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1. Using the guidelines provided in this week's chapter (and
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Stakeholders, Ethics, Public Policy Sixteenth Edition
Anne T. Lawrence
San José State University
James Weber
Duquesne University
Business and
Society
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law43665_fm_i-xx ii 01/07/19 10:32 AM
BUSINESS AND SOCIETY: STAKEHOLDERS, ETHICS,
PUBLIC POLICY, SIXTEENTH EDITION
Published by McGraw-Hill Education, 2 Penn Plaza, New York,
NY 10121. Copyright © 2020 by McGraw-Hill
Education. All rights reserved. Printed in the United States of
America. Previous editions © 2017, 2014, and
2011. No part of this publication may be reproduced or
distributed in any form or by any means, or stored in a
database or retrieval system, without the prior written consent
of McGraw-Hill Education, including, but not
limited to, in any network or other electronic storage or
transmission, or broadcast for distance learning.
Some ancillaries, including electronic and print components,
may not be available to customers outside the
United States.
This book is printed on acid-free paper.
1 2 3 4 5 6 7 8 9 LWI 21 20 19
ISBN 978-1-260-04366-2 (bound edition)
MHID 1-260-04366-5 (bound edition)
ISBN 978-1-260-14049-1 (loose-leaf edition)
MHID 1-260-14049-0 (loose-leaf edition)
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All credits appearing on page or at the end of the book are
considered to be an extension of the copyright page.
Library of Congress Cataloging-in-Publication Data
Names: Lawrence, Anne T., author. | Weber, James (Business
ethics professor),
author.
Title: Business and society: stakeholders, ethics, public policy /
Anne T.
Lawrence, San Jose State University, James Weber, Duquesne
University.
Description: Sixteenth edition. | New York, NY : McGraw-Hill
Education, [2020]
Identifiers: LCCN 2018052591 | ISBN 9781260043662 (alk.
paper) | ISBN
1260043665 (bound edition) | ISBN 9781260140491 (loose-
leaf edition) |
ISBN 1260140490 (loose-leaf edition)
Subjects: LCSH: Social responsibility of business.
Classification: LCC HD60 .F72 2020 | DDC 658.4/08—dc23 LC
record available at https://lccn.loc
.gov/2018052591
The Internet addresses listed in the text were accurate at the
time of publication. The inclusion of a website does
not indicate an endorsement by the authors or McGraw-Hill
Education, and McGraw-Hill Education does not
guarantee the accuracy of the information presented at these
sites.
mheducation.com/highered
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iii
law43665_fm_i-xx iii 01/07/19 10:32 AM
Anne T. Lawrence San José State University
Anne T. Lawrence is professor of management emerita at San
José State University. She
holds a Ph.D. from the University of California, Berkeley, and
completed two years of post-
doctoral study at Stanford University. Her articles, cases, and
reviews have appeared in many
journals, including the Academy of Management Review,
Administrative Science Quarterly,
Case Research Journal, Journal of Management Education,
California Management Review,
Business and Society Review, Research in Corporate Social
Performance and Policy, and
Journal of Corporate Citizenship. Her cases in business and
society have been reprinted
in many textbooks and anthologies. She has served as guest
editor of the Case Research
Journal. She served as president of both the North American
Case Research Association
(NACRA) and of the Western Casewriters Association and is a
Fellow of NACRA, from
which she received a Distinguished Contributor Award in 2014.
She received the Emerson
Center Award for Outstanding Case in Business Ethics (2004)
and the Curtis E. Tate Award
for Outstanding Case of the Year (1998, 2009, and 2015). At
San José State University,
she was named Outstanding Professor of the Year in 2005. In
2015, she received a Master
Teacher in Ethics Award from The Wheatley Institution at
Brigham Young University. She
currently serves as chair of the board of the Case Research
Foundation.
James Weber Duquesne University
James Weber is a professor of management and business ethics
at Duquesne University,
where he also serves as the managing director of the Institute
for Ethics in Business. He
holds a Ph.D. from the University of Pittsburgh and has taught
at the University of San
Francisco, University of Pittsburgh, and Marquette University.
His areas of interest and
research include personal, managerial, and organizational
values and cognitive moral
reasoning. His work has appeared in Organization Science,
Human Relations, Business &
Society, Journal of Business Ethics, and Business Ethics
Quarterly. He received the SIM
Sumner Marcus Award for lifetime contribution to the Social
Issues in Management
division of the Academy of Management in 2013 and the Best
Reviewer Award from
Business & Society in 2015. He was recognized by the Social
Issues in Management divi-
sion with the Best Paper Award in 1989 and 1994 and received
the Best Article Award
from the International Association for Business and Society in
1998. He has served as
division and program chair of the Social Issues in Management
division of the Academy
of Management. He has also served as president and program
chair of the International
Association of Business and Society (IABS).
About the Authors
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Preface
In a world economy that is becoming increasingly integrated
and interdependent, the rela-
tionship between business and society is becoming ever more
complex. The globaliza-
tion of business, the emergence of civil society organizations in
many nations, and rapidly
changing government regulations and international agreements
have significantly altered
the job of managers and the nature of strategic decision making
within the firm.
At no time has business faced greater public scrutiny or more
urgent demands to act
in an ethical and socially responsible manner than at the
present. Consider the following:
∙ The rise of populist and nationalist political leaders in the
United States and parts of
Europe and the Middle East have led to renewed debates on the
proper role of govern-
ment in regulating business and protecting stakeholders. As
environmental, financial,
employment, and consumer regulations have been rolled back,
particularly in the United
States, businesses have had to choose whether to take advantage
of loosened rules or to
follow a strategy of voluntary corporate responsibility. Long-
standing trade relationships
have been upended by tariffs and other barriers on imports,
helping some businesses and
hurting others. Changing immigration policy has required firms
to rethink their policies
toward their foreign-born workers, including so-called
Dreamers brought to the United
States illegally as children. In this rapidly changing
environment, business firms have
been challenged to manage in a way that remains consistent
with their values.
∙ A host of new technologies have become part of the everyday
lives of billions of the
world’s people. Advances in the basic sciences are stimulating
extraordinary changes in
agriculture, telecommunications, transportation, and
pharmaceuticals, which have the
potential to enhance peoples’ health and quality of life.
Artificial intelligence can be
used to drive vehicles, diagnose illnesses, and manage
investments. Technology has
changed how we interact with others, bringing people closer
together through social
networking, instant messaging, and photo and video sharing.
These innovations hold
great promise. But they also raise serious ethical issues, such as
those associated with
the use of the Internet to exploit or defraud others, censor free
expression, or invade
individuals’ privacy. Businesses must learn to harness powerful
technologies for good,
while acting responsibly and ethically toward their many
stakeholders.
∙ Businesses in the United States and other nations are
transforming the employment
relationship, abandoning practices that once provided job
security and guaranteed pen-
sions in favor of highly flexible but less secure forms of
employment. The rise of the
“gig” economy has transformed many workers into self-
employed contractors. Many
jobs, including those in the service sector, are being outsourced
to the emerging econo-
mies of China, India, and other nations. As jobs shift abroad,
multinational corporations
are challenged to address their obligations to workers in far-
flung locations with very
different cultures and to respond to initiatives, like the
Responsible Business Alliance
Code of Conduct, which call for voluntary commitment to
enlightened labor standards
and human rights. The #MeToo movement has focused a
spotlight on sexual harassment
and abusive behavior in the workplace, and led to the fall of
well-known executives and
media personalities and calls for change in workplace culture.
∙ Severe weather events—hurricanes, floods, and wildfires—
have urgently focused
attention on the human impact on natural systems, prompting
both businesses and
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Preface v
law43665_fm_i-xx v 01/07/19 10:32 AM
governments to act. An emerging consensus about the causes
and risks of climate
change is leading many companies to adopt new practices, and
once again the nations
of the world have experimented with public policies designed to
limit the emissions
of greenhouse gases, most notably in the Paris Agreement.
Many businesses have
cut air pollution, curbed solid waste, and designed products and
buildings to be more
energy-efficient, saving money in the process. A better
understanding of how human
activities affect natural resources is producing a growing
understanding that economic
growth must be achieved in balance with environmental
protection if development is to
be sustainable.
∙ Many regions of the world and its nations are developing at an
extraordinary rate. Yet,
the prosperity that accompanies economic growth is not shared
equally. Access to health
care, adequate nutrition, and education remain unevenly
distributed among and within
the world’s nations, and inequalities of wealth and income have
become greater than
they have been in many years. These trends have challenged
businesses to consider the
impact of their compensation, recruitment, and professional
development practices on
the persistent—and in some cases, growing—gap between the
haves and the have-nots.
Big corporate tax cuts in the United States have required
companies to decide whether
to distribute their windfalls to their executives, shareholders,
employees, or customers;
to invest in new jobs; or to buy back stock.
∙ The opioid epidemic has focused attention on the role of drug
companies, distributors,
and pharmacies—as well as government regulators—in
contributing to the scourge of
addiction, disability, and death caused by narcotics. The
continuing pandemic of AIDS
in sub-Saharan Africa and the threat of a swine or avian flu, the
Zika virus, or another
Ebola outbreak have compelled drug makers to rethink both
their pricing policies and
their research priorities. Many businesses must consider the
delicate balance between
their intellectual property rights and the urgent demands of
public health, particularly in
the developing world.
∙ In many nations, legislators have questioned business’s
influence on politics. Business
has a legitimate role to play in the public policy process, but it
has on occasion shaded
over into undue influence and even corruption. Technology
offers candidates and politi-
cal parties new ways to reach out and inform potential voters,
but it has also created new
opportunities for manipulation of the electoral process through
deceptive messaging.
Businesses the world over are challenged to determine their
legitimate scope of influ-
ence and how to voice their interests most effectively in the
public policy process.
The new Sixteenth Edition of Business and Society addresses
this complex agenda of
issues and their impact on business and its stakeholders. It is
designed to be the required
textbook in an undergraduate or graduate course in Business and
Society; Business, Gov-
ernment, and Society; Social Issues in Management; or the
Environment of Business. It may
also be used, in whole or in part, in courses in Business Ethics
and Public Affairs Manage-
ment. This new edition of the text is also appropriate for an
undergraduate sociology course
that focuses on the role of business in society or on
contemporary issues in business.
The core argument of Business and Society is that corporations
serve a broad public
purpose: to create value for society. All companies must make a
profit for their owners.
Indeed, if they did not, they would not long survive. However,
corporations create many
other kinds of value as well. They are responsible for
professional development for their
employees, innovative new products for their customers, and
generosity to their communi-
ties. They must partner with a wide range of individuals and
groups in society to advance
collaborative goals. In our view, corporations have multiple
obligations, and all stakehold-
ers’ interests must be considered.
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vi Preface
law43665_fm_i-xx vi 01/07/19 10:32 AM
A Tradition of Excellence
Since the 1960s, when Professors Keith Davis and Robert
Blomstrom wrote the first edi-
tion of this book, Business and Society has maintained a
position of leadership by discuss-
ing central issues of corporate social performance in a form that
students and faculty have
found engaging and stimulating. The leadership of the two
founding authors, and later of
Professors William C. Frederick and James E. Post, helped
Business and Society to achieve
a consistently high standard of quality and market acceptance.
Thanks to these authors’
remarkable eye for the emerging issues that shape the
organizational, social, and public
policy environments in which students will soon live and work,
the book has added value
to the business education of many thousands of students.
Business and Society has continued through several successive
author teams to be the
market leader in its field. The current authors bring a broad
background of business and
society research, teaching, consulting, and case development to
the ongoing evolution of
the text. The new Sixteenth Edition of Business and Society
builds on its legacy of market
leadership by reexamining such central issues as the role of
business in society, the nature
of corporate responsibility and global citizenship, business
ethics practices, and the com-
plex roles of government and business in a global community.
For Instructors
For instructors, this textbook offers a complete set of
supplements.
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notes. A computerized test bank and power point slides for
every chapter are also provided.
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Preface vii
law43665_fm_i-xx vii 01/07/19 10:32 AM
Create
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The new Sixteenth Edition of the text is designed to be as
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students who wish
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x Preface
law43665_fm_i-xx x 01/07/19 10:32 AM
New for the Sixteenth Edition
Over the years, the issues addressed by Business and Society
have changed as the envi-
ronment of business itself has been transformed. This Sixteenth
Edition is no exception,
as readers will discover. Some issues have become less
compelling and others have taken
their place on the business agenda, while others have endured
through the years.
The Sixteenth Edition has been thoroughly revised and updated
to reflect the latest
theoretical work in the field and statistical data, as well as
recent events. Among the new
additions are:
∙ New discussion of theoretical advances in stakeholder theory,
corporate citizenship,
public affairs management, public and private regulation,
corporate governance,
social and environmental auditing, social investing, reputation
management, business
partnerships, supply chain codes of conduct, social
entrepreneurship, and corporate
philanthropy.
