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  1. 1. BUSINESS ETHICS Bill Baddorf WD [email_address] 915-3654
  2. 2. Ethics Test <ul><li>Quick and easy … </li></ul><ul><li>First thought that comes to your mind. </li></ul>
  3. 3. <ul><li>QUICK TEST OF YOUR ETHICS BELIEFS </li></ul><ul><li>Answer each question with your first reaction. Circle the number, from 1 to 4, that best represents your beliefs if 1 represents “Completely Agree” and 4 represents “Completely Disagree.” </li></ul><ul><li>I consider myself the type of person who does whatever it takes to get the job done, period. </li></ul><ul><li>1 2 3 4 </li></ul><ul><li>Ethics should be taught at home and in the family, not in professional or higher education. </li></ul><ul><li>1 2 3 4 </li></ul><ul><li>I believe that the “golden rule” is that the person who has the gold rules. </li></ul><ul><li>1 2 3 4 </li></ul><ul><li>Rules are for people who don’t really want to make it to the top of a company. </li></ul><ul><li>1 2 3 4 </li></ul><ul><li>Acting ethically at home and with friends is not the same as acting ethically on the job. </li></ul><ul><li>1 2 3 4 </li></ul><ul><li>I would do what is needed to promote my own career in a company, short of committing a serious crime. </li></ul><ul><li>1 2 3 4 </li></ul><ul><li>Cutthroat competition is part of getting ahead in the business world. </li></ul><ul><li>1 2 3 4 </li></ul><ul><li>Lying is usually necessary to succeed in business. </li></ul><ul><li>1 2 3 4 </li></ul><ul><li>I would hide truthful information about someone or something at work to save my job. </li></ul><ul><li>1 2 3 4 </li></ul><ul><li>I consider money to be the most important reason for working at a job or in an organization. </li></ul><ul><li>1 2 3 4 </li></ul><ul><li>Add up all the points. </li></ul><ul><li>Total Score is _________ </li></ul>
  4. 4. Self Grading of Test <ul><li>Add up all the numbers you circled. </li></ul><ul><li>What was your grade? 10? 15? 30? 40? </li></ul><ul><li>…………………………………………….. </li></ul><ul><li>The lower the score, the more questionable are your ethical principles regarding business activities. </li></ul><ul><li>10 is the lowest … 40 is the highest. </li></ul><ul><li>Consider why you answered as you did. </li></ul>
  5. 5. R Business ethics is about relationships, values, justice, and identity (personal, professional, corporate, national, and global). <ul><li>Why does the corporation exist? What is its raison d’etre? </li></ul><ul><li>How are we going to treat stakeholders? </li></ul><ul><li>What’s a stakeholder? </li></ul><ul><li>What is our purpose, our values, our culture? </li></ul>
  6. 6. R We need an ethical framework to figure this all out! <ul><li>To make decisions that matter. </li></ul><ul><li>To collect and analyze our thoughts. </li></ul><ul><li>To decide what is right: </li></ul><ul><ul><ul><li>Ethically </li></ul></ul></ul><ul><ul><ul><li>Morally </li></ul></ul></ul><ul><ul><ul><li>Economically </li></ul></ul></ul><ul><ul><ul><li>Socially </li></ul></ul></ul><ul><ul><ul><li>Legally </li></ul></ul></ul><ul><ul><ul><li>Spiritually … and often these disagree!!! </li></ul></ul></ul>
  7. 7. R Foot Stomper #1 – Classical ethical principles remain constant! <ul><li>What is the source of the most classical source of ethics? </li></ul><ul><li>The BIBLE! (keep these Scriptures in mind for your Operations Manual) </li></ul>
