Summary Ethics in Business and Management, Chapter 1-11 PDF

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Punten in boek die belangrijk zijn:Chapter 1, Introducing Business Ethics Knowledge of business ethics is vital in the contemporary business environment. Business ethics has been fundamentally recontextualized by the forces of globalization. Sustainability is a crucial concept that helps to determin...

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Punten in boek die belangrijk zijn: Chapter 1, Introducing Business Ethics - Knowledge of business ethics is vital in the contemporary business environment. - Business ethics has been fundamentally recontextualized by the forces of globalization. - Sustainability is a crucial concept that helps to determine and frame the goals of business activities. Lecture: Business ethics is the study of business situations, activities and decisions where issues of right and wrong are addressed. Morality is concerned with the norms, values and beliefs embedded in social processes which define right and wrong for an individual or a community. Ethics is concerned with the study of morality and the application of reason to elucidate specific rules and principles that determine right and wrong for any given situation -> These rules and principles are called "Ethical Theories" Ethics rationalizes morality to produce ethical theory that can be applied to any situation. Globalization is not: Internationalization, Westernalization, Liberalization, it is Deterritorialization. It is a process which diminishes the necessity of a common and shared territorial basis for social, economic, and political activities, processes, and relations and is caused by technological progress and politics. Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs. It refers to the long-term maintenance of systems according to environmental-, economic, social considerations. -> Triple bottom line: Social/ People, Environment/ Planet, Economic/ Profit. (John Elkington). With a corporate law, a corporation is defined by legal personality, limited liability, delegated management and BoD, transferable shares, investor ownership. Milton Friedman said the social responsibility of business is to increase its profits, his arguments were: 1. Moral responsibility: Only human beings have a moral responsibility for their actions. 2. Shareholder interests: It is managers' responsibility to act solely in the interests of shareholders. 3. Role of corporations and state: Social issues and problems are the proper province of the state rather than corporate managers. Arguments against Milton Friedman are: 1. Moral responsibility: Firms also have moral responsibility for their actions. 2. Shareholder interests: It is managers' responsibility to act also in the interests of stakeholders. 3. Role of corporations and state: Social issues and problems are also the province of corporate managers.

Firms have moral responsibility because it has a: - Corporate internal decision structure > Directs decisions in line with predetermined goals -> Responsibility flowchart -> Corporate decision recognition rules - Organisational culture > Set of beliefs and values that lay out what is generally regarded as right or wrong. Chapter 2, Framing Business Ethics: Corporate responsibility, Stakeholders & Citizenship - Define CSR, - Define Stakeholder theory - Define Corporate accountability - Define Corporate citizenship Lecture: Managers also have to act in the interests of stakeholders because: - Corporate Social Responsibility: Business reasons: Moral Reasons: > Extra and/or more satisfied customers > Corporations cause social problems > Employees may be more attracted/committed > Corporations should use their power responsibly. > In sum: Enlightened self-interest >Al corporate activities have social impacts. According to Carroll's model of CSR, firm has > Philanthropic responsibilities, Desired by society > Ethical responsibilities, Expected by society > Legal responsibilities, Required by society > Economic responsibilities, Required by society - Stakeholder Theory According to Freeman's stakeholder theory: A stakeholder of an organization is any group or individual who can affect, or is affected by, the achievement of the organization's objectives. Stakeholders have legitimate claims towards the organization: - Principle of corporate rights: Corporation has obligation not to violate rights of others. - Principle of corporate effect: Corporation is responsible for effect of actions on others. Social issues and problems are also the province of corporate managers because: - Corporate accountability: Corporate accountability refers to whether a corporation is answerable in some way for the consequences of its actions. Firms have begun to take up many of the functions previously undertaken by government because of a weakened state of a rise in power of the corporations. Weakened state: - Organised irresponsibility - Rise of subpolitics Corporate power on the rise: - Deregulation - Self-regulation - Privatisation of public services

- Corporate citizenship: A limited view of CC: - This essentially equated CC with corporate philanthropy An equivalent view of CC: - This essentially equated CC with CSR An extended view of CC: - This acknowledges the extended political role of the corporation in society: > Disable or enable civil rights > Channel or block political rights > Provide or ignore social rights Marshall's theory of rights determining citizenship: > Civil rights (18th century): Liberty, bodily integrity, to own property, freedom of speech, etc. > Political rights (19th century): To vote, to run for office. > Social rights (20th century): Education, healthcare, etc.