∙ Treatment of practical issues, such as social networking,
artificial intelligence and
robotics, gender diversity, political advertising and campaign
contributions, public and
media relations, well as the latest developments in the
regulatory environment in which
businesses operate.
∙ New discussion cases and full-length cases on such timely
topics as the role of busi-
ness in the unfolding opioid crisis, Wells Fargo’s unauthorized
consumer accounts, the
Volkswagen diesel emissions scandal, the aftermath of the BP
disaster in the Gulf of
Mexico, the massive Equifax data breach, the consumer boycott
of Stoli vodka, the
business response to the movement for school safety, LaFarge’s
dealings in the Syrian
war zone, the potential regulation of Facebook in the United
States and Europe, political
action by the U.S. steel industry on the issue of tariffs, the rise
of autonomous vehicles,
law enforcement access to mobile phone data, executive
misconduct at Wynn Resorts,
business response to the threat to “Dreamers,” IKEA’s
sustainable supply chain, Sales-
force’s integrated philanthropy, and social media criticism of
United Airlines.
Finally, this is a book with a vision. It is not simply a
compendium of information
and ideas. The new edition of Business and Society articulates
the view that in a global
community, where traditional buffers no longer protect business
from external change,
managers can create strategies that integrate stakeholder
interests, respect personal values,
support community development, and are implemented fairly.
Most important, businesses
can achieve these goals while also being economically
successful. Indeed, this may be the
only way to achieve economic success over the long term.
Anne T. Lawrence
James Weber
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xi
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Acknowledgments
We are grateful for the assistance of many colleagues at
universities in the United States
and abroad who over the years have helped shape this book with
their excellent suggestions
and ideas. We also note the feedback from students in our
classes and at other colleges and
universities that has helped make this book as user-friendly as
possible.
We especially wish to thank two esteemed colleagues who made
special contributions
to this edition. David M. Wasieleski, professor of management
and business ethics at
Duquesne University, led the revisions of Chapters 5 and 6, to
which he contributed his
knowledge of ethics theory and organizational practice. Vanessa
D. Hill, associate profes-
sor of management at the University of Louisiana at Lafayette,
generously shared with us
her expertise on the employment relationship and workplace
diversity and inclusion. She
was the lead author of Chapters 15 and 16, which have greatly
benefited from her insights.
For these contributions, we are most grateful.
We also wish to express our appreciation for the colleagues who
provided detailed
reviews for this edition. These reviewers were Hossein Bidgoli,
California State Uni-
versity, Bakersfield; Ryan Fehr, Foster School of Business,
University of Washington,
Seattle; Scott Jeffrey, Monmouth University; Eun-Hee Kim,
Gabelli School of Business,
Fordham University; Jet Mboga, William Paterson University;
Stephen P. Preacher, South-
ern Wesleyan University; and A. J. Stagliano, Saint Joseph’s
University. Their insights
helped guide our revision.
Thanks are also due Daniel Jacobs of Loyola Marymount
University; Samir Kumar
Barua of the Indian Institute of Management Ahmedabad and
Mahendra R. Gurarathi
of Bentley University; Grishma Shah, Janet Rovenpor, and
Musa Jafar of Manhattan
College; Robyn Linde of Rhode Island College and H. Richard
Eisenbeis of the Univer-
sity of Southern Colorado Pueblo (retired); Cynthia E. Clark of
Bentley University; and
Debra M. Staab, a freelance writer and researcher, who
contributed cases to this edition.
We are grateful to several individuals have made specific
research contributions to this
project. Denise Kleinrichert, of the Center for Ethical and
Sustainable Business Manage-
ment at San Francisco State University, provided new material
on B Corporations and
social entrepreneurship for Chapter 3, which we appreciate.
Natalie Hanna and Kelsey
Aemi of Duquesne University provided able research assistance.
Thanks are due also to
Carolyn Roose Eagle, Ben Eagle, and Nate Marsh for research
support. Emily Marsh, of
Colorbox Industries, provided graphic design services.
Debra M. Staab, in addition to authoring a case, provided
research assistance and under-
took the complex task of preparing the instructor’s resource
manual, test bank, and other
ancillary materials. Her contributions have been invaluable.
In addition, we are grateful to the many colleagues who over the
years have gener-
ously shared with us their insights into the theory and pedagogy
of business and soci-
ety. In particular, we would like to thank Cynthia E. Clark and
Jill Brown of Bentley
University; Shawn Berman, Harry J. Van Buren III, Natalia
Vidal, and Garima Sharma
of the University of New Mexico; Anke Arnaud of Embry
Riddle Aeronautical Univer-
sity; Jennifer J. Griffin of Loyola University of Chicago;
Ronald M. Roman, Asbjorn
Osland, Thomas Altura, and Matthew Maguire of San José State
University; Heather
Elms of American University; Joseph A. Petrick of Wright State
University; Kathleen
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law43665_fm_i-xx xii 01/07/19 10:32 AM
xii Acknowledgments
Rehbein of Marquette University; Judith Schrempf-Stirling of
the University of Geneva;
Michelle Westermann-Behaylo of the University of Amsterdam;
Diane Swanson and
Bernie Hayen of Kansas State University; Cynthia M. Orms of
Georgia College & State
University; Ali Al-Kazemi of Kuwait University; Sandra
Waddock of Boston College;
Mary C. Gentile of the University of Virginia Darden School of
Business; Michael E.
Johnson-Cramer and Jamie Hendry of Bucknell University; John
Mahon and Stephanie
Welcomer of the University of Maine; Bradley Agle of Brigham
Young University;
Gina Vega of Merrimack College; Craig Dunn and Brian Burton
of Western Washington
University; Lori V. Ryan of San Diego State University; Bryan
W. Husted of EGADE
Business School Monterrey; Sharon Livesey of Fordham
University; Barry Mitnick of
the University of Pittsburgh; Virginia Gerde of Furman
University; Matthew Drake of
Duquesne University; Robbin Derry of the University of
Lethbridge; Jerry Calton of
the University of Hawaii-Hilo; Linda Klebe Treviño of
Pennsylvania State University;
Mary Meisenhelter of York College of Pennsylvania; Amy
Hillman and Gerald Keim
of Arizona State University; Barbara Altman of Texas A&M
University Central Texas;
Randall Harris of Texas A&M University Corpus Christi;
Richard Wokutch of Virginia
Tech University; Dawn Elm of University of St. Thomas; Lynda
Brown of the Univer-
sity of Montana; Kathleen A. Getz of Loyola University –
Maryland; Gordon P. Rands
of Western Illinois University; Paul S. Adler of the University
of Southern California;
Linda C. Rodriguez of the University of South Carolina Aiken;
Emmanuel Raufflet
of HEC Montreal; Bruce Paton of Menlo College; Smita
Trivedi, Tom E. Thomas,
Geoffrey Desa, and Murray Silverman (retired), of San
Francisco State University; Jacob
Park of Green Mountain College; Armand Gilinsky of Sonoma
State University; and
Tara Ceranic Salinas of the University of San Diego.
These scholars’ dedication to the creative teaching of business
and society has been a
continuing inspiration to us.
We wish to express our appreciation to James E. Post, a former
author of this book, who
has continued to offer valuable intellectual guidance to this
project. We also wish to note,
with sadness and gratitude, the passing of our mentor and a
former author of this book,
William C. Frederick, in 2018. His ideas live on in this …
Chapter 6
Organizational Ethics
©2020 McGraw-Hill Education. All rights reserved. Authorized
only for instructor use in the classroom. No reproduction or
further distribution permitted without the prior written consent
of McGraw-Hill Education.
Copyright © 2017 McGraw-Hill Education. All rights reserved.
No reproduction or distribution without the prior written
consent of McGraw-Hill Education.
©2020 McGraw-Hill Education.
Ch. 6:Key Learning Objectives
6-1 Classifying an organization’s culture and ethical climate.
6-2 Recognizing ethics challenges across the multiple functions
of business.
6-3 Creating effective ethics policies and identifying
responsible individuals to become the organization’s ethics and
compliance officer.
6-4 Constructing successful ethics reporting mechanisms, ethics
training programs, and similar safeguards.
6-5 Understanding how to conduct business ethically in the
global marketplace.
©2020 McGraw-Hill Education.
6-‹#›
©2020 McGraw-Hill Education.
2
Corporate Culture and Ethical Climates1
Corporate culture: A blend of ideas, customs, traditional
practices, company values, and shared meanings.
To help define normal behavior for everyone who works in a
company.
Nearly twice as many employees observe misconduct by
coworkers in weak ethical cultures companies.
©2020 McGraw-Hill Education.
6-‹#›
©2020 McGraw-Hill Education.
Corporate Culture and Ethical Climates2
Ethical climate: The unspoken understanding among employees
of what is and is not acceptable behavior.
Based on the expected standards and norms.
Multiple climates (or subclimates) can exist within one
organization.
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4
The Components of Ethical Climates
From Figure 6.1
Copyright © McGraw-Hill Education. Permission required for
reproduction or display.Ethical CriteriaFocus of Individual
PersonOrganizationSocietyEgoism (self-centered
approach)Self-interestCompany interestEconomic
efficiencyBenevolence (concern for-others
approach)FriendshipTeam interestSocial responsibilityPrinciple
(integrity
approach)Personal moralityCompany rules and proceduresLaws
and professional codes
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5
Business Ethics Across Organizational Functions
Business operations can be highly specialized, leading to ethical
challenges related to those functional areas.
Professional ethical standards may conflict with the ethical
standards within the organization.
Accounting Ethics
Financial Ethics
Marketing Ethics
Information Technology Ethics
Supply Chain Ethics
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6
Accounting Ethics
Critically important component of every business firm.
Financial records must be audited by a certified professional
accounting firm.
Requirements of the accounting function:
Responsibilities.
Public interest.
Integrity.
Objectivity and independence.
Due care.
Conflict of interest
Conflict with self-interest (of the accounting firm) and the
interests of others (shareholders and the public).
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Financial Ethics
Responsibilities to manage the firm’s assets and raising capital.
Example of ethical issues:
Barclays PLC was accused of fraud.
The Royal Bank of Scotland scandal.
Self-regulation as the best path for ethical compliance.
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8
Marketing Ethics
Marketing: advertising, distributing, and selling products or
services.
Issues in marketing ethics emphasize honesty and transparency
in advertising.
Example: Outcome Health misled their customers.
American Marketing Association (AMA) code of ethics:
Do no harm.
Foster trust.
Embrace ethical values.
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9
Information Technology Ethics
Ethical challenges in this field involve:
Invasions of privacy.
The collection and storage of, and access to, personal and
business information.
Confidentiality of electronic mail communication.
Copyright protection regarding software, music, and intellectual
property.
Cyberbullying.
without parental consent.
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10
Supply Chain Ethics
Supply Chain: production and operations functions needed to
create a product or service.
Issues in supply chain ethics emphasize integrity, value and
loyalty in business dealings.
Example: Kobe Steel Limited misled their customers.
Institute for Supply Management (ISM) principles and
standards:
Avoid impropriety.
Be responsible.
Protect confidentiality.
Follow the law.
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11
Building Ethics Safeguard
Into the Company
To improve the quality of a company’s ethical performance you
have to change the culture so that ethics is part of everyday
decision-making.
To do so means institutionalizing ethics or building ethics
safeguards in to everyday routines.
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Organizations’ Ethics Safeguards
Percentage of Firms Reporting They Have Ethical Safeguards
Figure 6.2
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13
Two Ethics Approaches
Compliance-based approach:
Seeks to avoid legal sanctions.
Emphasizes the threat of detection and punishment.
Integrity-based approach:
Combines concern for law with employee responsibility.
Promotes acting with integrity and conduct business with
honesty and fairness.
Both approaches have been found to lessen unethical conduct,
but in somewhat different ways.
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Ethics Programs and Policies1
Top Management Commitment and Involvement:
Critical to fostering employee ethical behavior.
Ethics Policies or Codes:
As a guidance to managers and employees to solve ethical
dilemma.
In U.S. policies tend to be instrumental, providing rules and
procedures.
In Japan policies tend to be combination of legal compliance
and company values.
Ethics programs must be widely distributed and associated with
ethics training.
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15
Ethics Programs and Policies2
Ethics and Compliance Officers:
Many created as early as the 1980s.
Membership in professional association, Ethics and Compliance
Officers Association (ECOA), doubled between 2000 and 2004.
Recently ECOA and Ethics Resource Center merged into the
Ethics Compliance Alliance.
Ethics Reporting Mechanisms:
Often called the “helpline” or “hotline.”
Purposes:
To provide interpretations of proper ethical behavior.
To create avenue for reporting unethical conduct.
To provide information-sharing tools for employees and
stakeholders.
Executives tend to use the helpline more often than middle
managers.
