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Business Ethics


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Business Ethics

  1. 1. Business Ethics Ferrell, et al
  2. 2. Chapter 1: The Importance of Business Ethics
  3. 3. American distrust of business <ul><li>81% Americans think that business is too concerned about profits, and are not concerned with social responsibility. </li></ul><ul><li>70% Americans think that if the opportunity arises , most businesses will take advantage of the public if they feel they are not likely to get caught. </li></ul><ul><li>61% Americans think that even long established companies cannot be trusted to make safe , durable products without the government setting industry standards. </li></ul>
  4. 4. Business ethics defined <ul><li>The definition of ethics. </li></ul><ul><li>The difference between and ordinary decision and an ethical decision. </li></ul><ul><li>Specail aspects to be consederd when applying ethics to businesses. </li></ul><ul><li>Business ethics defined. </li></ul>
  5. 5. Why study business ethics? <ul><li>Survey conducted to show evidence of decling ethical standards. </li></ul><ul><li>Specific issues: abusive behavior, harassment, accounting fraud, employee theft and defective products. </li></ul>
  6. 6. The reasons for studying business ethics <ul><li>Help identifying ethical issues , and recognizing approaches available to resolve them. </li></ul><ul><li>How to cope with conflicts between your own personal values and those of the organization. </li></ul>
  7. 7. The development of business ethics <ul><li>Before the 1960’s: </li></ul><ul><li>Questioning the concept of capitalism. </li></ul><ul><li>A fixed living wage. </li></ul><ul><li>The new deal then the fair deal. </li></ul><ul><li>Religion played a big role in implementing values and morals in individuals. </li></ul><ul><li>The 1960’s: </li></ul><ul><li>The rise consumerism. </li></ul><ul><li>The consumers’ bill of rights: the right to safety, the right to be heard, the right to be informed and the right to choose. </li></ul>
  8. 8. The development of business ethics <ul><li>The 1970’s: </li></ul><ul><li>Business professors began to teach and write about corporate social responsibility ( the organization's responsibility to maximize its positive impact and to minimize its negative impact) </li></ul><ul><li>The 1980’s: </li></ul><ul><li>Business acadimics and practitioners acknowledged ethics as a field of study. </li></ul><ul><li>The defense industry initiative on business ethics and conduct ( DII) was developed to guide corporate support for ethical conduct. </li></ul><ul><li>The DII included six principles. </li></ul><ul><li>International corporations found that accepted rules no longer applied. </li></ul>
  9. 9. The development of business ethics <ul><li>The 1990’s: </li></ul><ul><li>The bill Clinton administration continued to support self regulation and free trade, but the government had to take action with heath related issues such as teenage smoking. </li></ul><ul><li>The federal sentencing guidelines for organizations (FSGO) set the tone for organizational ethical compliance programs. </li></ul><ul><li>The 21 st century: </li></ul><ul><li>More then a few businesses did not fully embrace public’s desire for high ethical standards. ( Arthur Andersen). </li></ul><ul><li>The Sarbanes Oxley act was passed , the most far reaching change in organizational control and accounting regulations. </li></ul>
  10. 10. Developing an organizational and global ethical culture <ul><li>Businesses were creating ethics programs and appointing ethics officers to oversee them. </li></ul><ul><li>The term ethics culture can be viewed as the disicion making process that employees use to determine whether their responses to ethical issues are right or wrong. </li></ul><ul><li>The goal for an ethical culture is to minimize the need for rules and maximize the use of principles in decision making. </li></ul>
  11. 11. The benefits of business ethics Employee commitment and trust Investor loyalty and trust Customer Satisfaction and trust profits Ethical culture