Chapter 3, Evaluating Business Ethics: Normative Ethical Theories - There is no one best or true view of a moral dilemma. An ethical theory can be seen as a kind of 'lens' through which to focus ethical decision-making on a specific consideration. - Moral matters embrace human beings in the totality of their reason, emotion, bodily existence, social embeddedness, and past experiences. Consideration Typical question you might ask yourself Theory Egoism One's own Is this really in my, or my organization's, best long-term interests interests? Would it be acceptable and expected for me to think only of the consequences to myself in this situation? Social If I consider all of the possible consequences of my actions, for Utilitarianism consequences everyone who is affected, will we be better or worse off overall? how likely are these consequences and how significant are they? Duties to others Who do I have obligations to in this situation? What would Ethics of duty happen if everybody acted in the same way as me? Am I treating people only to get what I want for myself? or am I thinking also of what they might want too? Entitlements of Whose rights do I need to consider here? Am I respecting Ethics of rights others fundamental human rights and people's need for dignity? Fairness Am I treating everyone fairly here? Have processes been set Theories of justice up to allow everyone an equal chance? Are there major disparities between the 'winners' and 'losers' that could be avoided? Moral character Am I acting with integrity here? What would a decent, honest Virtue ethics person do in the same situation? Feminist ethics How do the other affected parties feel in this situation? Can I Care for others avoid doing harm to others? Which solution is most likely to and preserve healthy and harmonious relationships among those relationships involved? Discourse ethics What norms can we work out together to provide a mutually Process of acceptable solution to this problem? How can we achieve a resolving peaceful settlement of this conflict that avoids railroading by conflicts the most powerful player? Moral impulse Am I just simply going along with the usual practice here, or Postmodern ethics

and emotions

slavishly following the organization's code, without questioning whether it really feels right to me? How can I get closer to those likely to be affected by my decision? What do my emotions or gut feelings tell me once I'm out of the office? - The pragmatic approach welcomes theoretical approaches in normative business ethics in their variety, while at the same time accepting that they play a role alongside personal, cultural, psychological, cognitive, and context-related factors, all of which ultimately feed into a moral decision in business. lecture: Ethical theories are the rules and principles that determine right and wrong for any given situation. - Normative ethics: prescribes morally correct way of acting. - Descriptive ethics: describe how ethics decisions are actually made in business. - Ethical absolutism: - Ethical relativism:

claims there are eternal, universally applicable moral principles. claims morality is context-dependent and subjective. > Urban Egyptians believe female circumcision is wrong > Rural Egyptians believe female circumcision is right > Conclusion: there is no fact to the matter about whether it is right or wrong. -> If ethical relativism were true, criticising others for their moral beliefs would be the same as criticising them for their tastes.

Theory of utilitarianism from Bentham, Mill and Taylor. -> Ingredients are: - Consequences: 'All action is for the sake of some end and rules of action...must take their whole character and color from the end to which they are subservient'. - Happiness: 'The ultimate end is...an existence exempt as far as possible from pain, and as rich as possible in enjoyments, both in point of quantity and quality'. - Equality: 'As between his own happiness and that of others, utilitarianism requires him to be strictly impartial as a disinterested and benevolent spectator'. -> Greatest happiness principle: An action is morally right if it results in the greatest amount of good for the greatest number of people affected by the action. So it's a kind of moral cost-benefit analysis. Critics say about utilitarianism that it ignores rights of people, and demands too much. Ethics of duty from Kant: Categorical Imperative: - There are three versions: > What if everyone did that? -> Act according to principles that you can think and want to be universal principles. > Respect for autonomy -> One sense of freedom or autonomy is concerned with action, or reaching goals. -> Another sense is concerned with forming one's beliefs and desires, or setting goals. -> Act so that you treat humanity, whether in your own person or in that of another, always as an end an never as a means only. Chapter 4, Making Decisions in Business Ethics: Descriptive Ethical Theories - Various stages and influences on ethic-al decision-making in business. - Individual factors: cognitive moral development, nationality, personal values, integrity. - Situational factors: likely to be the most promising levers for attempts to manage and improve ethical decision-making.

