BUSINESS ETHICS MA in Human Resource Management Oliver Parker, MBA 28th November 2007
Contents <ul><li>Everyday Concepts </li></ul><ul><li>Definitions </li></ul><ul><li>Ethical Philosophy & Dilemmas </li></ul...
Peter Drucker, 1990 <ul><li>Ethics: a code of individual behaviour only </li></ul><ul><li>Business has no ethical responsi...
Everyday Concepts The ‘Ten Commandments’ <ul><li>l.  I am the LORD thy GOD,  </li></ul><ul><li>thou shalt NOT have strange...
Everyday Concepts The ‘Ten Commandments’ <ul><li>Vl.  Thou shalt NOT commit adultery.  </li></ul><ul><li>Vll.  Thou shalt ...
Everyday Concepts <ul><li>CAST NOT THE FIRST BLOW </li></ul><ul><li>PRIDE COMES BEFORE A FALL </li></ul><ul><li>JAW, JAW, ...
Everyday Concepts   Common ‘Lived’ Values <ul><li>Strengths </li></ul><ul><li>Honesty </li></ul><ul><li>Loyalty </li></ul>...
Definitions <ul><li>Ethics  is about identifying both the rules that govern human behaviour, and the “good values” that ar...
Definitions <ul><li>But what happens when a situation dictates that one rule must over-rule another? </li></ul><ul><li>Thu...
Ethical Philosophy & Dilemmas <ul><li>Managers face a range of ethical dilemmas:  </li></ul><ul><ul><li>Conflicting object...
Ethical Philosophy & Dilemmas <ul><li>Ethical thinking goes back thousands of years. </li></ul><ul><ul><li>Sumer, Babylon,...
Ethical Philosophy & Dilemmas <ul><ul><li>Indian sub-continent – Aryan civilisation about 2000 BC, first writings around 1...
Ethical Dilemmas Case Study: The Ford Pinto <ul><li>$11 for a product improvement, $200,000 for a life </li></ul><ul><ul><...
Ethical Systems <ul><li>Ethical systems </li></ul><ul><ul><li>Universalism: - holds that there are “universal” truths, suc...
Ethical Systems   Utilitarianism <ul><li>Three forms of Utilitarianism: </li></ul><ul><ul><li>Egoism : individuals are all...
Personal Ethical Standards <ul><li>Three forms of Personal Ethical Standards: </li></ul><ul><ul><li>Pre-conventional  – de...
Corporate Ethical Standards <ul><li>Foundations of Business Ethics </li></ul><ul><ul><li>Charity Principle  – Wealthier pr...
Corporate Ethical Standards <ul><li>Stakeholders Concept  – concern for all groups  – Employees, Suppliers, Customers, etc...
Corporate Ethical Standards <ul><li>Corporate ethical standards seem to fall into four groups: </li></ul><ul><ul><li>“ Mig...
Corporate Ethical Standards <ul><ul><li>“ Do what everyone else does”  – decisions are based on what seems to be currently...
Corporate Ethical Standards <ul><li>Reducing unethical behaviour : </li></ul><ul><ul><li>Consistent leadership </li></ul><...
Leadership - Traps 1 Kathryn Alexander, Ethical Impact Inc. <ul><li>Command & Control </li></ul><ul><ul><li>Directive </li...
Leadership - Traps 2 Kathryn Alexander, Ethical Impact Inc. <ul><li>Competitive </li></ul><ul><ul><li>Winning most importa...
Leadership - Traps 3 Kathryn Alexander, Ethical Impact Inc. <ul><li>Relationship </li></ul><ul><ul><li>Collaborative </li>...
Leadership - Traps 4 Kathryn Alexander, Ethical Impact Inc. <ul><li>Innovative - Self Expressive </li></ul><ul><ul><li>sel...
Business Ethics Case Studies for you… <ul><li>Is there evidence of any   Common ‘Lived’ Values  within the organisation? <...
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Bcu Op Mahrm (Business Ethics)

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Business Ethics...is this an oxymoron?

