BSN 107

1. ESSENTIALS OF THE LEGAL
ENVIRONMENT TODAY, 5E
ROGER LEROY MILLER
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protected website for classroom use.

2. CHAPTER 3
BUSINESS ETHICS
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protected website for classroom use.

3. LEARNING OBJECTIVES
1. What is business ethics, and why is it important?
2. How do duty-based ethical standards differ from
outcome-based ethical standards?
3. What are five steps that a businessperson can
take to evaluate whether his or her actions are
ethical?
4. How can business leaders encourage their
employees to act ethically?
5. What types of ethical issues might arise in the
context of international business transactions?
© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-
protected website for classroom use.

4. THE NEED FOR BUSINESS ETHICS
• Ethics is the study of right and wrong
behavior.
• Whether an action is fair, right or just.
• In business, ethical decisions are the
application of moral and ethical
principles to the marketplace and
workplace.
© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-
protected website for classroom use.

5. THE NEED FOR BUSINESS ETHICS
• Why Is Studying Business Ethics
Important?
• Profit maximization
• Rise of corporate citizenship
• Triple bottom line: a corporation’s profits, its impact on
people, and its impact on the planet
© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-
protected website for classroom use.
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6. THE NEED FOR BUSINESS ETHICS
• The Importance of Ethics in Making
Business Decisions
• Businesses should evaluate:
1.Legal implications
2.Public relations impact
3.Safety risks for consumers and employees
4.Financial implications
• Long-run profit maximization
• The Internet can ruin reputations
• Image is everything
© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or
service or otherwise on a password-protected website for classroom use.

7. THE NEED FOR BUSINESS ETHICS
• The Relationship of Law and Ethics
• Moral minimum: minimum degree of
ethical behavior expected of a business
firm, which is usually defined as
compliance with the law.
• Ethics and company codes of ethics
• Ethical uncertainty and “grey areas”
• Make it difficult for companies to navigate and forecast.
© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or
service or otherwise on a password-protected website for classroom use.

8. BUSINESS ETHICS AND SOCIAL
MEDIA
• Hiring Procedures
• Employers use of social media searches
• The Use of Social Media to Discuss
Work-Related Issues
• Company guidelines for appropriate social
media usage
• 2012 NLRB ruling
• Ethics in Reverse
• Employee ethics
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protected website for classroom use.

9. APPROACHES TO ETHICAL
REASONING
•Duty-Based Ethics
• Derived from religious or philosophical
principles
• Religious ethical standards
• The principle of rights
• Kantian ethical principles
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protected website for classroom use.
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10. APPROACHES TO ETHICAL
REASONING
• Outcome-Based Ethics: Utilitarianism
• An action is ethical based on whether it
produces the greatest good for the
greatest number of people upon which it
has an effect.
• If it affects the majority adversely, it is
morally wrong.
© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-
protected website for classroom use.

11. APPROACHES TO ETHICAL
REASONING
• Corporate Social Responsibility (CSR)
• Those who manage corporations should
be accountable to society for their
actions.
• Social aspects of CSR
• Corporate aspects of CSR
• Stakeholders: groups other than
shareholders affected by corporate
decisions
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protected website for classroom use.

12. MAKING ETHICAL BUSINESS
DECISIONS
• People entering the global corporate
community must be prepared to make
hard decisions.
• A Systematic Approach
1.Inquiry
2.Discussion
3.Decision
4.Justification
5.Evaluation
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protected website for classroom use.
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13. MAKING ETHICAL BUSINESS
DECISIONS
• The Importance of Ethical Leadership
• Attitude of top management
• Commitment to ethical decision making
• Setting realistic production or sales goals
• Not accepting ethical transgressions of others
• Behavior of owners and managers
• The Sarbanes-Oxley Act
• Requires companies to set up confidential systems so that
employees and others can “raise red flags” about
suspected illegal or unethical auditing and accounting
practices
© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or
service or otherwise on a password-protected website for classroom use.
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14. GLOBAL BUSINESS ETHICS
• Employment Practices of Foreign
Suppliers
• Many U.S. firms contract with companies in
other nations to produce goods
• U.S. companies must remain aware of the
practices of those foreign companies.
© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or
service or otherwise on a password-protected website for classroom use.
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15. GLOBAL BUSINESS ETHICS
• The Foreign Corrupt Practices Act
• Prohibition against bribery of foreign
officials
• FCPA does not permit “grease” payments to minor
officials.
• Nor does FCPA prohibit payments to foreign officials
which are lawful in that country.
• Accounting requirements
• FCPA prohibits anyone from making false statements to
accountants or false entries in a record or account.
© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-
protected website for classroom use.