Lecture: Utilitarianism: - Determine what alternative actions or policies are available to me in that situation - For each alternative action, estimate the direct and indirect benefits and costs that the action will probably produce for all persons affected. - For each action, subtract the costs from the benefits to determine the net utility of each action - The action that produces the greatest sum total of utility must be chosen as the ethically appropriate course of action. Virtue ethics from Artistotle. - Aristotle argues that happiness is the overarching goal we have. - Happiness means: > Living well: It's not one minute of happiness, but sustained happiness through life. > Doing good: It's not about mere feeling of happiness, but it's about what you do. - The goal of human being from the Aristotle point of view is to live in a way that realizes your talents and capacities. - Some key characters are: Courage, Humility, Liberality, Generosity, Justice, Fairness. - Courage is good to have, because you reach your goals and help others reach theirs. It lies between cowardice and recklessness. Egoism from Rand. - An action is morally right if the decision-maker freely decides an action to persue. - According to the enlightened egoism, this is only morally acceptable if invisible hand creates benefit for all Contract theory from Hobbes. - Hobbes designed idea of state of nature where life is 'solitary, poor, nasty, brutish and short'. - To get out of nature, everyone must contribute to peace, which requires that people agree to restrict their freedoms in so far as: > This contributes to peace > And everyone does that > This is enforced by sovereign. The only purpose for which power can be rightfully exercised over any member of a civilized community, against his will, is to prevent harm to others. He cannot rightfully be compelled to do or forbear because it will be better for him to do so, because it will be better for him to so, because it will make him happier, because, in the opinions of others, to do so would be wise or even right. Liberalism is about rights and freedom, but also about neutrality: The state doesn't tell you which goals are worthy and treats/makes every individual equal(ly). Natural rights are basis entitlements that should be respected always and everywhere Justice requires fair or equal treatment -> fair procedures & outcomes. John Rawls says that social and economic inequalities are allowed, but only if: - To the greatest benefit of the least advantaged - With respect to offices and positions open to all under conditions of equality of opportunity. - Injustice is simply inequalities that are not to the benefit of all.

Feminist ethics: - Active taking of responsibility, rather than merely having it. - Learn and develop from experience - Concrete principles of empathy, harmony, care, avoidance, of harm, rather than abstract principles of justice. Postmodern ethics: - Locates morality beyond sphere of rationality - Ethics as emotional moral impulse towards others - Holistic approach - Examples and 'gut feelings' rather than principles. Discourse ethics: - Norm generation by rational reflection on the real-life experiences of all relevant participants. - Different parties in a conflict should sit together and engage in a discourse about the settlement of the conflict, and ultimately provide a situation that is acceptable to all. Chapter 5, Managing Business Ethics: Tools and Techniques of Business Ethics Management - The nature of business ethics management increasingly emphasizes an external, socially-based orientation, rather than concentrating solely on ethical codes to ensure compliance. lecture: Ethical decision making is about, recognition, judgement intent and behaviour. Influences Decision making: - Individual factors: Characteristics of individual, Given at birth - Situational factors: Features of context, Work context, Intensity of issue Overview individual factors: Age and Gender

Mixed

National and Cultural Education and Employment

Significant Mixed

Psychology Personal values

Significant Significant

Personal integrity

Underresearched

Moral imagination

Underresearched

- Results contradictory - But experience may have impact - Different backgrounds: different beliefs - Type and quality of education may be influential X Are enduring beliefs that a specific mode of conduct or end-state of existence is preferable to an opposite or converse mode of conduct or end-state. Is defined as adherence to moral principles or values. Is concerned with whether one has sense of variety of possibilities and moral consequences of their decisions, the ability to imagine a wide range of possible issues, concequences, solutions.

