Business Ethics

Group no.1 Martinez, Randolph S. Alog, Marc Pocholo P. Lima, Christian Velasco, LA. Ng, Jeff 4BBE

Role of Ethics Ethics meaning in the dictionary is the study of morality, but ethics doesnt only have one meaning but it has a variety of meaning under its name for example: accounting ethics referring to the code that guides the professional conduct of accountants personal ethics referring to the rules by which an individual lives his or her personal life Ethics is also a kind of investigation whereas morality is the subject matter that ethics investigates. Morality The standard that an individual or a group has about what is right and wrong or good and evil. Where do these standards come from? family friends social influences (church, school, media) MORAL STANDARDS The norms about the kinds of actions believed to be morally right or wrong as well as the values placed on the kinds of objects believed to be morally good and morally bad. NONMORAL STANDARDS The standards by which we judge what is good or bad and right and wrong in a nonmoral way for example: getting fired from the office aesthetics or art Five characteristics of moral standards Involved with serious injuries or benefits Not established by law or legislature Should be preferred to other values including

self-interest Based on impartial considerations Associated with special emotions and vocabulary Ethics Its the discipline that examines ones moral standards or the moral standards of the society. It asks how these standards apply to our lives and whether these standards are reasonable or unreasonable. Example: honesty is the best policy do unto others what you want others to do unto you Ethics VS. Social Sciences Ethics is not the only way to study morality but also there are other social sciences like anthropology, psychology, and sociology that also studies morality, the only difference is that ethics is a normative study while on the other hand social sciences is under the descriptive study. NORMATIVE STUDY It is an investigation that attempts to reach conclusions about what things are good or bad or about what actions are right or wrong. DESCRIPTIVE STUDY An investigation that attempts to describe or explain the world without reaching any conclusions about whether the world is as it should be.

Introduction to Business Ethics BUSINESS ETHICS Is a specialized study of moral right and wrong that concentrates on moral standards as they apply to business institutions, organizations, and behavior. Study of moral standards and how this apply to the system and organizations through which modern societies produce and distribute goods and services and to the behavior of the people within the organization. Two views * First view is that corporations act as an individual and have intended objectives for what they do. The problem is that an organization cannot feel any pain nor pleasure and they cannot act except through human beings. * Second view is from the philosophers, that organizations are like machines whose members must blindly conform to formal rules that have nothing to do wit morality The problem is that unlike machines some members of the org. knows what they are doing and have chances to bring change to the organization. Corporate organization A corporate organization exists only if 1) there are human individuals who are in the organization 2) our linguistic and social conventions lay down that when those individuals exist in the same circumstances and relationship they shall count as a corporate organization. A corporate organization acts only if 1) Certain human individuals in the organization performed certain actions in certain circumstances 2) Our linguistic lay down that if these acts are done by the organization, it shall count as an act of their corporate organization.

Issues in Business Ethics Kinds of Ethical Issues SYSTEMATIC This are issues about the economic, political, legal, and other systems institutions within which a business operates. CORPORATE It is about the morality of activities, policies, practices, or organizational structure of an individual company taken as a whole INDIVIDUAL About particular individuals within a company and their behaviors and decisions. Globalization It is the worldwide process by which the economic and social systems of nations have become connected together so that goods, services, capital, knowledge, and other artifacts are traded and moved across national borders. Institutions that supports Globalization World Bank and the International Monetary Fund These two are the biggest financial institution in the world that facilitates the international of flow of capital as well as the spread of multinational corporations. World Trade Organization This is an international organization that helps countries on pursuing their trade on other countries. Globalization has resulted into a phenomenon that is familiar to anyone outside the country. Products that are only available in our country is now being distributed outside the Philippine borders and vice versa. The internet is also one major factor why globalization can offer unlimited access to people all over the world. social

 Globalization has enabled countries to specialize in producing and exporting products that they can produce efficiently and to trade for goods that they are not so skilled at. Multinational Corporations A company that maintains manufacturing, marketing, service, and administrative operations in many different host countries. They draw their capital, labor, and raw materials in countries that have cheap and affordable resources. GE appliances, Ford Motors, Motorola are some examples of multinational corporations Disadvantages of Globalization Poorer nations like Africa and the Soviet Union have been left behind when it comes to trade because they can only offer cheap commodities. Unemployment the fact that companies are searching for countries that offers cheap labor it comes to a point that they shut down their operations in their own country leaving many employees and workers jobless. Transferring technologies into developing countries in which they are not ready to assimilate them. Cultural differences and business ethics Ethical relativism A theory that there are no ethical standards that is absolutely true and applied or should be applied by companies and people of all societies. when in Rome do what Romans do Examples of moral relativism Arabians For Arabs it is legal for them to do bribery in business. Alaska it is morally right for them to leave their elders to die outdoors when hardships come

 In West Africa children are being kidnapped and used as slaves to work in cocoa farms that are owned by Americans. IBM an international company during the 1980s gave the Germans the data for them to track down Jews and kill them and because of that IBM became one of the successful companies of our time Can we still say that these actions are ethical since it is morally accepted in their local standards? Technology and business ethics Companies should cope up with the changing environment. Many companies have refashioned and reinvented their business to be more hi-tech and fashionable E-commerce Using technology like the internet to transact business. Ethical issues with technology Privacy The internet can display information about any person who is registered in their system. It can display peoples histories, records, name, address, bank accounts. People are arguing about their privacy the right to prohibit others from knowing things that are private. Property Work of other persons can be copied and duplicated to multiple copies without the knowledge of the original owner. Genetic engineering A large variety of techniques that allows change in the genes of the cells of humans, animals, and plants. Cloning it is an example of genetic engineering wherein the genes of a person or an animal will be duplicated in order to create a specie of the same features.