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16
Ethics Programs and Policies3
Ethics Training Programs:
Generally the most expensive and time-consuming element of an
ethics program.
Found regularly in larger business organizations.
Small and medium businesses are more likely to offer training
in alignment with regulatory guidelines.
Example: “Giving Voice to Values” program.
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17
Ethics Programs and Policies4
Objectives and Motivations for Employee Ethics Training
Programs
Figure 6.3
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18
The World’s Most Ethical Companies
Forbes Magazine’s most ethical companies and their industries
From Figure 6.4
Copyright © McGraw-Hill Education. Permission required for
reproduction or display.These firms were ranked among the
highest ethical firms each year from 2007 through
2017.AFLACInsuranceDeere and CompanyIndustrial
manufacturingEcolabChemicalsFluor
CorporationEngineeringGeneral ElectricDiversifiedInternational
PaperPaper productsKao CorporationConsumer
productsMilliken & CompanyIndustrial
manufacturingPepsiCoFood & beverageStarbucks Coffee
CompanyRestaurantsTexas
InstrumentsComputersUPSTransportationXeroxComputers
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19
Ethics in a Global Economy
Doing business in global context brings up host of complex
ethical challenges.
Bribery: a questionable or unjust payment often to a government
official to ensure or facilitate a business transaction.
International watchdog agency, Transparency International,
publishes a survey of countries’ levels of corruption.
Bribe-taking more likely in countries with low per capita
income, low salaries for government officials, and less income
variation.
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Efforts to Curtail Unethical Practices
Dow Jones Anti-Corruption Survey
Seventy-one percent of respondents stopped or delayed business
dealings with corrupt partners.
Numerous efforts to prohibit bribery:
U.S. Foreign -Corrupt Practices Act (FCPA).
The United Kingdom’s Bribery Act prohibits bribery.
Anti-Bribery Law in Brazil, India and Mexico.
Organization’s culture and ethical work climate play a central
role in encouraging employees to act ethically.
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End of Main Content
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22
Accessibility Content:
Text Alternatives for Images
©2020 McGraw-Hill Education.
Organizations’ Ethics Safeguards
Text Alternative
The y-axis has six markings. From the bottom to the top, they
read 0 percent, 20 percent, 40 percent, 60 percent, 80 percent,
and 100 percent.
The x-axis contains four markings. From the left to the right,
they read developed code of ethics, offered ethics training,
created ethics office or officer, and established ethics hotline.
Horizontal bars arise from four different points along the x-
axis. These bars extend upward representing percentages on the
y-axis.
The data on the graphs reads as follows:
According to the center for business ethics, 1986 and 1992,
approximately 90 percent of companies developed a code of
ethics. Approximately 85 percent of companies developed their
code of ethics according to the ethics resource center, 2005.
According to Weber and Wasieleski, 2013, approximately 99
percent companies developed their code of ethics.
According to the center for business ethics, 1986,
approximately 45 percent companies offered ethics training.
According to the center for business ethics, 1992,
approximately 50 percent companies offered ethics training.
According to the ethics resource center, 1994, approximately 35
percent companies offered ethics training. According to the
ethics resource center, 2005, approximately 70 percent
companies offered ethics training. According to Weber and
Wasieleski, 2013, approximately 99 percent companies offered
ethics training.
According to the ethics resource center, 1994, approximately 35
percent companies created ethics offices or appointed ethics
officers. According to the ethics resource center, 2005,
approximately 64 percent companies created ethics offices or
appointed ethics officers. According to Weber and Wasieleski,
2013, 100 percent companies created ethics offices or appointed
ethics officers.
According to the ethics resource center, 2005, approximately 75
percent companies established an ethics hotline. According to
Weber and Wasieleski, 2013, approximately 95 percent
companies established an ethics hotline.
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24
Ethics Programs and Policies4
Text Alternative
The x-axis has eight markers indicating percentages labeled as
follows: 0; 10; 20; 30; 40; 50; 60; and 70.
The y-axis lists ten reasons why companies create ethics
training programs. Horizontal bars extend from the y-axis
according to their respective percentages.
From the bottom to the top, the data reads as follows:
Establish strong legal defense fund at 8 percent.
Improving training effectiveness by deploying courses that are
higher quality at 13 percent;
Reinforce tone at the top at 14 percent.
Improve the skills of senior leaders and managers at 14 percent.
Keep information secure and protected at 20 percent.
Meet audit or certification requirements at 21 percent.
Prevent future issues or misconduct at 39 percent.
Improve employee understanding of compliance priorities and
obligations at 47 percent;
Create a culture of ethics and respect at 57 percent.
And, the most common reason for ethics training was to comply
with laws and regulations at 59 percent.
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25
Chapter 5
Ethics and Ethical Reasoning
Copyright ©2020 McGraw-Hill Education. All rights reserved.
Authorized only for instructor use in the classroom. No
reproduction or further distribution permitted without the prior
written consent of McGraw-Hill Education.
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Chapter 2 - Managing Public Issues and Stakeholder
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1
Ch. 5:Key Learning Objectives
5-1 Defining ethics and business ethics.
5-2 Evaluating why businesses should be ethical.
5-3 Knowing why ethical problems occur in business.
5-4 Identifying managerial values and people’s spirituality as
influences on ethical decision making.
5-5 Understanding stages of moral reasoning.
5-6 Analyzing ethical problems using generally accepted ethics
theories.
5-7 Understanding how moral intensity affects ethical decision-
making.
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Chapter 2 - Managing Public Issues and Stakeholder
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2
The Meaning of Ethics
Ethics:
A conception of right and wrong conduct.
Tells us whether our behavior is moral or immoral.
Deals with fundamental human relationships—how we think and
behave toward others and want them to think and behave toward
us.
Ethical Principles:
Guides to moral behavior.
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Sources of Ethics
Notions of right and wrong come from many sources:
Religious beliefs.
Family institution.
Education.
Community/neighborhood.
Media influences.
Acts as a moral compass to guide an individual when ethical
dilemmas arise.
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Ethical Relativism
Concept which holds that ethical behavior should be defined by
various periods in time in history, a society’s traditions, the
special circumstances of the moment, or personal opinion.
Relative to time, place, circumstance, and the person’s
involved.
No universal ethical standards.
Depends on how you frame the issue and which lens you look
through.
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5
Are Ethics the Same as Laws?
Laws: society’s formal written rules about what constitutes
right and wrong conduct in various spheres of life.
Ethical concepts are more complex than written rules of law.
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Chapter 2 - Managing Public Issues and Stakeholder
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Business Ethics
Business Ethics: the application of general ethical ideas to
business behavior.
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Chapter 2 - Managing Public Issues and Stakeholder
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Misconduct at Work
The Ethics and Compliance Initiative: since 2000 about half of
all employees surveyed reported ongoing observations of
unethical behavior at work.
In 2017, the most common unethical practice was lying to
employees and external stakeholders.
Other unethical practices included abusive behavior, Internet
abuse, conflicts of interest, and health violations.
The Institute for Leadership and Management reported that 63
percent of managers expected to act unethically at some point in
their careers.
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Why Business Should be Ethical?
From Figure 5.1
to be EthicalTo enhance business performance.To comply with
legal requirements.To prevent or minimize harm.To meet
demands of business stakeholders.To promote personal
morality.
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Chapter 2 - Managing Public Issues and Stakeholder
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9
Five Key Reasons
Business Should Be Ethical1
1.To enhance business performance.
Research shows strong link between ethics and financial
performance.
Ethical actions can directly affect their organization’s bottom
line.
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Chapter 2 - Managing Public Issues and Stakeholder
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JW: I assume there is a standard font size for text but this just
seemed a little small to me. Same issue with later slides – ok to
leave as is if there is a standard here.
DS: I bumped it up a little bit but this size seems to be pretty
standard. Plus it turned out to be a lot of work since almost all
slides were this orginal size.
10
The World’s Most Ethical Index versus
S&P 500 and FTSE 100, 2006–2017
Figure 5.2
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11
Five Key Reasons
Business Should Be Ethical2
2.To comply with legal requirements.
Two legal requirements provide direction for companies
interested in being more ethical in their business operations:
U.S. Corporate Sentencing Guidelines.
Sarbanes-Oxley Act of 2002.
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Chapter 2 - Managing Public Issues and Stakeholder
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12
U.S. Corporate Sentencing Guidelines
Establish standards and procedures to reduce criminal conduct.
Assign high-level officer(s) responsibility for compliance.
Not assign discretionary authority to “risky” individuals.
Effectively communicate standards and procedures through
training.
Take reasonable steps to ensure compliance—monitor and audit
systems, maintain and publicize reporting systems.
Enforce standards and procedures through disciplinary
mechanisms.
Following detection of offense, respond appropriately and
prevent reoccurrence.
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Sarbanes-Oxley Act of 2002
Born from the ethics scandals at Enron, WorldCom, Tyco and
others.
Seeks to ensure that firms maintain high ethical standards.
How they conduct and monitor business operations.
Requires executives to:
Vouch for the accuracy of a firm’s financial reports.
Pay back bonuses based on earnings that are later proved
fraudulent.
Established strict rules for auditing firms.
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Five Key Reasons
Business Should Be Ethical3
3.To prevent or minimize harm.
Overriding principle that business should “do no harm.”
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Chapter 2 - Managing Public Issues and Stakeholder
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Five Key Reasons
Business Should Be Ethical4
4.To meet demands of business stakeholders.
Consumers are more inclined to purchase the products.
Signaling a long-term concern for all stakeholders; a better
economic performance.
Gain the trust from the investors.
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Chapter 2 - Managing Public Issues and Stakeholder
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16
Five Key Reasons
Business Should Be Ethical5
5.To promote personal morality.
Knowing one works in a supportive ethical climate contributes
to sense of psychological security.
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17
Why Ethical Problems Occur in Business1
Four Primary Reasons:
Personal gain and selfish interest.
Competitive pressure on profits.
Conflicts of interest.
Cross-cultural contradictions.
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Chapter 2 - Managing Public Issues and Stakeholder
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Is this OK?
18
Why Ethical Problems Occur in Business2
Figure 5.3
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19
Core Elements of Ethical Character:
Managers’Values
Serve as models for others who work at the company.
New CEOs tend to be more self-interested and short-term
focused.
Recent study: today’s managers place slightly more importance
on moral values > competency values.
The challenge for many moral managers is acting effectively on
their beliefs in the day-to-day life of their organizations.
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20
Core Elements of Ethical Character:
Spirituality in the Workplace
Personal belief in a supreme being, religious organization,
power of nature or some other life-guiding force.
Organizations accommodate their employees to meet their
spiritual and religious needs.
Opponents of spirituality at work argue to keep spirituality out
of the workplace.
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21
Core Elements of Ethical Character:
Manager’s Moral Development1
Stages of Moral Development:
From childhood to mature adulthood people move up in their
moral reasoning
Stage 1: Earliest stages of reasoning are ego-centered
Stage 2: “I’ll let you play with my toy, if I can play with yours”
Stage 3: Learn the give-and-take
Stage 4: Able to focus their reasoning according to law
Stage 5: Apply their moral beliefs above and beyond specific
social custom
Stage 6: Emphasize ethical reasoning using broad principles and
relationships
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Chapter 2 - Managing Public Issues and Stakeholder
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Core Elements of Ethical Character:
Manager’s Moral Development2
Most managers make decisions based on criteria in levels three
and four.
Senior leaders often demonstrate higher stages of moral
reasoning than typical managers.
Company executives’ reasoning has wide implications both
inside and outside the organization.
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Stages of Moral Development and
Ethics Reasoning
Figure 5.4
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24
Analyzing Ethical Dilemmas in Business
A set of decision guidelines that will aid thinking process when
on-the-job ethics issues occur.
These guidelines should help them:
Identify and analyze the nature of an ethical problem.
Decide which course of action is likely to produce an ethical
result.
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Four Methods of Ethical Reasoning
Figure 5.5
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26
Virtue Ethics: Pursuing a “Good” Life
Virtue Ethics: Character traits that a good person should posses,
theorizing that moral values will direct the person toward good
behavior.
Virtue ethics is not a thoroughly developed ethical system of
rules and guidelines, but rather a system of values that form
good character.
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List of Moral Values Across Time
Figure 5.6
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Utility: Comparing Benefits and Costs
Utilitarian reasoning: overall amount of good that can be
produced by an action or a decision.
Compare benefits and costs of a decision, policy or action.
Costs and benefits can be economic, social or human.
Drawbacks:
The difficulty of accurately measuring both costs and benefits.
The majority may override the rights of those in the minority.
Benefits
Costs
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Rights: Determining and Protecting Entitlements
Human Rights: Person or group is entitled to something or to be
treated in a certain way.
Examples of basic human rights are right to life, safety, and due
process.
Limitations:
The difficulty of balancing conflicting rights.
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Justice: Is It Fair?