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Bcu Op Mahrm (Business Ethics)

  1. 1. BUSINESS ETHICS MA in Human Resource Management Oliver Parker, MBA 28th November 2007
  2. 2. Contents <ul><li>Everyday Concepts </li></ul><ul><li>Definitions </li></ul><ul><li>Ethical Philosophy & Dilemmas </li></ul><ul><li>Ethical Systems </li></ul><ul><li>Personal Ethical Standards </li></ul><ul><li>Corporate Ethical Standards </li></ul>
  3. 3. Peter Drucker, 1990 <ul><li>Ethics: a code of individual behaviour only </li></ul><ul><li>Business has no ethical responsibilities separate from the individual </li></ul><ul><li>“ there’s little difference between Lockhheed’s paying (extorted money) to the Japanese airline and the pedestrian in Central Park handing over his wallet to a mugger.” (p236) </li></ul>
  4. 4. Everyday Concepts The ‘Ten Commandments’ <ul><li>l.  I am the LORD thy GOD, </li></ul><ul><li>thou shalt NOT have strange gods before me. </li></ul><ul><li>ll.  Thou shalt NOT take the name of </li></ul><ul><li>the LORD thy GOD in vain.  </li></ul><ul><li>Lll. Remember thou keep holy </li></ul><ul><li>the Sabbath Day.  </li></ul><ul><li>lV. Honour thy father and thy mother.  </li></ul><ul><li>V. Thou shalt NOT kill.  </li></ul>
  5. 5. Everyday Concepts The ‘Ten Commandments’ <ul><li>Vl. Thou shalt NOT commit adultery.  </li></ul><ul><li>Vll.  Thou shalt NOT steal.  </li></ul><ul><li>Vlll. Thou Shalt NOT bear false </li></ul><ul><li>witness against thy neighbour.  </li></ul><ul><li>lX.  Thou shalt NOT covert thy </li></ul><ul><li>neighbour’s wife. </li></ul><ul><li>X. Thou shalt NOT covert thy </li></ul><ul><li> neighbours goods. </li></ul>
  6. 6. Everyday Concepts <ul><li>CAST NOT THE FIRST BLOW </li></ul><ul><li>PRIDE COMES BEFORE A FALL </li></ul><ul><li>JAW, JAW, NOT WAR, WAR </li></ul><ul><li>MAKE LOVE NOT WAR </li></ul><ul><li>A MAN IS PRESUMED INNOCENT UNTIL PROVEN GUILTY </li></ul><ul><li>ALL POWER TENDS TO CORRUPT, AND ABSOLUTE POWER TENDS TO CORRUPT ABSOLUTELY </li></ul>
  7. 7. Everyday Concepts Common ‘Lived’ Values <ul><li>Strengths </li></ul><ul><li>Honesty </li></ul><ul><li>Loyalty </li></ul><ul><li>Honour </li></ul><ul><li>Inventiveness </li></ul><ul><li>Initiation process for inclusion </li></ul><ul><li>Tradition </li></ul><ul><li>Thrift </li></ul><ul><li>Optimism </li></ul><ul><li>Production </li></ul><ul><li>One half of these values are focused on protection </li></ul><ul><li>one half are focused on enhanced interaction </li></ul><ul><li>misapplication creates corruption </li></ul>Jane Jacobs, Systems of Survival
  8. 8. Definitions <ul><li>Ethics is about identifying both the rules that govern human behaviour, and the “good values” that are worth seeking out </li></ul><ul><li>Values are principles of conduct such as caring, honesty, keeping promises, loyalty, fairness, and so on </li></ul><ul><li>We can all understand these, and most would say that they try to live by these rules… </li></ul>
  9. 9. Definitions <ul><li>But what happens when a situation dictates that one rule must over-rule another? </li></ul><ul><li>Thus, ethics is the system of rules that governs the ordering of values </li></ul><ul><li>“ Ethics is a set of principles often defined as a code that acts as a guide to conduct. This set of principles provides a framework for acting.” (Lawton, 1968) </li></ul><ul><li>however Farnham (2005) says... </li></ul><ul><li>Morals are concerned with the ‘right’ actions and how we live up to them </li></ul><ul><li>So YOU maybe aware of ethical principles, but still act immorally! </li></ul>
  10. 10. Ethical Philosophy & Dilemmas <ul><li>Managers face a range of ethical dilemmas: </li></ul><ul><ul><li>Conflicting objectives, performance data, bribery, rationing </li></ul></ul><ul><li>Ethical thinkers address questions such as: </li></ul><ul><ul><li>What is the meaning of ethical concepts: good and r ight ? </li></ul></ul><ul><ul><li>How can a person reach a conclusion about an ethical dilemma? On what can this conclusion be based? </li></ul></ul><ul><ul><li>Do ethical dilemmas have answers that would be universally accepted as right, proper, and appropriate? </li></ul></ul><ul><ul><ul><li>E.g. Shareholder vs. Stakeholder </li></ul></ul></ul>
