Jan. 29, 2008, CNN.
com
Conducting Business
Ethically and Responsibly
Actuary Analysis, from the movie Class Action
(1:40 min.)
Prof. Bauer-Ramazani
Ethical Dilemma -- definition
A predicament in which a (business) person
must resolve whether an action may be
considered unethical even if it benefits
the organization, the individual, or
both.
An ethical dilemma may arise when two
norms or values are in conflict
Identify the 2 norms or values.
Tradeoffs (pros & cons)
What Is Ethical Behavior?
Ethics
Right or wrong, good or bad,
in actions that affect others
Ethical Behavior
Conforming to individual
beliefs AND social norms
about what’s right and good
Business ethics
Ethical or unethical behavior
by employees of
organizations
Formalizing the Commitment to
Ethics
Adopting
Adopting Written
Written Codes
Codes
Instituting
Instituting Ethics
Ethics Programs
Programs
Code of Ethics
formal statement = a guide for how people within
a particular organization should act and make
decisions in an ethical fashion.
‘s Code of Business Conduct
(in 15 languages):
– Our Code of Business Conduct serves to guide the
actions of our employees, officers and directors in ways
that are consistent with our core values: honesty;
integrity; diversity; quality; respect; responsibility; and,
accountability. The Code helps our people play by the
rules wherever we operate around the world. (
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Ethical Decision Model by the
Josephson Institute of Ethics
1. All decisions must take into account and
reflect a concern for the interests and
well-being of ALL stakeholders.
2. Core ethical values and principles
ALWAYS take precedence over non-
ethical ones, e.g. self-interest.
Major
Corporate
Stakeholders
Groups, individuals,
and organizations that
are directly affected by
the practices of an
organization
Businesses have a
social responsibility
toward them.
6 Pillars of Character
(Ethical Norms)
Steps in
Making
Ethical
Decisions
Responsibility Toward Customers
Consumer
Consumer Rights
Rights
Fair
Fair Pricing
Pricing
Ethics
Ethics in
in Advertising
Advertising
Responsibility Toward
Employees
Legal and Social Commitments Ethical Commitments
Safe work environment Whistle-blowers
Equal pay
David Batstone on
whistleblowing:
Unethical behavi
or at work?
(2:46 min)
Responsibility Toward Investors
1. NO improper financial
management
2. NO insider trading
3. NO misrepresentation
of finances on financial
statements
Responsibility Toward Local
Communities
Environment
Air pollution
Water pollution
Land pollution
Clean up toxic waste
Use recycling
Growth / infrastructure
Social well-being of all members of
the community
Company Practices and Business
Ethics
Best Approach: Open, Honest, Responsive!
The Tylenol Scare Case
Lawsuits as a result of
pharmaceutical company
Merck’s announcement
about the potential side
effects of its drug Vioxx
and subsequent withdrawal
7 possible Guidelines for Making Ethical
Decisions in the Work Place
(Please refer to your handout.)
1. The Golden Rule
2. The Utilitarian Principle
Business
3. Kant’s Categorical Imperative Ethics: M
y Life in
Headlines
4. The Professional Ethic (1 min.)
5. The TV Test
6. The Legal Test
7. The Four-Way Test
Social Audits
Many companies attempt to regulate
themselves on the topic of social
responsibility and ethics. They do this
through social audits.
A social audit is a form of self-regulation
in which the company attempts to monitor
managers’ and employees’ ethical behavior.
Managing Social Responsibility
& Ethics Programs
Key steps:
Social responsibility and ethics must start at the top.
A committee of top managers must develop a plan
detailing the level of top management support.
One executive must be put in charge of the firm’s agenda.
The organization must conduct periodic social audits
Evaluate progress in achieving social responsibility goals