Justice: benefits and burdens are distributed equally, according
to some accepted rule.
Social Justice: society’s income and wealth are distributed
among the people in fair proportions.
Fair shares will vary from person to person and group to group.
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Applying Ethical Reasoning
to Business Activities
Once the ethical analysis is complete, the decision maker should
ask the question:
Do all of the above ethics approaches lead to the same decision?
If all the answers are “Yes”, the proposed action is ethical.
If all the answers are “No”, the action is not ethical and needs
to be reconsidered.
If “Yes” and “No” answers are mixed, you must decide which
takes priority.
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The Moral Intensity of an Ethical Issue
Moral Intensity: One concept for determining the ethicality or
morality of a situation.
Moral intensity is the extent of the issue-related moral
imperative in a situation.
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33
Moral Intensity: Five Dimensions
Magnitude of consequences.
Proximity.
Social consensus.
Probability of effect.
Temporal immediacy.
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Moral Intensity: Dimensions Defined1
Magnitude of Consequences: the sum of the harms/benefits done
to the victims/beneficiaries of the moral act.
Found to be the most powerful dimension.
Proximity: The feeling of nearness (social, psychological,
physical) that the moral act has for the victims/beneficiaries.
Found to be a powerful dimension.
Social Consensus: The degree of social agreement that a
proposed act is evil/good.
Seems to be more like “social concern”.
Found to be a powerful dimension.
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Moral Intensity: Dimensions Defined2
Probability of Effect: Probability that the act will take place and
the act will cause the harm/benefit predicted.
Found to be a powerful dimension.
Temporal Immediacy: length of time between the present and
the onset of the consequences.
NOT found to be the most powerful dimension.
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End of Main Content
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Accessibility Content:
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The World’s Most Ethical Index versus S&P 500 and FTSE 100,
2006–2017 Text Alternative
The x-axis contains seven markings. From the left to the right,
they read 2006, 2008, 2010, 2012, 2014, and 2016.
The y-axis contains ten percentage markings. From the bottom
to the top, they read minus 20 percent, minus 10 percent, 0
percent, 10 percent, 20 percent, 30 percent, 40 percent, 50
percent, 60 percent, and 70 percent.
All three indices begin at 0 percent in the year 2006.
In the world’s most ethical index, the line rises steeply to
approximately 21 percent in the year 2006, peaking at 57
percent in 2008, and drops to 43 percent in 2010. There is a
steep downfall to 16 percent in 2012. The line then rises to 22
percent in 2014 only to decline again to 16 percent in 2016.
In the FTSE 100 index, the line rises to 18 percent in the year
2006 and it rises gradually to approximately 19 percent in 2008.
In 2010, the line drops significantly to 4 percent. A slight
uptick to 6 percent occurs in 2012. In 2014 the index drops to
minus 3 percent. By 2016, the index rose to 14 percent.
In the S and P 500 index, the line rises to 8 percent in the year
2006 and continues to increase to 17 percent in 2008. In 2010,
the line dips to minus 12 percent. In 2012, there is a steep jump
to 13 percent. In 2014, there is a slow decrease to 11 percent.
By 2016 the index fell to 9 percent.
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Why Ethical Problems Occur in Business2Text Alternative
It contains four columns and five rows. Column 1 is titled
reason, column 2 is titled nature of ethical problem, column 3 is
titled typical approach, and column 4 is titled attitude.
In row 2, column 1 reads personal gain and selfish interest,
column 2 reads selfish interest versus others’ interests, column
3 reads egotistical mentality, and column 4 reads I want it.
In row 3, column 1 reads competitive pressures on profits,
column 2 reads firm’s interest versus others’ interests, column 3
reads bottom-line mentality, and column 4 reads we have to beat
the others at all costs.
In row 4, column 1 reads conflicts of interest, column 2 reads
multiple obligations or loyalties, column 3 reads favoritism
mentality, and column 4 reads help yourself and those closest to
you.
In row 5, column 1 reads cross-cultural contradictions, column
2 reads company’s interests versus diverse cultural traditions
and values, column 3 reads ethnocentric mentality, and column
4 reads foreigners have a funny notion of what’s right and
wrong.
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Stages of Moral Development and Ethics Reasoning Text
Alternative
It contains three columns and seven rows.
Column 1 is titled age group, column 2 is titled development
stage and major ethics referent, and column 3 reads basis of
ethics reasoning.
In row 2, column 1 reads mature adulthood. Column 2 reads
stage 6 universal principles: justice, fairness, and universal
human rights. Column 3 reads principle-centered reasoning.
In row 3, column 1 reads mature adulthood. Column 2 reads
stage 5 moral beliefs above and beyond specific social custom:
human rights, social contract, and broad constitutional
principles. Column 3 reads principle-centered reasoning.
In row 4, column 1 reads adulthood. Column 2 reads stage 4
society at large: customs, traditions, and laws. Column 3 reads
society- and law-centered reasoning.
In row 5, column 1 reads early adulthood, adolescence. Column
2 reads stage 3 social groups: friends, school, coworkers, and
family. Column 3 reads group-centered reasoning.
In row 6, column 1 reads adolescence, youth. Column 2 reads
stage 2 reward seeking: self-interest, own needs, reciprocity.
Column 3 reads ego-centered reasoning.
In row 7, column 1 reads childhood. Column 2 reads stage 1
punishment avoidance: avoid harm, obedience to power. Column
3 reads ego-centered reasoning.
Return to slide containing original image.
5-‹#›
©20XX McGraw-Hill Education.
Chapter 2 - Managing Public Issues and Stakeholder
Relationships
41
Four Methods of Ethical Reasoning Text Alternative
It has four columns and five rows. Column 1 is titled method,
column 2 is titled critical determining factor, column 3 is titled
an action is ethical when…, and column 4 is titled limitations.
In row 2, column 1 reads virtues, column 2 reads values and
character, column 3 reads it aligns with good character, and
column 4 reads subjective or incomplete set of good virtues.
In row 3, column 1 reads utilitarian, column 2 reads comparing
benefits and costs, column 3 reads net benefits exceed net costs,
and column 4 reads difficult to measure some human and social
costs; majority may disregard rights of the minority.
In row 4, column 1 reads rights, column 2 reads respecting
entitlements, column 3 reads basic human rights are respected,
and column 4 reads difficult to balance conflicting rights.
In row 5, column 1 reads justice, column 2 reads distributing
fair shares, column 3 reads benefits and costs are fairly
distributed, and column 4 reads difficult to measure benefits
and costs; lack of agreement on fair shares.
Return to slide containing original image.
5-‹#›
©20XX McGraw-Hill Education.
Chapter 2 - Managing Public Issues and Stakeholder
Relationships
42
List of Moral Values Across Time Text Alternative
Column 1 is titled Plato and Aristotle, 4th century BC. There
are ten points listed under this heading. They read as follows:
Courage.
Self-control.
Generosity.
Magnificence.
High-mindedness.
Gentleness.
Friendliness.
Truthfulness.
Wittiness.
Modesty.
Column 2 is titled Saint Thomas Aquinas, 1225 to 1274. There
are eight points listed under this heading. They read as follows:
Faith.
Hope.
Charity.
Prudence.
Justice.
Temperance.
Fortitude.
Humility.
Column 3 is titled Benjamin Franklin, 1706 to 1790. There are
five points listed under this heading. They read as follows:
Cleanliness.
Silence.
Industry.
Punctuality.
Frugality.
Column 4 is titled Robert Solomon 1942 to 2007. There are
three points listed under this heading. They read as follows:
Honesty.
Trust.
Toughness.
Return to slide containing original image.
5-‹#›
©20XX McGraw-Hill Education.
Chapter 2 - Managing Public Issues and Stakeholder
Relationships
43

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1. Using the guidelines provided in this weeks chapter (and other.docx

  • 1. 1. Using the guidelines provided in this week's chapter (and other resources as needed), create a step-by-step IT security policy for handling user accounts/rights for a student who is leaving prematurely (drops, is expelled, and so on). 2. You will need to consider specialized student scenarios, such as a student who works as an assistant to a faculty member or as a lab assistant in a computer lab and may have access to resources most students do not. 3. Write your answer using a WORD document. Do your own work. Submit here. Note your Safe Assign score. Score must be less than 25 for full credit. You have three attempts. law43665_fm_i-xx i 01/07/19 10:32 AM Stakeholders, Ethics, Public Policy Sixteenth Edition Anne T. Lawrence San José State University James Weber Duquesne University Business and Society Final PDF to printer
  • 2. law43665_fm_i-xx ii 01/07/19 10:32 AM BUSINESS AND SOCIETY: STAKEHOLDERS, ETHICS, PUBLIC POLICY, SIXTEENTH EDITION Published by McGraw-Hill Education, 2 Penn Plaza, New York, NY 10121. Copyright © 2020 by McGraw-Hill Education. All rights reserved. Printed in the United States of America. Previous editions © 2017, 2014, and 2011. No part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without the prior written consent of McGraw-Hill Education, including, but not limited to, in any network or other electronic storage or transmission, or broadcast for distance learning. Some ancillaries, including electronic and print components, may not be available to customers outside the United States. This book is printed on acid-free paper. 1 2 3 4 5 6 7 8 9 LWI 21 20 19 ISBN 978-1-260-04366-2 (bound edition) MHID 1-260-04366-5 (bound edition) ISBN 978-1-260-14049-1 (loose-leaf edition) MHID 1-260-14049-0 (loose-leaf edition) Portfolio Manager: Laura Hurst Spell Marketing Manager: Lisa Granger Content Project Managers: Jeni McAtee, Katie Reuter Buyer: Susan K. Culbertson
  • 3. Design: Jessica Cuevas Content Licensing Specialist: Traci Vaske Cover Image: ©View Apart/Shutterstock Compositor: SPi Global All credits appearing on page or at the end of the book are considered to be an extension of the copyright page. Library of Congress Cataloging-in-Publication Data Names: Lawrence, Anne T., author. | Weber, James (Business ethics professor), author. Title: Business and society: stakeholders, ethics, public policy / Anne T. Lawrence, San Jose State University, James Weber, Duquesne University. Description: Sixteenth edition. | New York, NY : McGraw-Hill Education, [2020] Identifiers: LCCN 2018052591 | ISBN 9781260043662 (alk. paper) | ISBN 1260043665 (bound edition) | ISBN 9781260140491 (loose- leaf edition) | ISBN 1260140490 (loose-leaf edition) Subjects: LCSH: Social responsibility of business. Classification: LCC HD60 .F72 2020 | DDC 658.4/08—dc23 LC record available at https://lccn.loc .gov/2018052591 The Internet addresses listed in the text were accurate at the time of publication. The inclusion of a website does not indicate an endorsement by the authors or McGraw-Hill Education, and McGraw-Hill Education does not guarantee the accuracy of the information presented at these sites. mheducation.com/highered
  • 4. Final PDF to printer iii law43665_fm_i-xx iii 01/07/19 10:32 AM Anne T. Lawrence San José State University Anne T. Lawrence is professor of management emerita at San José State University. She holds a Ph.D. from the University of California, Berkeley, and completed two years of post- doctoral study at Stanford University. Her articles, cases, and reviews have appeared in many journals, including the Academy of Management Review, Administrative Science Quarterly, Case Research Journal, Journal of Management Education, California Management Review, Business and Society Review, Research in Corporate Social Performance and Policy, and Journal of Corporate Citizenship. Her cases in business and society have been reprinted in many textbooks and anthologies. She has served as guest editor of the Case Research Journal. She served as president of both the North American Case Research Association (NACRA) and of the Western Casewriters Association and is a Fellow of NACRA, from which she received a Distinguished Contributor Award in 2014. She received the Emerson Center Award for Outstanding Case in Business Ethics (2004) and the Curtis E. Tate Award for Outstanding Case of the Year (1998, 2009, and 2015). At San José State University,
  • 5. she was named Outstanding Professor of the Year in 2005. In 2015, she received a Master Teacher in Ethics Award from The Wheatley Institution at Brigham Young University. She currently serves as chair of the board of the Case Research Foundation. James Weber Duquesne University James Weber is a professor of management and business ethics at Duquesne University, where he also serves as the managing director of the Institute for Ethics in Business. He holds a Ph.D. from the University of Pittsburgh and has taught at the University of San Francisco, University of Pittsburgh, and Marquette University. His areas of interest and research include personal, managerial, and organizational values and cognitive moral reasoning. His work has appeared in Organization Science, Human Relations, Business & Society, Journal of Business Ethics, and Business Ethics Quarterly. He received the SIM Sumner Marcus Award for lifetime contribution to the Social Issues in Management division of the Academy of Management in 2013 and the Best Reviewer Award from Business & Society in 2015. He was recognized by the Social Issues in Management divi- sion with the Best Paper Award in 1989 and 1994 and received the Best Article Award from the International Association for Business and Society in 1998. He has served as division and program chair of the Social Issues in Management division of the Academy of Management. He has also served as president and program chair of the International