  8. 8. R Source of all Truth <ul><li>Heb 13:8 </li></ul><ul><li>Jesus Christ is the same yesterday and today and forever. </li></ul><ul><li>NASU </li></ul><ul><li>Matt 5:18 </li></ul><ul><li>&quot;For truly I say to you, until heaven and earth pass away, not the smallest letter or stroke shall pass from the Law until all is accomplished. </li></ul><ul><li>NASU </li></ul><ul><li>2 Tim 3:16-17 </li></ul><ul><li>16 All Scripture is inspired by God and profitable for teaching, for reproof, for correction, for training in righteousness; 17 so that the man of God may be adequate, equipped for every good work. </li></ul><ul><li>NASU </li></ul>
  9. 9. Housekeeping <ul><li>Attendance Roster (pass in Ethics Pledge – print name – top right) </li></ul><ul><li>Syllabus </li></ul><ul><li>Ethics Pledge </li></ul><ul><li>7 step Case Analysis </li></ul><ul><li>Principles of Operations Journal </li></ul>
  10. 10. Ethics – what is it? <ul><li>Webster: Relating to, or treating of morals. Science of morals, moral principles, rules of conduct. </li></ul><ul><li>Weiss: Asking what is “right and wrong, good and bad, and harmful and beneficial…” </li></ul><ul><li>Bruce Kaye: (Law, Morality and the Bible) “The ultimate goal of the day-to-day ethical actions of the Christian is the glory of God.” </li></ul><ul><li>World café: how did you describe Ethics? </li></ul>
  11. 11. Chapter One Business Ethics, the Changing Environment, and Stakeholder Management Business Ethics: A Stakeholder and Issues Management Approach , 4e, Joseph W. Weiss Copyright ©2006 by South-Western, a division of Thomson Business & Economics. All rights reserved.
  12. 12. Recent Examples of Ethical Events in Corporate America <ul><li>Scandals </li></ul><ul><ul><li>Enron </li></ul></ul><ul><ul><li>Tyco </li></ul></ul><ul><ul><li>WorldCom, etc. </li></ul></ul><ul><li>Excessive CEO pay and poor firm performance </li></ul><ul><li>Sarbanes-Oxley Act of 2002 </li></ul><ul><li>Outsourcing trends </li></ul>
  13. 13. Figure 1.1: Environmental Dimensions Affecting Industries, Organizations, and Jobs
  14. 14. Figure 1.2: Primary vs. Secondary Stakeholder Groups
  15. 15. Secondary Stakeholders <ul><li>Local community groups </li></ul><ul><li>Special-interest groups </li></ul><ul><li>Consumer groups </li></ul><ul><li>Environmental groups </li></ul><ul><li>Media </li></ul><ul><li>Society-at-large </li></ul><ul><li>American Civil Liberties groups </li></ul><ul><li>Should managers pay attention to the needs of these groups? What priority should they have? </li></ul>
  16. 16. What is Business Ethics? <ul><li>Laura Nash has defined business ethics as “the study of how personal moral norms apply to the activities and goals of commercial enterprise, ” as dealing with three basic areas of managerial decision making: </li></ul><ul><ul><li>Choices about what the laws should be and whether to follow them </li></ul></ul><ul><ul><li>Choices about economic and social issues outside the domain of law </li></ul></ul><ul><ul><li>Choices about the priority of self-interest over the company’s interests </li></ul></ul>
  17. 17. Unethical Business Practices of Employees <ul><li>Showing respect to those who act unethically </li></ul><ul><li>Abusive or intimidating behavior </li></ul><ul><li>Misrepresentation of hours worked </li></ul><ul><li>Lying </li></ul><ul><li>Withholding information </li></ul><ul><li>Context issues: </li></ul><ul><ul><li>Companies in transition (mergers, downsizing) </li></ul></ul><ul><ul><li>Younger managers and employees with lower tenure in the organization </li></ul></ul>
  18. 18. When Organizations Do Well in Regard to Ethics <ul><li>Top management keeps promises and discusses the importance of ethics </li></ul><ul><li>Good role models for ethical behavior; honesty and respect practiced more </li></ul><ul><li>Less unethical behavior observed since 2000 </li></ul><ul><li>More misconduct being reported by employees since 2000 </li></ul>