* Problem Engineered animals, humans, and plants may drive out the natural species and will bring imbalance in the food chain. Moral Development and Reasoning Moral Development Lawrence Kohlberg A psychologist who developed the six stages in the development of a persons ability to deal with moral issues. Kohlberg grouped these stages into three levels wherein each level contains two stages. The second of which is the more organized and advance perspective of each level. Preconventional stages Stage one: punishment and obedience orientation The childs reasons for doing the right thing are for him/her to avoid punishment from his parents. He is also not sensitive about the needs and desires of other people. Stage two: instrumental and relative orientation Right actions become those that can serve as instruments for satisfying the childs own needs or the needs of those for whom the child cares. Conventional stages Stage three: interpersonal concordance orientation Living to the expectations of those for whom one feels loyalty, affection, and trust such as family and friends. Doing what is right is motivated by the need to be seen as a good performer in ones own eyes and in the eyes of others. Stage four: law and order orientation Right and wrong at this more mature stage now come to be determined by loyalty to ones own larger nation or surrounding society

He/she can separate the norms generated by this system from the interpersonal relationships and motives. Postconventional, autonomous, or principled stages Stage five: social contract orientation The person becomes aware that people hold a variety of conflicting personal views and opinions and emphasizes fair ways of reaching consensus by agreement, contract, and due process. Stage six: universal ethical principles orientation The persons reasons for doing what is right is based on a commitment to these moral principles, and the person sees them as the criteria for evaluating all other moral rule and arrangements, including democratic consensus. Carol Gilligan She is a female psychologist who stated that Kholberg is more focused only on men and his theory is was based on mostly men so she argued and developed two approaches: * male approach * female approach Female approach * Females they are concerned on sustaining relationships * avoiding hurt to others * caring for their well-being Moral Reasoning The reasoning process by which human behaviors, institutions, or policies are judged to be in accordance with or in violation of moral standards.
Factual information Concerning the policy, Institution or behavior Under consideration Moral judgment on the rightness or Wrongness of the policy

Moral Standards

Moral standards involves asking: * What factual information does the person accept as for his moral judgment? * What moral standards are needed to relate this information to the moral judgment? evidence factual

* Developed moral standards incorporate qualifications, exceptions, and restrictions that limits the scope Analyzing moral reasoning First Moral reasoning should be logical Second Factual evidence cited in support of a persons judgment must be accurate, relevant, and complete. Third Moral standards involved in a persons moral reasoning must be consistent

The Pros and Cons of Business Ethics Three Objections to bringing Business Ethics to business In a free market economy, the pursuit of profit will ensure maximum social benefit. A managers most important obligation is to the company Business ethics is limited on obeying the law First Objection Manager should not impose their own values into business instead they should focus on how they will produce products that the people values. 4 points of the first objection * Stable companies do not have to compete and they maximize profit even if they have inefficient production. can

* several ways of increasing profits are immoral and results to uncontrollable pollution, tax evasion, fraud, price fixing, health hazards. * by producing what all the members of society wants or values companies are forgetting that the large segment of the society (poor and disadvantaged) cannot afford high priced commodities. * Managers should devote themselves only on making profit for the company. Second objection Mangers should only consider the interest, activities, and projects of the company without considering any ethical considerations. Alex C. Michaels - loyal agents argument As a loyal agent for hi/her employer, the manager should serve his employer the way his employer wants to be served even if its for selfinterest. 2 points of the loyal agents argument

* first point is that ethics does not matter by assuming an unapproved moral standard (the manager should serve the employer in whatever way the employer wants to be served), it will be acceptable only if it is morally qualified (the manager should serve the employer on whatever moral way the employer wants to be served) * Second point is the law of agency it is a law that specifies the duties of a person who agree to act on behalf of another party and who are authorized by an agreement so to act. Third objection * Businesspeople need to obey the law; Business ethics is essentially obeying the law. * Law and morality do not always coincide. Some laws like parking laws and dress codes have nothing to do with morality. * There are some laws that can violate our moral standards for example: Germans anti Jews Philippines lethal injection

Moral Responsibility and Blame Elements of Moral Responsibility Individual must cause or fail to prevent an avoidable injury or wrong Individual must know what he is doing Individual must act on his own free will A person is NOT morally responsible if: The person did not cause and could not prevent the injury or wrong The person did not know he was inflicting the injury or the wrong The person did not inflict the injury or the wrong of his own free will Corporate Responsibility Each individual within an organization has his/her role in the business. Every individual needs to cooperate with each other in order to achieve the companys goals. It is an unending cooperation; if a group did their task wrong the other group should be able to conceal it. Subordinates Responsibility The superior is always the one responsible for the wrongful act of his subordinates. Loyal agents argument The employee or agent is aware that what he/she is immoral. doing is