  • 6. Association of Business and Society (IABS). About the Authors Final PDF to printer iv law43665_fm_i-xx iv 01/07/19 10:32 AM Preface In a world economy that is becoming increasingly integrated and interdependent, the rela- tionship between business and society is becoming ever more complex. The globaliza- tion of business, the emergence of civil society organizations in many nations, and rapidly changing government regulations and international agreements have significantly altered the job of managers and the nature of strategic decision making within the firm. At no time has business faced greater public scrutiny or more urgent demands to act in an ethical and socially responsible manner than at the present. Consider the following: ∙ The rise of populist and nationalist political leaders in the United States and parts of Europe and the Middle East have led to renewed debates on the proper role of govern- ment in regulating business and protecting stakeholders. As environmental, financial, employment, and consumer regulations have been rolled back,
  • 7. particularly in the United States, businesses have had to choose whether to take advantage of loosened rules or to follow a strategy of voluntary corporate responsibility. Long- standing trade relationships have been upended by tariffs and other barriers on imports, helping some businesses and hurting others. Changing immigration policy has required firms to rethink their policies toward their foreign-born workers, including so-called Dreamers brought to the United States illegally as children. In this rapidly changing environment, business firms have been challenged to manage in a way that remains consistent with their values. ∙ A host of new technologies have become part of the everyday lives of billions of the world’s people. Advances in the basic sciences are stimulating extraordinary changes in agriculture, telecommunications, transportation, and pharmaceuticals, which have the potential to enhance peoples’ health and quality of life. Artificial intelligence can be used to drive vehicles, diagnose illnesses, and manage investments. Technology has changed how we interact with others, bringing people closer together through social networking, instant messaging, and photo and video sharing. These innovations hold great promise. But they also raise serious ethical issues, such as those associated with the use of the Internet to exploit or defraud others, censor free expression, or invade individuals’ privacy. Businesses must learn to harness powerful technologies for good,
  • 8. while acting responsibly and ethically toward their many stakeholders. ∙ Businesses in the United States and other nations are transforming the employment relationship, abandoning practices that once provided job security and guaranteed pen- sions in favor of highly flexible but less secure forms of employment. The rise of the “gig” economy has transformed many workers into self- employed contractors. Many jobs, including those in the service sector, are being outsourced to the emerging econo- mies of China, India, and other nations. As jobs shift abroad, multinational corporations are challenged to address their obligations to workers in far- flung locations with very different cultures and to respond to initiatives, like the Responsible Business Alliance Code of Conduct, which call for voluntary commitment to enlightened labor standards and human rights. The #MeToo movement has focused a spotlight on sexual harassment and abusive behavior in the workplace, and led to the fall of well-known executives and media personalities and calls for change in workplace culture. ∙ Severe weather events—hurricanes, floods, and wildfires— have urgently focused attention on the human impact on natural systems, prompting both businesses and Final PDF to printer
  • 9. Preface v law43665_fm_i-xx v 01/07/19 10:32 AM governments to act. An emerging consensus about the causes and risks of climate change is leading many companies to adopt new practices, and once again the nations of the world have experimented with public policies designed to limit the emissions of greenhouse gases, most notably in the Paris Agreement. Many businesses have cut air pollution, curbed solid waste, and designed products and buildings to be more energy-efficient, saving money in the process. A better understanding of how human activities affect natural resources is producing a growing understanding that economic growth must be achieved in balance with environmental protection if development is to be sustainable. ∙ Many regions of the world and its nations are developing at an extraordinary rate. Yet, the prosperity that accompanies economic growth is not shared equally. Access to health care, adequate nutrition, and education remain unevenly distributed among and within the world’s nations, and inequalities of wealth and income have become greater than they have been in many years. These trends have challenged businesses to consider the impact of their compensation, recruitment, and professional development practices on the persistent—and in some cases, growing—gap between the haves and the have-nots.
  • 10. Big corporate tax cuts in the United States have required companies to decide whether to distribute their windfalls to their executives, shareholders, employees, or customers; to invest in new jobs; or to buy back stock. ∙ The opioid epidemic has focused attention on the role of drug companies, distributors, and pharmacies—as well as government regulators—in contributing to the scourge of addiction, disability, and death caused by narcotics. The continuing pandemic of AIDS in sub-Saharan Africa and the threat of a swine or avian flu, the Zika virus, or another Ebola outbreak have compelled drug makers to rethink both their pricing policies and their research priorities. Many businesses must consider the delicate balance between their intellectual property rights and the urgent demands of public health, particularly in the developing world. ∙ In many nations, legislators have questioned business’s influence on politics. Business has a legitimate role to play in the public policy process, but it has on occasion shaded over into undue influence and even corruption. Technology offers candidates and politi- cal parties new ways to reach out and inform potential voters, but it has also created new opportunities for manipulation of the electoral process through deceptive messaging. Businesses the world over are challenged to determine their legitimate scope of influ- ence and how to voice their interests most effectively in the public policy process.
  • 11. The new Sixteenth Edition of Business and Society addresses this complex agenda of issues and their impact on business and its stakeholders. It is designed to be the required textbook in an undergraduate or graduate course in Business and Society; Business, Gov- ernment, and Society; Social Issues in Management; or the Environment of Business. It may also be used, in whole or in part, in courses in Business Ethics and Public Affairs Manage- ment. This new edition of the text is also appropriate for an undergraduate sociology course that focuses on the role of business in society or on contemporary issues in business. The core argument of Business and Society is that corporations serve a broad public purpose: to create value for society. All companies must make a profit for their owners. Indeed, if they did not, they would not long survive. However, corporations create many other kinds of value as well. They are responsible for professional development for their employees, innovative new products for their customers, and generosity to their communi- ties. They must partner with a wide range of individuals and groups in society to advance collaborative goals. In our view, corporations have multiple obligations, and all stakehold- ers’ interests must be considered. Final PDF to printer
  • 12. vi Preface law43665_fm_i-xx vi 01/07/19 10:32 AM A Tradition of Excellence Since the 1960s, when Professors Keith Davis and Robert Blomstrom wrote the first edi- tion of this book, Business and Society has maintained a position of leadership by discuss- ing central issues of corporate social performance in a form that students and faculty have found engaging and stimulating. The leadership of the two founding authors, and later of Professors William C. Frederick and James E. Post, helped Business and Society to achieve a consistently high standard of quality and market acceptance. Thanks to these authors’ remarkable eye for the emerging issues that shape the organizational, social, and public policy environments in which students will soon live and work, the book has added value to the business education of many thousands of students. Business and Society has continued through several successive author teams to be the market leader in its field. The current authors bring a broad background of business and society research, teaching, consulting, and case development to the ongoing evolution of the text. The new Sixteenth Edition of Business and Society builds on its legacy of market leadership by reexamining such central issues as the role of business in society, the nature of corporate responsibility and global citizenship, business ethics practices, and the com-
  • 13. plex roles of government and business in a global community. For Instructors For instructors, this textbook offers a complete set of supplements. Instructor Library The Connect Management Instructor Library is a repository for additional resources to improve student engagement in and out of class. The instructor can select and use any asset that enhances their lecture. The Connect Instructor Library includes an extensive instruc- tor’s resource manual—fully revised for this edition—with lecture outlines, discussion case questions and answers, tips from experienced instructors, and extensive case teaching notes. A computerized test bank and power point slides for every chapter are also provided. Final PDF to printer Preface vii law43665_fm_i-xx vii 01/07/19 10:32 AM Create With McGraw-Hill Create, create.mheducation.com, the instructor can easily rearrange chapters, combine material from other content sources, and quickly upload self-developed content such as a course syllabus or teaching notes. Content
  • 14. may be drawn from any of the thousands of leading McGraw-Hill textbooks and arranged to fit a specific class or teach- ing approach. Create even allows an instructor to personalize the book’s appearance by selecting the cover and adding the instructor’s name, school, and course information and to select a print or eBook format. For Students Business and Society has long been popular with students because of its lively writing, up-to-date examples, and clear explanations of theory. This textbook has benefited greatly from feedback over the years from thousands of students who have used the material in the authors’ own classrooms. Its strengths are in many ways a testimony to the students who have used earlier generations of Business and Society. The new Sixteenth Edition of the text is designed to be as student-friendly as always. Each chapter opens with a list of key learning objectives to help focus student reading and study. Numerous figures, exhibits, and real-world business examples (set as blocks of colored type) illustrate and elaborate the main points. A glossary at the end of the book provides definitions for bold-faced and other important terms. Inter- net references and a full section-by-section bibliography guide students who wish to do further research on topics of their choice, and subject and name indexes help students locate items in the book.
  • 15. Final PDF to printer law43665_fm_i-xx viii 01/07/19 10:32 AM Students—study more efficiently, retain more and achieve better outcomes. Instructors—focus on what you love—teaching. You’re in the driver’s seat. Want to build your own course? No problem. Prefer to use our turnkey, prebuilt course? Easy. Want to make changes throughout the semester? Sure. And you’ll save time with Connect’s auto-grading too. They’ll thank you for it. Adaptive study resources like SmartBook® help your students be better prepared in less time. You can transform your class time from dull definitions to dynamic debates. Hear from your peers about the benefits of Connect at www.mheducation.com/highered/connect Make it simple, make it affordable. Connect makes it easy with seamless integration using any of the major Learning Management Systems—Blackboard®, Canvas, and D2L, among others—to let you organize your course in one convenient location. Give your students access to digital materials at a discount with our inclusive access program. Ask your McGraw-Hill representative for more information.
  • 16. Solution s for your challenges. A product isn’t a solution. Real solutions are affordable, reliable, and come with training and ongoing support when you need it and how you want it. Our Customer Experience Group can also help you troubleshoot tech problems—although Connect’s 99% uptime means you might not need to call them. See for yourself at status.mheducation.com SUCCESSFUL SEMESTERS INCLUDE CONNECT 65% Less Time Grading ©Hill Street Studios/Tobin Rogers/Blend Images LLC For Instructors Final PDF to printer
  • 17. law43665_fm_i-xx ix 01/07/19 10:32 AM ©Shutterstock/wavebreakmedia Effective, efficient studying. Connect helps you be more productive with your study time and get better grades using tools like SmartBook, which highlights key concepts and creates a personalized study plan. Connect sets you up for success, so you walk into class with confidence and walk out with better grades. Study anytime, anywhere. Download the free ReadAnywhere app and access your online eBook when it’s convenient, even if you’re offline. And since the app automatically syncs with your eBook in Connect, all of your notes are available every time you open it. Find out more at www.mheducation.com/readanywhere No surprises. The Connect Calendar and Reports tools keep you on track with the work you need to get done and your assignment scores.