  19. 19. Where the Most Unethical Behavior Happens <ul><li>Government </li></ul><ul><li>Sales </li></ul><ul><li>Law </li></ul><ul><li>Media </li></ul><ul><li>Finance </li></ul><ul><li>Medicine </li></ul><ul><li>Banking </li></ul><ul><li>Manufacturing </li></ul>
  20. 20. The Costs of Doing Business Unethically <ul><li>Billions of dollars each year in lawsuits and settlements </li></ul><ul><li>Deterioration of relationships </li></ul><ul><li>Damage to reputation </li></ul><ul><li>Declining employee productivity, creativity, and loyalty </li></ul><ul><li>Ineffective information flow throughout the organization </li></ul><ul><li>Absenteeism and turnover </li></ul><ul><li>Theft (est. $600 billion annually) </li></ul>
  21. 21. Figure 1.3: Business Ethics Levels
  22. 22. Key Questions if Faced with an Ethical Dilemma <ul><li>What are my core values and beliefs? </li></ul><ul><li>What are the core values and beliefs of my organization? </li></ul><ul><li>Whose values, beliefs, and interests may be at risk in this decision? Why? </li></ul><ul><li>Who will be harmed or helped by my decision or by the decision of my organization? </li></ul><ul><li>How will my own and my organization’s core values and beliefs be affected or changed by this decision? </li></ul><ul><li>How will I and my organization be affected by the decision? </li></ul><ul><li>WHAT’s MISSING HERE?? </li></ul>
  23. 23. Key Questions if Faced with an Ethical Dilemma <ul><li>#1: What does the Bible say? </li></ul><ul><li>This is the reason for the Principles of Operation Journal … what does the Bible say? </li></ul><ul><li>Are my “core beliefs and beliefs of my organization” more or less important than what the Bible says? </li></ul>
  24. 24. <ul><li>Ps 119:11 </li></ul><ul><li>11 Your word I have treasured in my heart, </li></ul><ul><li>That I may not sin against You. </li></ul><ul><li>Ps 119:89 </li></ul><ul><li>Forever, O LORD, </li></ul><ul><li>Your word is settled in heaven. </li></ul><ul><li>Ps 119:105 </li></ul><ul><li>Your word is a lamp to my feet </li></ul><ul><li>And a light to my path. </li></ul><ul><li>Ps 119:133 </li></ul><ul><li>133 Establish my footsteps in Your word, </li></ul><ul><li>And do not let any iniquity have dominion over me. </li></ul><ul><li>Ps 119:140 </li></ul><ul><li>140 Your word is very pure, </li></ul><ul><li>Therefore Your servant loves it. </li></ul><ul><li>Ps 119:160 </li></ul><ul><li>160 The sum of Your word is truth, </li></ul><ul><li>And every one of Your righteous ordinances is everlasting. </li></ul><ul><li>John 17:17-18 </li></ul><ul><li>A Sanctify them in the truth; Your word is truth. </li></ul>
  25. 25. Aaron Feuerstein <ul><li>Malden Mills Fire </li></ul><ul><li>Jewish – relying on lessons from the Torah </li></ul><ul><li>Kept everyone on salary while closed </li></ul><ul><li>Rebuilt & borrowed $ to upgrade </li></ul><ul><li>“I did it because it was the right thing to do” </li></ul><ul><li>DO RIGHT BECAUSE IT’S RIGHT TO DO RIGHT! </li></ul>
  26. 26. Homework <ul><li>Today’s: 2, 3, 6, 7, 8, (9/10think on those) </li></ul><ul><li>Review </li></ul><ul><li>Ethical Dilemma: You’re on the Hot Seat </li></ul><ul><ul><li>Questions 1 - 3 </li></ul></ul>
  27. 27. Ethics The Law of Christ <ul><li>John 15:8-11 </li></ul><ul><li>8 &quot; My Father is glorified by this , that you bear much fruit , and so prove to be My disciples. 9 &quot;Just as the Father has loved Me, I have also loved you; abide in My love. 10 &quot; If you keep My commandments , you will abide in My love ; just as I have kept My Father's commandments and abide in His love. 11 &quot; These things I have spoken to you so that My joy may be in you, and that your joy may be made full . </li></ul><ul><li>NASV </li></ul>
  28. 28. See You Thursday! Build on a good foundation