinator for Hennessey Networking Solutions, Inc., (Hennessey) Andrea Templeton knew that her position was of utmost importance to her company in terms of hiring candidates who were well-qualified, and who would best contribute to the company’s overall success. On her desk was the employment application and resume of Timothy Carraway. Andrea had just finished her interview of Timothy, who was the last in a long line of interviewees who had applied for an entry-level information technology (IT) position at Hennessey. Hennessey only had one (1) opening available. During Timothy’s interview, the candidate revealed that seven (7) years ago, he had been tried and convicted in federal court for selling a significant amount of cocaine. Timothy had also revealed the conviction on his employment application. Timothy went to great lengths to explain to Andrea that he sincerely regretted the indiscretions of his youth, and that he had spent the last seven (7) years of his life “paying penance,” and reforming his life. After serving three (3) years in federal penitentiary, Timothy had earned his bachelor’s degree in Information Technology, graduating with honors. Timothy’s interview had gone very well. In fact, Andrea felt that in terms of his personality and education, he was the best “fit” for the position. Andrea was obviously concerned about Timothy’s criminal background, but she was also concerned about the young man should he not find an employment opportunity after graduating from college. Without a legitimate employment option, would Timothy revert back to his “criminal ways? Does Andrea Templeton and Hennessey Networking Solutions, Inc. have an ethical obligation to hire Timothy Carraway? Should Andrea’s “hire” decision be based exclusively on Timothy’s qualifications for the job? Why or why not?
- Chapter 2 Case Hypothetical and Ethical Dilemma: John Harrison is the owner of Harrison Enterprises, Inc., a small metal fabrication shop located in Poughkeepsie, New York. Andrew Jameson, an employee of Harrison Enterprises, has approached John with a request. Andrew is the proud parent of a newborn son, and he would like to take the next two (2) weeks off from work in order to “bond” with his new child. John knows that Andrew does not have any accrued vacation time (shortly before his son was born, Andrew had taken a final “two-person family” trip to Florida with his wife, Sara). He also knows that Harrison Enterprises is not legally required to comply with the Family and Medical Leave Act (FMLA), since the company only has seventeen (17) employees (FMLA mandates that businesses employing more than fifty people provide their workers with up to twelve weeks’ unpaid leave every year for a host of specified reasons, including the birth of a child). John wonders whether his company has an ethical obligation to comply with the “spirit” of the Family and Medical Leave Act, even though he does not have a technical, legal obligation of compliance. Advise John whether his company has such an ethical obligation. Should John Harrison allow Andrew Jameson to take his requested two (2) weeks of leave from work?
- In addressing the topics of business ethics and social responsibility, several key topics are important to comprehend. First, “ethics” is the study and practice of decisions about what is good or right. Second, “business ethics” is the application of ethics to the problems and opportunities experienced by businesspeople. Third, an “ethical dilemma” is a problem regarding what a firm should do in situations where no clear, just decision is available. Finally, the “social responsibility” of business represents expectations that the community imposes on firms doing business within its borders.
- The “WH” process of ethical decision-making first involves a determination of “who” is affected by the decision-making process. These individuals are known as “stakeholders,” and include consumers, owners or investors, management, employees, the community-at-large, and future generations.
- The “WH” process of ethical decision-making involves a determination of the “values” involved in the decision-making process. These values include freedom, security, justice, and efficiency.
- The primary values of freedom include the right to act without restriction from rules imposed by others, the right to possess the capacity or resources to act as one wishes, and the right to escape the “cares and demands of this world” entirely.
- The primary values of security include the right to possess a large enough supply of goods and services to meet basic needs, the right to be safe from those wishing to interfere with your property rights, and the right to achieve self-confidence such that risks are welcome.
- The primary values of justice include the right to receive the products of your labor, the right to treat all humans identically (regardless of race, class, gender, age, and sexual preference,) the right to provide resources in proportion to need, and the right to possess anything that someone else is willing to grant you.
- The primary values of efficiency include the right to maximize the amount of wealth in society, the right to get the most from a particular output, and the right to minimize costs.
- The “WH” process of ethical decision-making finally involves the determination of “how” to best conduct the decision-making process, in recognition of appropriate decision-making guidelines. This includes application of “The Golden Rule,” the “public disclosure” test, and the “universalization” test.
- There are several appropriate ways to interpret and apply “The Golden Rule.” These include “Do to others as you want them to gratify you,” “Be considerate of others’ feelings as you want them to be considerate of yours,” “Treat others as persons of rational dignity like you,” “Extend brotherly or sisterly love to others, as you would want them to do to you,” “Treat others according to moral insight, as you would have others treat you,” and “Do to others as God wants you to do to them.”