Chapter 3 Business Ethics Business Administration .pptx

Business Ethics

1. Chapter 3 Emerging Business Ethics Issues

2. Recognizing an ethical issue A ethical issue is simply a situation, a problem, or even an opportunity that requires thought, discussion, or investigation to make a decision. Because the business world is dynamic, new ethical issues are emerging all the time. Honesty: refers to truthfulness or trustworthiness. To be honest is to tell the truth to the best of your knowledge without hiding anything. Confucius defined several levels of honesty Li, Yi, Ren

3. Li : it relates to the superficial desires of person. Li is striving to convey feelings that outwardly are to be honest but that are ultimately driven by self-interest. Yi: where a person does what is right based on reciprocity. Ren : it is based on understanding of and empathy towards others Issues related to honesty also arise because business is sometimes regarded as a “game” governed by its own rules rather than by those of society.

4. Dishonesty: defined as lake of integrity, incomplete disclosure, and unwillingness to tell the truth. Lying, cheating, and stealing are the actions usually associated with dishonest conduct. Lying can be segmented into: Causing harm or damage “White lie” is a harmless lie, especially one told in order to avoid hurting someone’s feelings or stopping them from being upset by the truth. Statements that are obviously meant to engage or entertain with no malice

5. Fairness: is the quality of being just, equitable, and impartial. There are 3 fundamental elements that seem to motivate people to be fair Equality: is about how wealth or income is distributed between employees within a company Reciprocity: a situation in which two groups agree to help each other by behaving in the same way or by giving each other similar advantages. Example: reciprocity implies that workers be compensated with wages that are approximately equal to their effort. 3. Optimization: the tradeoff between equity(that is equality or fairness) and efficiency (that is maximum productivity).

6. Integrity: the quality of being honest, whole, and sound and having strong moral principles. Businesses are expected to follow all applicable laws and regulations. Ethical business relations should be grounded on honesty, integrity, fairness, justice, and trust. These virtues becomes the glue that holds business relationships together, making everything else more effective and efficient.

7. Ethical issues and dilemmas in business Ethical issue: is a problem, situation, or opportunity that requires and individual, group, or organization to choose among several actions that must be evaluated as right or wrong, ethical or unethical. Ethical dilemma: is a problem, situation, or opportunity that requires an individual, group, or organization to choose among several wrong or unethical actions.

8. Abusive or intimidating behavior It means anything physical threats, being annoying, insult, yelling, harshness, ignoring someone and the meaning of these words can differ by person. e.g. what one person may define as yelling might be another’s definition of normal speech. Bullying: is associated with a hostile workplace where someone considered a target is threatened, harassed, or verbally abused or overly criticized. Bullying can cause psychological damage that can result in health endangering consequences to the target.

9. Lying: it related to distorting the truth The other two can becomes very troublesome for businesses. 1. Commission lying: the active use of false statements or creating a belief by words that intentionally deceive the receiver of the message. e.g. saying that a product is “homemade” when it is made in a factory is lying. 2. Omission lying: is intentionally not informing problems, safety warnings, or negative issues relating to the product, service, or company that significantly affects awareness, intention, or behavior. e.g. the tobacco manufacturers that did not allow negative researches to appear on cigarettes.

10. Conflicts of interest: exists when individual must choose whether to advance his or her own interests, those of the organization, or those of some other group. To avoid conflicts of interest, employees must be able to separate their private interests from business dealings. Bribery: is the practice of offering something (usually money) in order to gain an illicit advantage. Active bribery Passive bribery Facilitation payments: made to obtain or retain business or other improper advantages do no constitute bribery payments.

11. Discrimination: on the basis of color, religion, disability, age, marital status are all illegal. A company can be sued if it refuses to hire an individual on the basis of colour , gender, age and religion. Maintains a system of employment that unreasonably excludes an individual from employment Discriminates against an individual with respect to hiring, promotions of employment as it relates to discrimination. Discrimination can also be an ethical issue in business when company use age or other personal factors to discriminate against specific groups of customers

12. Sexual harassment: It can be defined as any repeated, unwanted behavior upon one individual by another. It may be verbal, written, or physical and can occur between people of different genders or those of the same gender. To establish sexual harassment, employee must understand the definition of a hostile work environment. 1. The conduct was unwelcome 2. The conduct was severe and so hostile or offensive 3. The conduct was such that a person would find it hostile or offensive

13. To avoid sexual misconduct should take following steps: A statement of policy A definition of sexual harassment A nonretaliation policy Specific procedures for prevention of such practices at early stages Enforce, and encourage victims of sexual harassment to report the behavior to authorized individuals Establish a reporting procedures Make sure that the company has timely reporting to the proper authorities.

14. Environmental Issues: these are becoming the significant concerns within the business community. 1. Kyoto Protocol: it is an international treaty on climate change committed to reducing emissions of carbon dioxide and other gases that produces global warming The objective is to stabilize greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous climate changes Water pollution: results from the dumping of raw sewage and toxic chemicals into rivers and oceans, from oil and gasoline spills. Fertilizers and pesticides used in farming and grounds maintenance also drain into water supplies with each rainfall.

15. Fraud: a person or thing intended to deceive others or someone intentionally misrepresents the truth or conceals important information, resulting in harm. Accounting fraud: involves a corporation’s financial statements to create a false appearance of corporate financial health. It involves an employee, accountant, or the organization itself misleading investors and shareholders. Marketing fraud: false or misleading marketing communication can destroy customer’s trust in a company.

16. Consumer fraud When a consumer attempt to deceive businesses for their own gain. Consumers engage in many other forms of fraud against businesses, including price-tag switching, lying to obtain age related discounts, and taking advantage of generous return policies by returning used items. Insider trading It is the buying or selling of stocks by insiders who possess material information that is still not public. Intellectual property rights: involve the legal protection of intellectual properties such as music, books, movies.