Overwiew Situational Factors Moral intensity

Significant

Moral framing

Significant

Rewards

Significant

Authority

Significant

Bureaucracy Work roles

Significant Underresearched

Organisational culture

Significant

National context

Underresearched

- Magnitude of consequences - Concentration of effect - Using moral language likely to trigger moral thinking - Rationalisation of unethical behaviour. - Attitude that what is morally right is what is rewarded in firm. - People do what they are told to do, or what they think they are being told do. - Suppression of moral autonomy - Work roles can encapsulate a whole set of expectations about what to value, how to relate to others, and how to behave. Group norms delineate acceptable standards of behaviour within the work community Different cultures still to some extent maintain different views of what is right and wrong.

Cognitive moral development refers to the different levels of reasoning that an individual can apply to ethical issues and problems. - Preconventional level: Self-interest and external rewards - Conventional level: Expectations of others - Postconventional level: Autonomy Lawrence Kohlberg is a pioneer in this area. - Preconventional level: behaviour is determined by rewards or punishment. - Conventional level: Interpersonal accord: behaviour is determined by what peers expect from you. Social accord: behaviour is determined by what larger social group expects from you. - Postconventional level: Social contract and individual rights: behaviour determined by concern for rights. Universal ethical principles: behaviour determined by autonomous choise.

Stage 1) Obedience 2) Self interest 3) Conformity

Steal, because: Drug is only worth $200, the druggist should not ask that much He will be happier if he saves his wife His wife expects him to do so, this is what a good husband should do

4) law-and-order

5) Human rights 6) Universal human ethics

Everyone has a right to choose life, regardless of law Saving a life is more important than property rights

Not steal, because: He will be put in prison which will mean he is a bad person Prison is awful Stealing is bad, he is not a criminal, so he should not steal He has to stay within the boundaries of the law, stealing is illegal Scientist should have a fair compensation Others may need the medicine just as badly, and their lives are also important.

An individual's locus of control determines the extent to which they believe that they have control over the events in their life. Internal or external locus of control may predict how people respond to ethical problems. Business ethics management is the direct attempt to formally or informally manage ethical issues or problems through specific policies, practices and programmes. Components: Codes of ethics, Ethics consultants, etc. Code of ethics are voluntary statements that commit organizations, industries or professions to specific beliefs, values and actions and/or set out appropriate ethical behaviour for employees. Corporate-, Professional-, Industry-, Group codes of ethics Content: principles/standards, environment, consumers, bribery, competition. There is little empirical evidence to suggest that having a formal written code is sufficient or necessary for ensuring ethical behaviour. But if you want to implement a code then you maximize participation of organization members in development stage to encourage commitment and 'buy in'. Three key attributes likely to determine perceived importance or salience of stakeholders: Power, Legitimacy and urgency. Social accounting is voluntary process concerned with assessing and communicating organizational activities and impacts on social, ethical and environmental issues relevant to stakeholders. Types: Ethical, Environmental, Social, Sustainability. Good social accounting is according to Zadek achieved when there is: Inclusivity, comparability, completeness, evolution, management policies and systems, disclosure, external verification. Formal ethics programmes: - Compliance: Preventing, Detecting, Punishing - Values: Encourage commitment to company values - External: Encourage commitment to stakeholder values - Protection: Protect top management from blame

Informal ethics programmes: - Culture change: Create a more ethical culture - Cultural learning: Focus on smaller subgroups in firm Leadership, the cultural learning perspective: - Role of leadership one of participation and empowerment in order to foster moral imagination and autonomy. Chapter 6, Shareholders and...