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  1. 1. Business Ethics FundamentalsMGT 3800 Chapter 6 1 1
  2. 2. Chapter Outline Business Ethics and Public Opinion Three Models of Management What Does Ethics Business Ethics Making Moral Mean? Management Ethics, Economics Actionable and Law: Venn Developing Moral Model Judgment Four Important Elements of Moral Ethics Questions Judgment Summary 2
  3. 3. Introduction Business Ethics Public’s interest in business ethics increased during the last four decades Public’s interest in business ethics spurred by the media 3
  4. 4. Introduction Inventory of Ethical Issues in Business Employee-Employer Relations Employer-Employee Relations Company-Customer Relations Company-Shareholder Relations Company-Community/Public 4 Interest
  5. 5. Public’s Opinion of Business Ethics Gallup Poll finds that only 17 percent to 20 percent of the public thought the business ethics of executives to be very high or high To understand public sentiment towards business ethics, ask three questions Has business ethics really deteriorated? Are the media reporting ethical problems more frequently and vigorously? Are practices that once were socially acceptable no longer socially acceptable? 5
  6. 6. Business Ethics: What Does It ReallyMean? Business Ethics:Today vs. Earlier Period Society’s Expectations of Business Ethics Ethical Problem Actual Ethical Problem Business Ethics 1950s Time Early 2000s 6
  7. 7. Business Ethics: What Does ItReally Mean? Definitions Ethics involves a discipline that examines good or bad practices within the context of a moral duty Moral conduct is behavior that is right or wrong Business ethics include practices and behaviors that are good or bad 7
  8. 8. Business Ethics: What Does ItReally Mean? Two Key Branches of Ethics Descriptive ethics involves describing, characterizing and studying morality “What is” Normative ethics involves supplying and justifying moral systems “What should be” 8
  9. 9. Conventional Approach toBusiness Ethics Conventional approach to business ethics involves a comparison of a decision or practice to prevailing societal norms Pitfall: ethical relativismDecision or Practice Prevailing Norms 9
  10. 10. Sources of Ethical Norms Regions of Fellow Workers Fellow Workers Country Family Profession The Individual Conscience Friends Employer The Law Religious Society at Large Beliefs 10
  11. 11. Ethics and the Law Law often represents an ethical minimum Ethics often represents a standard that exceeds the legal minimum Frequent Overlap Ethics Law 11
  12. 12. Making Ethical Judgments Behavior or act compared with Prevailing norms that has been of acceptability committed Value judgments and perceptions of the observer 12
  13. 13. Ethics, Economics, and Law 6-14
  14. 14. Four Important EthicalQuestions What is? What ought to be? How to we get from what is to what ought to be? What is our motivation for acting ethically? 14
  15. 15. 3 Models of Management Ethics1. Immoral Management—A style devoid of ethical principles and active opposition to what is ethical.2. Moral Management—Conforms to high standards of ethical behavior.3. Amoral Management Intentional - does not consider ethical factors Unintentional - casual or careless about ethical considerations in business 15
  16. 16. 3 Models of Management Ethics Three Types Of Management Ethics 16
  17. 17. Three Approaches to ManagementEthics 6-18
  18. 18. Three Models of ManagementMorality and Emphasis on CSR 6-19
  19. 19. Moral Management Models andAcceptable Stakeholder Thinking 6-20
  20. 20. Making Moral ManagementActionable Important Factors Senior management Ethics training Self-analysis 20
  21. 21. Developing Moral Judgment 6-22
  22. 22. Developing Moral Judgment 6-23
  23. 23. Developing Moral Judgment External Sources of a Manager’s Values Religious values Philosophical values Cultural values Legal values Professional values 23
  24. 24. Developing Moral JudgmentInternal Sources of a Manager’s Values Respect for the authority structure Loyalty Conformity Performance Results 24
  25. 25. Elements of Moral Judgment Moral imagination Moral identification and ordering Moral evaluation Tolerance of moral disagreement and ambiguity Integration of managerial and moral competence A sense of moral obligation 25
  26. 26. Elements of Moral Judgment Amoral Managers Moral Managers Moral Imagination Moral Identification Moral Evaluation Tolerance of Moral Disagreement and Ambiguity Integration of Managerial and Moral Competence A Senses of Moral Obligation 26
  27. 27. Selected Key Terms Amoral management Integrity strategy Business ethics Intentional amoral Compliance strategy management Conventional approach Kohlberg’s levels of to business ethics moral development Descriptive ethics Moral development Ethical relativism Moral management Ethics Normative ethics Feminist Ethics Unintentional amoral Immoral management management 27
  28. 28. Selected Key Terms Amoral management Business ethics Ethics Immoral management Levels of moral development Moral management Morality 28