  • 18. Life gets busy; Connect tools help you keep learning through it all. Learning for everyone. McGraw-Hill works directly with Accessibility Services Departments and faculty to meet the learning needs of all students. Please contact your Accessibility Services office and ask them to email [email protected], or visit www.mheducation.com/about/accessibility.html for more information. “I really liked this app—it made it easy to study when you don't have your text- book in front of you.” - Jordan Cunningham, Eastern Washington University Chapter 12 Quiz Chapter 11 Quiz Chapter 7 Quiz Chapter 13 Evidence of Evolution Chapter 11 DNA Technology
  • 19. Chapter 7 DNA Structure and Gene... and 7 more... 13 14 For Students Final PDF to printer x Preface law43665_fm_i-xx x 01/07/19 10:32 AM New for the Sixteenth Edition Over the years, the issues addressed by Business and Society have changed as the envi- ronment of business itself has been transformed. This Sixteenth Edition is no exception, as readers will discover. Some issues have become less compelling and others have taken
  • 20. their place on the business agenda, while others have endured through the years. The Sixteenth Edition has been thoroughly revised and updated to reflect the latest theoretical work in the field and statistical data, as well as recent events. Among the new additions are: ∙ New discussion of theoretical advances in stakeholder theory, corporate citizenship, public affairs management, public and private regulation, corporate governance, social and environmental auditing, social investing, reputation management, business partnerships, supply chain codes of conduct, social entrepreneurship, and corporate philanthropy. ∙ Treatment of practical issues, such as social networking, artificial intelligence and robotics, gender diversity, political advertising and campaign contributions, public and media relations, well as the latest developments in the regulatory environment in which
  • 21. businesses operate. ∙ New discussion cases and full-length cases on such timely topics as the role of busi- ness in the unfolding opioid crisis, Wells Fargo’s unauthorized consumer accounts, the Volkswagen diesel emissions scandal, the aftermath of the BP disaster in the Gulf of Mexico, the massive Equifax data breach, the consumer boycott of Stoli vodka, the business response to the movement for school safety, LaFarge’s dealings in the Syrian war zone, the potential regulation of Facebook in the United States and Europe, political action by the U.S. steel industry on the issue of tariffs, the rise of autonomous vehicles, law enforcement access to mobile phone data, executive misconduct at Wynn Resorts, business response to the threat to “Dreamers,” IKEA’s sustainable supply chain, Sales- force’s integrated philanthropy, and social media criticism of United Airlines. Finally, this is a book with a vision. It is not simply a compendium of information
  • 22. and ideas. The new edition of Business and Society articulates the view that in a global community, where traditional buffers no longer protect business from external change, managers can create strategies that integrate stakeholder interests, respect personal values, support community development, and are implemented fairly. Most important, businesses can achieve these goals while also being economically successful. Indeed, this may be the only way to achieve economic success over the long term. Anne T. Lawrence James Weber Final PDF to printer xi law43665_fm_i-xx xi 01/07/19 10:32 AM Acknowledgments We are grateful for the assistance of many colleagues at
  • 23. universities in the United States and abroad who over the years have helped shape this book with their excellent suggestions and ideas. We also note the feedback from students in our classes and at other colleges and universities that has helped make this book as user-friendly as possible. We especially wish to thank two esteemed colleagues who made special contributions to this edition. David M. Wasieleski, professor of management and business ethics at Duquesne University, led the revisions of Chapters 5 and 6, to which he contributed his knowledge of ethics theory and organizational practice. Vanessa D. Hill, associate profes- sor of management at the University of Louisiana at Lafayette, generously shared with us her expertise on the employment relationship and workplace diversity and inclusion. She was the lead author of Chapters 15 and 16, which have greatly benefited from her insights. For these contributions, we are most grateful. We also wish to express our appreciation for the colleagues who
  • 24. provided detailed reviews for this edition. These reviewers were Hossein Bidgoli, California State Uni- versity, Bakersfield; Ryan Fehr, Foster School of Business, University of Washington, Seattle; Scott Jeffrey, Monmouth University; Eun-Hee Kim, Gabelli School of Business, Fordham University; Jet Mboga, William Paterson University; Stephen P. Preacher, South- ern Wesleyan University; and A. J. Stagliano, Saint Joseph’s University. Their insights helped guide our revision. Thanks are also due Daniel Jacobs of Loyola Marymount University; Samir Kumar Barua of the Indian Institute of Management Ahmedabad and Mahendra R. Gurarathi of Bentley University; Grishma Shah, Janet Rovenpor, and Musa Jafar of Manhattan College; Robyn Linde of Rhode Island College and H. Richard Eisenbeis of the Univer- sity of Southern Colorado Pueblo (retired); Cynthia E. Clark of Bentley University; and Debra M. Staab, a freelance writer and researcher, who contributed cases to this edition.
  • 25. We are grateful to several individuals have made specific research contributions to this project. Denise Kleinrichert, of the Center for Ethical and Sustainable Business Manage- ment at San Francisco State University, provided new material on B Corporations and social entrepreneurship for Chapter 3, which we appreciate. Natalie Hanna and Kelsey Aemi of Duquesne University provided able research assistance. Thanks are due also to Carolyn Roose Eagle, Ben Eagle, and Nate Marsh for research support. Emily Marsh, of Colorbox Industries, provided graphic design services. Debra M. Staab, in addition to authoring a case, provided research assistance and under- took the complex task of preparing the instructor’s resource manual, test bank, and other ancillary materials. Her contributions have been invaluable. In addition, we are grateful to the many colleagues who over the years have gener- ously shared with us their insights into the theory and pedagogy of business and soci-
  • 26. ety. In particular, we would like to thank Cynthia E. Clark and Jill Brown of Bentley University; Shawn Berman, Harry J. Van Buren III, Natalia Vidal, and Garima Sharma of the University of New Mexico; Anke Arnaud of Embry Riddle Aeronautical Univer- sity; Jennifer J. Griffin of Loyola University of Chicago; Ronald M. Roman, Asbjorn Osland, Thomas Altura, and Matthew Maguire of San José State University; Heather Elms of American University; Joseph A. Petrick of Wright State University; Kathleen Final PDF to printer law43665_fm_i-xx xii 01/07/19 10:32 AM xii Acknowledgments Rehbein of Marquette University; Judith Schrempf-Stirling of the University of Geneva; Michelle Westermann-Behaylo of the University of Amsterdam; Diane Swanson and
  • 27. Bernie Hayen of Kansas State University; Cynthia M. Orms of Georgia College & State University; Ali Al-Kazemi of Kuwait University; Sandra Waddock of Boston College; Mary C. Gentile of the University of Virginia Darden School of Business; Michael E. Johnson-Cramer and Jamie Hendry of Bucknell University; John Mahon and Stephanie Welcomer of the University of Maine; Bradley Agle of Brigham Young University; Gina Vega of Merrimack College; Craig Dunn and Brian Burton of Western Washington University; Lori V. Ryan of San Diego State University; Bryan W. Husted of EGADE Business School Monterrey; Sharon Livesey of Fordham University; Barry Mitnick of the University of Pittsburgh; Virginia Gerde of Furman University; Matthew Drake of Duquesne University; Robbin Derry of the University of Lethbridge; Jerry Calton of the University of Hawaii-Hilo; Linda Klebe Treviño of Pennsylvania State University; Mary Meisenhelter of York College of Pennsylvania; Amy Hillman and Gerald Keim of Arizona State University; Barbara Altman of Texas A&M
  • 28. University Central Texas; Randall Harris of Texas A&M University Corpus Christi; Richard Wokutch of Virginia Tech University; Dawn Elm of University of St. Thomas; Lynda Brown of the Univer- sity of Montana; Kathleen A. Getz of Loyola University – Maryland; Gordon P. Rands of Western Illinois University; Paul S. Adler of the University of Southern California; Linda C. Rodriguez of the University of South Carolina Aiken; Emmanuel Raufflet of HEC Montreal; Bruce Paton of Menlo College; Smita Trivedi, Tom E. Thomas, Geoffrey Desa, and Murray Silverman (retired), of San Francisco State University; Jacob Park of Green Mountain College; Armand Gilinsky of Sonoma State University; and Tara Ceranic Salinas of the University of San Diego. These scholars’ dedication to the creative teaching of business and society has been a continuing inspiration to us. We wish to express our appreciation to James E. Post, a former author of this book, who
  • 29. has continued to offer valuable intellectual guidance to this project. We also wish to note, with sadness and gratitude, the passing of our mentor and a former author of this book, William C. Frederick, in 2018. His ideas live on in this … Chapter 6 Organizational Ethics ©2020 McGraw-Hill Education. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw-Hill Education. Copyright © 2017 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. ©2020 McGraw-Hill Education. Ch. 6:Key Learning Objectives 6-1 Classifying an organization’s culture and ethical climate.
  • 30. 6-2 Recognizing ethics challenges across the multiple functions of business. 6-3 Creating effective ethics policies and identifying responsible individuals to become the organization’s ethics and compliance officer. 6-4 Constructing successful ethics reporting mechanisms, ethics training programs, and similar safeguards. 6-5 Understanding how to conduct business ethically in the global marketplace. ©2020 McGraw-Hill Education. 6-‹#› ©2020 McGraw-Hill Education. 2 Corporate Culture and Ethical Climates1 Corporate culture: A blend of ideas, customs, traditional practices, company values, and shared meanings. To help define normal behavior for everyone who works in a company. Nearly twice as many employees observe misconduct by
  • 31. coworkers in weak ethical cultures companies. ©2020 McGraw-Hill Education. 6-‹#› ©2020 McGraw-Hill Education. Corporate Culture and Ethical Climates2 Ethical climate: The unspoken understanding among employees of what is and is not acceptable behavior. Based on the expected standards and norms. Multiple climates (or subclimates) can exist within one organization. ©2020 McGraw-Hill Education. 6-‹#› ©2020 McGraw-Hill Education. 4
  • 32. The Components of Ethical Climates From Figure 6.1 Copyright © McGraw-Hill Education. Permission required for reproduction or display.Ethical CriteriaFocus of Individual PersonOrganizationSocietyEgoism (self-centered approach)Self-interestCompany interestEconomic efficiencyBenevolence (concern for-others approach)FriendshipTeam interestSocial responsibilityPrinciple (integrity approach)Personal moralityCompany rules and proceduresLaws and professional codes ©2020 McGraw-Hill Education. 6-‹#› ©2020 McGraw-Hill Education. 5 Business Ethics Across Organizational Functions Business operations can be highly specialized, leading to ethical challenges related to those functional areas.
  • 33. Professional ethical standards may conflict with the ethical standards within the organization. Accounting Ethics Financial Ethics Marketing Ethics Information Technology Ethics Supply Chain Ethics ©2020 McGraw-Hill Education. 6-‹#› ©2020 McGraw-Hill Education. 6 Accounting Ethics Critically important component of every business firm.
  • 34. Financial records must be audited by a certified professional accounting firm. Requirements of the accounting function: Responsibilities. Public interest. Integrity. Objectivity and independence. Due care. Conflict of interest Conflict with self-interest (of the accounting firm) and the interests of others (shareholders and the public). ©2020 McGraw-Hill Education. 6-‹#› ©2020 McGraw-Hill Education. Financial Ethics Responsibilities to manage the firm’s assets and raising capital. Example of ethical issues: Barclays PLC was accused of fraud. The Royal Bank of Scotland scandal. Self-regulation as the best path for ethical compliance.
  • 35. ©2020 McGraw-Hill Education. 6-‹#› ©2020 McGraw-Hill Education. 8 Marketing Ethics Marketing: advertising, distributing, and selling products or services. Issues in marketing ethics emphasize honesty and transparency in advertising. Example: Outcome Health misled their customers. American Marketing Association (AMA) code of ethics: Do no harm. Foster trust. Embrace ethical values. ©2020 McGraw-Hill Education.
  • 36. 6-‹#› ©2020 McGraw-Hill Education. 9 Information Technology Ethics Ethical challenges in this field involve: Invasions of privacy. The collection and storage of, and access to, personal and business information. Confidentiality of electronic mail communication. Copyright protection regarding software, music, and intellectual property. Cyberbullying. without parental consent. ©2020 McGraw-Hill Education. 6-‹#›
  • 37. ©2020 McGraw-Hill Education. 10 Supply Chain Ethics Supply Chain: production and operations functions needed to create a product or service. Issues in supply chain ethics emphasize integrity, value and loyalty in business dealings. Example: Kobe Steel Limited misled their customers. Institute for Supply Management (ISM) principles and standards: Avoid impropriety. Be responsible. Protect confidentiality. Follow the law. ©2020 McGraw-Hill Education. 6-‹#› ©2020 McGraw-Hill Education.
  • 38. 11 Building Ethics Safeguard Into the Company To improve the quality of a company’s ethical performance you have to change the culture so that ethics is part of everyday decision-making. To do so means institutionalizing ethics or building ethics safeguards in to everyday routines. ©2020 McGraw-Hill Education. 6-‹#› ©2020 McGraw-Hill Education. Organizations’ Ethics Safeguards Percentage of Firms Reporting They Have Ethical Safeguards Figure 6.2 Copyright © McGraw-Hill Education. Permission required for reproduction or display. Access the text alternative for these images.
  • 39. ©2020 McGraw-Hill Education. 6-‹#› ©2020 McGraw-Hill Education. 13 Two Ethics Approaches Compliance-based approach: Seeks to avoid legal sanctions. Emphasizes the threat of detection and punishment. Integrity-based approach: Combines concern for law with employee responsibility. Promotes acting with integrity and conduct business with honesty and fairness. Both approaches have been found to lessen unethical conduct, but in somewhat different ways. ©2020 McGraw-Hill Education. 6-‹#›
  • 40. ©2020 McGraw-Hill Education. Ethics Programs and Policies1 Top Management Commitment and Involvement: Critical to fostering employee ethical behavior. Ethics Policies or Codes: As a guidance to managers and employees to solve ethical dilemma. In U.S. policies tend to be instrumental, providing rules and procedures. In Japan policies tend to be combination of legal compliance and company values. Ethics programs must be widely distributed and associated with ethics training. ©2020 McGraw-Hill Education. 6-‹#› ©2020 McGraw-Hill Education.
  • 41. 15 Ethics Programs and Policies2 Ethics and Compliance Officers: Many created as early as the 1980s. Membership in professional association, Ethics and Compliance Officers Association (ECOA), doubled between 2000 and 2004. Recently ECOA and Ethics Resource Center merged into the Ethics Compliance Alliance. Ethics Reporting Mechanisms: Often called the “helpline” or “hotline.” Purposes: To provide interpretations of proper ethical behavior. To create avenue for reporting unethical conduct. To provide information-sharing tools for employees and stakeholders. Executives tend to use the helpline more often than middle managers. ©2020 McGraw-Hill Education. 6-‹#› ©2020 McGraw-Hill Education.