  11. 11. Ethical Philosophy & Dilemmas <ul><li>Ethical thinking goes back thousands of years. </li></ul><ul><ul><li>Sumer, Babylon, etc. Civilisation began around 6500BC; 1 st ethics around 3800 BC </li></ul></ul><ul><ul><li>Chinese civilisation goes back to around 5000 BC, first writings on ethics about 3500BC </li></ul></ul><ul><ul><li>Egyptian civilisation from c4000 BC, first writings on ethics 2700BC </li></ul></ul>
  12. 12. Ethical Philosophy & Dilemmas <ul><ul><li>Indian sub-continent – Aryan civilisation about 2000 BC, first writings around 1400 BC </li></ul></ul><ul><ul><li>Greece about 1800 BC, first writings about 1500 BC. The Iliad (Homer, c850 BC) the first story ever written down containing an ethical dilemma </li></ul></ul><ul><ul><li>Classical Greece, 492 – 323 BC the great writings on Ethics which underpin European civilisation – Pythagoras, Socrates, Plato </li></ul></ul>
  13. 13. Ethical Dilemmas Case Study: The Ford Pinto <ul><li>$11 for a product improvement, $200,000 for a life </li></ul><ul><ul><li>Ford launch the Pinto in 1970 to compete against small ‘foreign’ cars </li></ul></ul><ul><ul><li>Rear-end crash tests – petrol tank could fail. </li></ul></ul><ul><ul><li>Defect found after assembly line tooling had been made. </li></ul></ul><ul><ul><li>To change would cost millions (re-tooling and delays). </li></ul></ul><ul><ul><li>1968, new US safety standard under discussion with auto industry. </li></ul></ul><ul><ul><li>Ford lobby to delay introduction and succeed. </li></ul></ul><ul><ul><li>Ford carry out cost-benefit study: into of $11 petrol tank improvement not economical. </li></ul></ul><ul><ul><li>Cost $137M outweighs benefit deaths & injuries of $50M (180 deaths @ $200,000). </li></ul></ul><ul><ul><li>Result: 500-900 suffered death by burning in Pinto crashes. Ford settle out of court. </li></ul></ul><ul><ul><li>The Pinto sold at a rate of 500,000 units per year. </li></ul></ul>
  14. 14. Ethical Systems <ul><li>Ethical systems </li></ul><ul><ul><li>Universalism: - holds that there are “universal” truths, such as honesty, and that these should be universally adopted because they govern the “right” behaviour </li></ul></ul><ul><ul><li>Utilitarianism: - holds that the individual’s view should be subject to the notion of “the greater good of society” </li></ul></ul>
  15. 15. Ethical Systems Utilitarianism <ul><li>Three forms of Utilitarianism: </li></ul><ul><ul><li>Egoism : individuals are allowed to do whatever they wish, so long as it injures or impinges on nobody else </li></ul></ul><ul><ul><li>Rule Utilitarianism : Society makes rules and customs which weigh and balance conflicting values </li></ul></ul><ul><ul><li>Act Utilitarianism : Society chooses whatever brings the greatest good for the greatest number </li></ul></ul>
  16. 16. Personal Ethical Standards <ul><li>Three forms of Personal Ethical Standards: </li></ul><ul><ul><li>Pre-conventional – decisions are made on the basis of concrete rewards or punishments </li></ul></ul><ul><ul><li>Conventional – decisions are made based on expectations of ethical behaviour held by groups and institutions </li></ul></ul><ul><ul><li>Principled – follow a pattern of ethical principles, which may or may not correspond with local conventions and laws </li></ul></ul>
  17. 17. Corporate Ethical Standards <ul><li>Foundations of Business Ethics </li></ul><ul><ul><li>Charity Principle – Wealthier provide for the poor </li></ul></ul><ul><ul><li>Stewardship Principle – strong and rich should look after resources, to husband and increase them for the future </li></ul></ul><ul><ul><li>Social Responsibility Principle – meeting legitimate expectations of society </li></ul></ul><ul><ul><li>These are socially-derived… </li></ul></ul>
  18. 18. Corporate Ethical Standards <ul><li>Stakeholders Concept – concern for all groups – Employees, Suppliers, Customers, etc </li></ul><ul><li>Utilitarian concept – to do the most good for the most people </li></ul><ul><li>Theory of rights – stresses the basic rights of all people, including the rights of minorities </li></ul><ul><li>Theory of Justice – tries to make decisions which offer justice to the majority </li></ul>
  19. 19. Corporate Ethical Standards <ul><li>Corporate ethical standards seem to fall into four groups: </li></ul><ul><ul><li>“ Might equals right” – decisions are based on strength of the manager or organisation </li></ul></ul><ul><ul><li>“ Golden Rule” behaviour – based on the notion: </li></ul></ul><ul><ul><ul><li>“ Do unto others as you would have them do to you” or, </li></ul></ul></ul><ul><ul><ul><li>“ Would you do that if your mother was here watching you?” </li></ul></ul></ul>
  20. 20. Corporate Ethical Standards <ul><ul><li>“ Do what everyone else does” – decisions are based on what seems to be currently accepted business practice </li></ul></ul><ul><ul><li>Intuitive approach – decisions are based on doing “whatever feels ‘right’.” </li></ul></ul><ul><ul><li>“ Enron believes it has a responsibility to conduct itself to certain basic tenets of human behavior.” </li></ul></ul><ul><ul><li>“ This Code of Business Conduct and Ethics applies to all employees, officers and directors of British Airways.” </li></ul></ul>
  21. 21. Corporate Ethical Standards <ul><li>Reducing unethical behaviour : </li></ul><ul><ul><li>Consistent leadership </li></ul></ul><ul><ul><li>Traditions </li></ul></ul><ul><ul><li>Written ethical code </li></ul></ul><ul><ul><li>Training </li></ul></ul><ul><ul><li>Rewards </li></ul></ul><ul><ul><li>Open Climate </li></ul></ul><ul><ul><li>Controls </li></ul></ul><ul><ul><li>Punishments </li></ul></ul>Does management show moral leadership… What are the traps?
  22. 22. Leadership - Traps 1 Kathryn Alexander, Ethical Impact Inc. <ul><li>Command & Control </li></ul><ul><ul><li>Directive </li></ul></ul><ul><ul><li>Obedience </li></ul></ul><ul><ul><li>Top-down </li></ul></ul><ul><ul><li>Inflexible </li></ul></ul><ul><ul><li>Fear generating </li></ul></ul><ul><ul><li>Distrusting </li></ul></ul><ul><li>Malicious compliance </li></ul><ul><li>Limits risk taking </li></ul><ul><li>Limits inventiveness </li></ul><ul><li>Limits responsiveness </li></ul><ul><li>Generates self-protection </li></ul>
  23. 23. Leadership - Traps 2 Kathryn Alexander, Ethical Impact Inc. <ul><li>Competitive </li></ul><ul><ul><li>Winning most important </li></ul></ul><ul><ul><li>Creative </li></ul></ul><ul><ul><li>Pushes the limits </li></ul></ul><ul><ul><li>Secretive </li></ul></ul><ul><ul><li>Political </li></ul></ul><ul><li>Deception tolerated </li></ul><ul><li>Self-protective </li></ul><ul><li>Crafty </li></ul><ul><li>Inconsiderate of others </li></ul><ul><li>Ends justify the means </li></ul><ul><li>Vindictive </li></ul>
  24. 24. Leadership - Traps 3 Kathryn Alexander, Ethical Impact Inc. <ul><li>Relationship </li></ul><ul><ul><li>Collaborative </li></ul></ul><ul><ul><li>Quality & learning a priority </li></ul></ul><ul><ul><li>Experimentation fostered </li></ul></ul><ul><ul><li>Group vs. personal win </li></ul></ul><ul><li>Relationship more important than truth </li></ul><ul><li>Group-think </li></ul><ul><li>Assumes others are like-minded </li></ul>
  25. 25. Leadership - Traps 4 Kathryn Alexander, Ethical Impact Inc. <ul><li>Innovative - Self Expressive </li></ul><ul><ul><li>self-managing </li></ul></ul><ul><ul><li>Experimental </li></ul></ul><ul><ul><li>Inventive & creative </li></ul></ul><ul><ul><li>Independent </li></ul></ul><ul><li>Rebellious </li></ul><ul><li>Resistant-to-direction </li></ul><ul><li>Resentful of authority </li></ul>
  26. 26. Business Ethics Case Studies for you… <ul><li>Is there evidence of any Common ‘Lived’ Values within the organisation? </li></ul><ul><li>What are the Ethical Dilemmas within the company? </li></ul><ul><li>Ethical Systems – Universalism vs. Utilitarianism? </li></ul><ul><li>Does the organisation operate to agreed Corporate Ethical Standards ? </li></ul><ul><li>Does the company have any systems in place for reducing unethical behaviour ? </li></ul><ul><li>How would you describe the Management style ? </li></ul>

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