  • 42. 16 Ethics Programs and Policies3 Ethics Training Programs: Generally the most expensive and time-consuming element of an ethics program. Found regularly in larger business organizations. Small and medium businesses are more likely to offer training in alignment with regulatory guidelines. Example: “Giving Voice to Values” program. ©2020 McGraw-Hill Education. 6-‹#› ©2020 McGraw-Hill Education. 17 Ethics Programs and Policies4 Objectives and Motivations for Employee Ethics Training Programs
  • 43. Figure 6.3 Copyright © McGraw-Hill Education. Permission required for reproduction or display. Access the text alternative for these images. ©2020 McGraw-Hill Education. 6-‹#› ©2020 McGraw-Hill Education. 18 The World’s Most Ethical Companies Forbes Magazine’s most ethical companies and their industries From Figure 6.4 Copyright © McGraw-Hill Education. Permission required for reproduction or display.These firms were ranked among the highest ethical firms each year from 2007 through 2017.AFLACInsuranceDeere and CompanyIndustrial manufacturingEcolabChemicalsFluor CorporationEngineeringGeneral ElectricDiversifiedInternational PaperPaper productsKao CorporationConsumer
  • 44. productsMilliken & CompanyIndustrial manufacturingPepsiCoFood & beverageStarbucks Coffee CompanyRestaurantsTexas InstrumentsComputersUPSTransportationXeroxComputers ©2020 McGraw-Hill Education. 6-‹#› ©2020 McGraw-Hill Education. 19 Ethics in a Global Economy Doing business in global context brings up host of complex ethical challenges. Bribery: a questionable or unjust payment often to a government official to ensure or facilitate a business transaction. International watchdog agency, Transparency International, publishes a survey of countries’ levels of corruption. Bribe-taking more likely in countries with low per capita income, low salaries for government officials, and less income variation.
  • 45. ©2020 McGraw-Hill Education. 6-‹#› ©2020 McGraw-Hill Education. Efforts to Curtail Unethical Practices Dow Jones Anti-Corruption Survey Seventy-one percent of respondents stopped or delayed business dealings with corrupt partners. Numerous efforts to prohibit bribery: U.S. Foreign -Corrupt Practices Act (FCPA). The United Kingdom’s Bribery Act prohibits bribery. Anti-Bribery Law in Brazil, India and Mexico. Organization’s culture and ethical work climate play a central role in encouraging employees to act ethically. ©2020 McGraw-Hill Education. 6-‹#› ©2020 McGraw-Hill Education.
  • 46. 21 End of Main Content Because learning changes everything.® www.mheducation.com ©2020 McGraw-Hill Education. Closing slide. 22 Accessibility Content: Text Alternatives for Images ©2020 McGraw-Hill Education. Organizations’ Ethics Safeguards Text Alternative The y-axis has six markings. From the bottom to the top, they read 0 percent, 20 percent, 40 percent, 60 percent, 80 percent, and 100 percent.
  • 47. The x-axis contains four markings. From the left to the right, they read developed code of ethics, offered ethics training, created ethics office or officer, and established ethics hotline. Horizontal bars arise from four different points along the x- axis. These bars extend upward representing percentages on the y-axis. The data on the graphs reads as follows: According to the center for business ethics, 1986 and 1992, approximately 90 percent of companies developed a code of ethics. Approximately 85 percent of companies developed their code of ethics according to the ethics resource center, 2005. According to Weber and Wasieleski, 2013, approximately 99 percent companies developed their code of ethics. According to the center for business ethics, 1986, approximately 45 percent companies offered ethics training. According to the center for business ethics, 1992, approximately 50 percent companies offered ethics training. According to the ethics resource center, 1994, approximately 35 percent companies offered ethics training. According to the ethics resource center, 2005, approximately 70 percent companies offered ethics training. According to Weber and Wasieleski, 2013, approximately 99 percent companies offered ethics training. According to the ethics resource center, 1994, approximately 35 percent companies created ethics offices or appointed ethics
  • 48. officers. According to the ethics resource center, 2005, approximately 64 percent companies created ethics offices or appointed ethics officers. According to Weber and Wasieleski, 2013, 100 percent companies created ethics offices or appointed ethics officers. According to the ethics resource center, 2005, approximately 75 percent companies established an ethics hotline. According to Weber and Wasieleski, 2013, approximately 95 percent companies established an ethics hotline. Return to slide containing original image. ©2020 McGraw-Hill Education. 6-‹#› ©2020 McGraw-Hill Education. 24 Ethics Programs and Policies4 Text Alternative The x-axis has eight markers indicating percentages labeled as follows: 0; 10; 20; 30; 40; 50; 60; and 70.
  • 49. The y-axis lists ten reasons why companies create ethics training programs. Horizontal bars extend from the y-axis according to their respective percentages. From the bottom to the top, the data reads as follows: Establish strong legal defense fund at 8 percent. Improving training effectiveness by deploying courses that are higher quality at 13 percent; Reinforce tone at the top at 14 percent. Improve the skills of senior leaders and managers at 14 percent. Keep information secure and protected at 20 percent. Meet audit or certification requirements at 21 percent. Prevent future issues or misconduct at 39 percent. Improve employee understanding of compliance priorities and obligations at 47 percent; Create a culture of ethics and respect at 57 percent. And, the most common reason for ethics training was to comply with laws and regulations at 59 percent. Return to slide containing original image. ©2020 McGraw-Hill Education. 6-‹#› ©2020 McGraw-Hill Education.
  • 50. 25 Chapter 5 Ethics and Ethical Reasoning Copyright ©2020 McGraw-Hill Education. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw-Hill Education. ©20XX McGraw-Hill Education. Chapter 2 - Managing Public Issues and Stakeholder Relationships 1 Ch. 5:Key Learning Objectives 5-1 Defining ethics and business ethics. 5-2 Evaluating why businesses should be ethical.
  • 51. 5-3 Knowing why ethical problems occur in business. 5-4 Identifying managerial values and people’s spirituality as influences on ethical decision making. 5-5 Understanding stages of moral reasoning. 5-6 Analyzing ethical problems using generally accepted ethics theories. 5-7 Understanding how moral intensity affects ethical decision- making. 5-‹#› ©20XX McGraw-Hill Education. Chapter 2 - Managing Public Issues and Stakeholder Relationships 2 The Meaning of Ethics Ethics: A conception of right and wrong conduct. Tells us whether our behavior is moral or immoral. Deals with fundamental human relationships—how we think and behave toward others and want them to think and behave toward us.
  • 52. Ethical Principles: Guides to moral behavior. 5-‹#› ©20XX McGraw-Hill Education. Chapter 2 - Managing Public Issues and Stakeholder Relationships Sources of Ethics Notions of right and wrong come from many sources: Religious beliefs. Family institution. Education. Community/neighborhood. Media influences. Acts as a moral compass to guide an individual when ethical dilemmas arise. 5-‹#› ©20XX McGraw-Hill Education. Chapter 2 - Managing Public Issues and Stakeholder
  • 53. Relationships Ethical Relativism Concept which holds that ethical behavior should be defined by various periods in time in history, a society’s traditions, the special circumstances of the moment, or personal opinion. Relative to time, place, circumstance, and the person’s involved. No universal ethical standards. Depends on how you frame the issue and which lens you look through. 5-‹#› ©20XX McGraw-Hill Education. Chapter 2 - Managing Public Issues and Stakeholder Relationships 5 Are Ethics the Same as Laws? Laws: society’s formal written rules about what constitutes right and wrong conduct in various spheres of life.
  • 54. Ethical concepts are more complex than written rules of law. 5-‹#› ©20XX McGraw-Hill Education. Chapter 2 - Managing Public Issues and Stakeholder Relationships Business Ethics Business Ethics: the application of general ethical ideas to business behavior. 5-‹#› ©20XX McGraw-Hill Education. Chapter 2 - Managing Public Issues and Stakeholder Relationships Misconduct at Work The Ethics and Compliance Initiative: since 2000 about half of all employees surveyed reported ongoing observations of unethical behavior at work. In 2017, the most common unethical practice was lying to
  • 55. employees and external stakeholders. Other unethical practices included abusive behavior, Internet abuse, conflicts of interest, and health violations. The Institute for Leadership and Management reported that 63 percent of managers expected to act unethically at some point in their careers. 5-‹#› ©20XX McGraw-Hill Education. Chapter 2 - Managing Public Issues and Stakeholder Relationships 8 Why Business Should be Ethical? From Figure 5.1 to be EthicalTo enhance business performance.To comply with legal requirements.To prevent or minimize harm.To meet demands of business stakeholders.To promote personal morality.
  • 56. 5-‹#› ©20XX McGraw-Hill Education. Chapter 2 - Managing Public Issues and Stakeholder Relationships 9 Five Key Reasons Business Should Be Ethical1 1.To enhance business performance. Research shows strong link between ethics and financial performance. Ethical actions can directly affect their organization’s bottom line. 5-‹#› ©20XX McGraw-Hill Education. Chapter 2 - Managing Public Issues and Stakeholder Relationships JW: I assume there is a standard font size for text but this just
  • 57. seemed a little small to me. Same issue with later slides – ok to leave as is if there is a standard here. DS: I bumped it up a little bit but this size seems to be pretty standard. Plus it turned out to be a lot of work since almost all slides were this orginal size. 10 The World’s Most Ethical Index versus S&P 500 and FTSE 100, 2006–2017 Figure 5.2 Copyright © McGraw-Hill Education. Permission required for reproduction or display. Access the text alternative for these images. 5-‹#› ©20XX McGraw-Hill Education. Chapter 2 - Managing Public Issues and Stakeholder Relationships 11 Five Key Reasons
  • 58. Business Should Be Ethical2 2.To comply with legal requirements. Two legal requirements provide direction for companies interested in being more ethical in their business operations: U.S. Corporate Sentencing Guidelines. Sarbanes-Oxley Act of 2002. 5-‹#› ©20XX McGraw-Hill Education. Chapter 2 - Managing Public Issues and Stakeholder Relationships 12 U.S. Corporate Sentencing Guidelines Establish standards and procedures to reduce criminal conduct. Assign high-level officer(s) responsibility for compliance. Not assign discretionary authority to “risky” individuals. Effectively communicate standards and procedures through training. Take reasonable steps to ensure compliance—monitor and audit systems, maintain and publicize reporting systems.
  • 59. Enforce standards and procedures through disciplinary mechanisms. Following detection of offense, respond appropriately and prevent reoccurrence. 5-‹#› ©20XX McGraw-Hill Education. Chapter 2 - Managing Public Issues and Stakeholder Relationships Sarbanes-Oxley Act of 2002 Born from the ethics scandals at Enron, WorldCom, Tyco and others. Seeks to ensure that firms maintain high ethical standards. How they conduct and monitor business operations. Requires executives to: Vouch for the accuracy of a firm’s financial reports. Pay back bonuses based on earnings that are later proved fraudulent. Established strict rules for auditing firms. 5-‹#›
  • 60. ©20XX McGraw-Hill Education. Chapter 2 - Managing Public Issues and Stakeholder Relationships Five Key Reasons Business Should Be Ethical3 3.To prevent or minimize harm. Overriding principle that business should “do no harm.” 5-‹#› ©20XX McGraw-Hill Education. Chapter 2 - Managing Public Issues and Stakeholder Relationships Five Key Reasons Business Should Be Ethical4 4.To meet demands of business stakeholders. Consumers are more inclined to purchase the products. Signaling a long-term concern for all stakeholders; a better economic performance. Gain the trust from the investors.
  • 61. 5-‹#› ©20XX McGraw-Hill Education. Chapter 2 - Managing Public Issues and Stakeholder Relationships 16 Five Key Reasons Business Should Be Ethical5 5.To promote personal morality. Knowing one works in a supportive ethical climate contributes to sense of psychological security. 5-‹#› ©20XX McGraw-Hill Education. Chapter 2 - Managing Public Issues and Stakeholder Relationships 17
  • 62. Why Ethical Problems Occur in Business1 Four Primary Reasons: Personal gain and selfish interest. Competitive pressure on profits. Conflicts of interest. Cross-cultural contradictions. 5-‹#› ©20XX McGraw-Hill Education. Chapter 2 - Managing Public Issues and Stakeholder Relationships Is this OK? 18 Why Ethical Problems Occur in Business2 Figure 5.3 Copyright © McGraw-Hill Education. Permission required for reproduction or display. Access the text alternative for these images.
  • 63. 5-‹#› ©20XX McGraw-Hill Education. Chapter 2 - Managing Public Issues and Stakeholder Relationships 19 Core Elements of Ethical Character: Managers’Values Serve as models for others who work at the company. New CEOs tend to be more self-interested and short-term focused. Recent study: today’s managers place slightly more importance on moral values > competency values. The challenge for many moral managers is acting effectively on their beliefs in the day-to-day life of their organizations. 5-‹#› ©20XX McGraw-Hill Education. Chapter 2 - Managing Public Issues and Stakeholder Relationships
  • 64. 20 Core Elements of Ethical Character: Spirituality in the Workplace Personal belief in a supreme being, religious organization, power of nature or some other life-guiding force. Organizations accommodate their employees to meet their spiritual and religious needs. Opponents of spirituality at work argue to keep spirituality out of the workplace. 5-‹#› ©20XX McGraw-Hill Education. Chapter 2 - Managing Public Issues and Stakeholder Relationships 21 Core Elements of Ethical Character: Manager’s Moral Development1
  • 65. Stages of Moral Development: From childhood to mature adulthood people move up in their moral reasoning Stage 1: Earliest stages of reasoning are ego-centered Stage 2: “I’ll let you play with my toy, if I can play with yours” Stage 3: Learn the give-and-take Stage 4: Able to focus their reasoning according to law Stage 5: Apply their moral beliefs above and beyond specific social custom Stage 6: Emphasize ethical reasoning using broad principles and relationships 5-‹#› ©20XX McGraw-Hill Education. Chapter 2 - Managing Public Issues and Stakeholder Relationships Core Elements of Ethical Character: Manager’s Moral Development2 Most managers make decisions based on criteria in levels three and four. Senior leaders often demonstrate higher stages of moral reasoning than typical managers.
  • 66. Company executives’ reasoning has wide implications both inside and outside the organization. 5-‹#› ©20XX McGraw-Hill Education. Chapter 2 - Managing Public Issues and Stakeholder Relationships Stages of Moral Development and Ethics Reasoning Figure 5.4 Copyright © McGraw-Hill Education. Permission required for reproduction or display. Access the text alternative for these images. 5-‹#› ©20XX McGraw-Hill Education. Chapter 2 - Managing Public Issues and Stakeholder Relationships
  • 67. 24 Analyzing Ethical Dilemmas in Business A set of decision guidelines that will aid thinking process when on-the-job ethics issues occur. These guidelines should help them: Identify and analyze the nature of an ethical problem. Decide which course of action is likely to produce an ethical result. 5-‹#› ©20XX McGraw-Hill Education. Chapter 2 - Managing Public Issues and Stakeholder Relationships Four Methods of Ethical Reasoning Figure 5.5 Copyright © McGraw-Hill Education. Permission required for reproduction or display. Access the text alternative for these images. 5-‹#›
  • 68. ©20XX McGraw-Hill Education. Chapter 2 - Managing Public Issues and Stakeholder Relationships 26 Virtue Ethics: Pursuing a “Good” Life Virtue Ethics: Character traits that a good person should posses, theorizing that moral values will direct the person toward good behavior. Virtue ethics is not a thoroughly developed ethical system of rules and guidelines, but rather a system of values that form good character. 5-‹#› ©20XX McGraw-Hill Education. Chapter 2 - Managing Public Issues and Stakeholder Relationships List of Moral Values Across Time Figure 5.6
  • 69. Copyright © McGraw-Hill Education. Permission required for reproduction or display. Access the text alternative for these images. 5-‹#› ©20XX McGraw-Hill Education. Chapter 2 - Managing Public Issues and Stakeholder Relationships 28 Utility: Comparing Benefits and Costs Utilitarian reasoning: overall amount of good that can be produced by an action or a decision. Compare benefits and costs of a decision, policy or action. Costs and benefits can be economic, social or human. Drawbacks: The difficulty of accurately measuring both costs and benefits. The majority may override the rights of those in the minority. Benefits Costs
  • 70. 5-‹#› ©20XX McGraw-Hill Education. Chapter 2 - Managing Public Issues and Stakeholder Relationships Rights: Determining and Protecting Entitlements Human Rights: Person or group is entitled to something or to be treated in a certain way. Examples of basic human rights are right to life, safety, and due process. Limitations: The difficulty of balancing conflicting rights. 5-‹#› ©20XX McGraw-Hill Education. Chapter 2 - Managing Public Issues and Stakeholder Relationships Justice: Is It Fair? Justice: benefits and burdens are distributed equally, according to some accepted rule.
  • 71. Social Justice: society’s income and wealth are distributed among the people in fair proportions. Fair shares will vary from person to person and group to group. 5-‹#› ©20XX McGraw-Hill Education. Chapter 2 - Managing Public Issues and Stakeholder Relationships Applying Ethical Reasoning to Business Activities Once the ethical analysis is complete, the decision maker should ask the question: Do all of the above ethics approaches lead to the same decision? If all the answers are “Yes”, the proposed action is ethical. If all the answers are “No”, the action is not ethical and needs to be reconsidered. If “Yes” and “No” answers are mixed, you must decide which takes priority. 5-‹#›
  • 72. ©20XX McGraw-Hill Education. Chapter 2 - Managing Public Issues and Stakeholder Relationships The Moral Intensity of an Ethical Issue Moral Intensity: One concept for determining the ethicality or morality of a situation. Moral intensity is the extent of the issue-related moral imperative in a situation. 5-‹#› ©20XX McGraw-Hill Education. Chapter 2 - Managing Public Issues and Stakeholder Relationships 33 Moral Intensity: Five Dimensions Magnitude of consequences. Proximity. Social consensus.
  • 73. Probability of effect. Temporal immediacy. 5-‹#› ©20XX McGraw-Hill Education. Chapter 2 - Managing Public Issues and Stakeholder Relationships 34 Moral Intensity: Dimensions Defined1 Magnitude of Consequences: the sum of the harms/benefits done to the victims/beneficiaries of the moral act. Found to be the most powerful dimension. Proximity: The feeling of nearness (social, psychological, physical) that the moral act has for the victims/beneficiaries. Found to be a powerful dimension. Social Consensus: The degree of social agreement that a proposed act is evil/good. Seems to be more like “social concern”. Found to be a powerful dimension.
  • 74. 5-‹#› ©20XX McGraw-Hill Education. Chapter 2 - Managing Public Issues and Stakeholder Relationships 35 Moral Intensity: Dimensions Defined2 Probability of Effect: Probability that the act will take place and the act will cause the harm/benefit predicted. Found to be a powerful dimension. Temporal Immediacy: length of time between the present and the onset of the consequences. NOT found to be the most powerful dimension.
  • 75. 5-‹#› ©20XX McGraw-Hill Education. Chapter 2 - Managing Public Issues and Stakeholder Relationships 36 End of Main Content Because learning changes everything.® www.mheducation.com ©20XX McGraw-Hill Education. Chapter 2 - Managing Public Issues and Stakeholder Relationships Closing slide. 37 Accessibility Content: Text Alternatives for Images
  • 76. ©20XX McGraw-Hill Education. Chapter 2 - Managing Public Issues and Stakeholder Relationships The World’s Most Ethical Index versus S&P 500 and FTSE 100, 2006–2017 Text Alternative The x-axis contains seven markings. From the left to the right, they read 2006, 2008, 2010, 2012, 2014, and 2016. The y-axis contains ten percentage markings. From the bottom to the top, they read minus 20 percent, minus 10 percent, 0 percent, 10 percent, 20 percent, 30 percent, 40 percent, 50 percent, 60 percent, and 70 percent. All three indices begin at 0 percent in the year 2006. In the world’s most ethical index, the line rises steeply to approximately 21 percent in the year 2006, peaking at 57 percent in 2008, and drops to 43 percent in 2010. There is a steep downfall to 16 percent in 2012. The line then rises to 22 percent in 2014 only to decline again to 16 percent in 2016. In the FTSE 100 index, the line rises to 18 percent in the year 2006 and it rises gradually to approximately 19 percent in 2008. In 2010, the line drops significantly to 4 percent. A slight uptick to 6 percent occurs in 2012. In 2014 the index drops to minus 3 percent. By 2016, the index rose to 14 percent. In the S and P 500 index, the line rises to 8 percent in the year 2006 and continues to increase to 17 percent in 2008. In 2010,
  • 77. the line dips to minus 12 percent. In 2012, there is a steep jump to 13 percent. In 2014, there is a slow decrease to 11 percent. By 2016 the index fell to 9 percent. Return to slide containing original image. 5-‹#› ©20XX McGraw-Hill Education. Chapter 2 - Managing Public Issues and Stakeholder Relationships 39 Why Ethical Problems Occur in Business2Text Alternative It contains four columns and five rows. Column 1 is titled reason, column 2 is titled nature of ethical problem, column 3 is titled typical approach, and column 4 is titled attitude. In row 2, column 1 reads personal gain and selfish interest, column 2 reads selfish interest versus others’ interests, column 3 reads egotistical mentality, and column 4 reads I want it. In row 3, column 1 reads competitive pressures on profits, column 2 reads firm’s interest versus others’ interests, column 3 reads bottom-line mentality, and column 4 reads we have to beat
  • 78. the others at all costs. In row 4, column 1 reads conflicts of interest, column 2 reads multiple obligations or loyalties, column 3 reads favoritism mentality, and column 4 reads help yourself and those closest to you. In row 5, column 1 reads cross-cultural contradictions, column 2 reads company’s interests versus diverse cultural traditions and values, column 3 reads ethnocentric mentality, and column 4 reads foreigners have a funny notion of what’s right and wrong. Return to slide containing original image. 5-‹#› ©20XX McGraw-Hill Education. Chapter 2 - Managing Public Issues and Stakeholder Relationships 40 Stages of Moral Development and Ethics Reasoning Text Alternative It contains three columns and seven rows.
  • 79. Column 1 is titled age group, column 2 is titled development stage and major ethics referent, and column 3 reads basis of ethics reasoning. In row 2, column 1 reads mature adulthood. Column 2 reads stage 6 universal principles: justice, fairness, and universal human rights. Column 3 reads principle-centered reasoning. In row 3, column 1 reads mature adulthood. Column 2 reads stage 5 moral beliefs above and beyond specific social custom: human rights, social contract, and broad constitutional principles. Column 3 reads principle-centered reasoning. In row 4, column 1 reads adulthood. Column 2 reads stage 4 society at large: customs, traditions, and laws. Column 3 reads society- and law-centered reasoning. In row 5, column 1 reads early adulthood, adolescence. Column 2 reads stage 3 social groups: friends, school, coworkers, and family. Column 3 reads group-centered reasoning. In row 6, column 1 reads adolescence, youth. Column 2 reads stage 2 reward seeking: self-interest, own needs, reciprocity. Column 3 reads ego-centered reasoning. In row 7, column 1 reads childhood. Column 2 reads stage 1 punishment avoidance: avoid harm, obedience to power. Column 3 reads ego-centered reasoning. Return to slide containing original image.
  • 80. 5-‹#› ©20XX McGraw-Hill Education. Chapter 2 - Managing Public Issues and Stakeholder Relationships 41 Four Methods of Ethical Reasoning Text Alternative It has four columns and five rows. Column 1 is titled method, column 2 is titled critical determining factor, column 3 is titled an action is ethical when…, and column 4 is titled limitations. In row 2, column 1 reads virtues, column 2 reads values and character, column 3 reads it aligns with good character, and column 4 reads subjective or incomplete set of good virtues. In row 3, column 1 reads utilitarian, column 2 reads comparing benefits and costs, column 3 reads net benefits exceed net costs, and column 4 reads difficult to measure some human and social costs; majority may disregard rights of the minority. In row 4, column 1 reads rights, column 2 reads respecting entitlements, column 3 reads basic human rights are respected, and column 4 reads difficult to balance conflicting rights. In row 5, column 1 reads justice, column 2 reads distributing fair shares, column 3 reads benefits and costs are fairly
  • 81. distributed, and column 4 reads difficult to measure benefits and costs; lack of agreement on fair shares. Return to slide containing original image. 5-‹#› ©20XX McGraw-Hill Education. Chapter 2 - Managing Public Issues and Stakeholder Relationships 42 List of Moral Values Across Time Text Alternative Column 1 is titled Plato and Aristotle, 4th century BC. There are ten points listed under this heading. They read as follows: Courage. Self-control. Generosity. Magnificence. High-mindedness. Gentleness. Friendliness. Truthfulness.
  • 82. Wittiness. Modesty. Column 2 is titled Saint Thomas Aquinas, 1225 to 1274. There are eight points listed under this heading. They read as follows: Faith. Hope. Charity. Prudence. Justice. Temperance. Fortitude. Humility. Column 3 is titled Benjamin Franklin, 1706 to 1790. There are five points listed under this heading. They read as follows: Cleanliness. Silence. Industry. Punctuality. Frugality. Column 4 is titled Robert Solomon 1942 to 2007. There are three points listed under this heading. They read as follows: Honesty. Trust. Toughness.
  • 83. Return to slide containing original image. 5-‹#› ©20XX McGraw-Hill Education. Chapter 2 - Managing Public Issues and Stakeholder Relationships 43