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Business Ethics and
Sustainability Module
Dr Chris Doran
Maxwell 328
[email protected]
Lecture 1 – Introduction to Module
Business Ethics + Sustainability
TOPICS
Ethical Leadership
Global Ethics
Ethical Codes of Conduct
History of Business Ethics
Business Ethics Theory
Business Sustainability
Corporate Social Responsibility
Business and the Environment
Ethics and the Internet
Ethics in the Supply Chain
Future of Business Ethics and CSR
Student Charter
Reminder
Chris’s Tips to get a
good mark
• Attend all sessions
• Be up to date with the news, what are the ethical
issues
• Be innovative and creative
• Read around, see further reading on BB
• 3rd year is not easy – expectations are high
• Think about application
• Know about the themes of the Expo
• Get involved ask and answer questions
• The early bird …………….
Welcome to your Course
Lecture Breakdown:
45 min, Break, then 45 min
WHAT IS ETHICS?
Definition of Ethics:
 “INQUIRY INTO THE NATURE AND
GROUNDS OF MORALITY WHERE THE
TERM MORALITY IS TAKEN TO MEAN
MORAL JUDGMENTS, STANDARDS AND
RULES OF CONDUCT” (1)
Determining what is right and what is wrong
 BY ITS NATURE, THE AREA OF BUSINESS
ETHICS IS CONTROVERSIAL AND THERE IS
NO WORLDWIDE ACCEPTED APPROACH
(1) BUSINESS ETHICS – ETHICAL DECISION MAKING AND CASES BY O C FERREL, JOHN FRAEDRICH AND LINDA FERRELL, SEVENTH EDITION, PUBLISHER: HOUGHTON MIFFLIN
COMPANY, 2008.
What is ethics?
http://www.youtube.com/user/appliedethicscenter?feature=mhum#p/u/2/vmVu66Fpd9U
Business Ethics is the study of standards of
business behaviour which promote human
welfare and ‘the good’
"Ethics has to do with what my feelings tell me is right or wrong."
"Ethics has to do with my religious beliefs."
"Being ethical is doing what the law requires."
"Ethics consists of the standards of behaviour our society accepts."
"I don't know what the word means."
Michael Josephson, in Chapter 1 of Ethical
Issues in the Practice of Accounting,
describes the “Ten Universal Values:
“Honesty, integrity, promise keeping, fidelity,
fairness, caring, respect for others, responsible
citizenship, pursuit of excellence, and
accountability.”
President
Lincoln
said:
Honor is
better
than
honors.
INDIVIDUALS AND
ETHICAL ISSUES
ITEMS THAT EMPLOYEES STEAL
FROM THE WORKPLACE
60
50
60%
40%
40
30
20
10
0
SOURCE: “Top Items Employees Pilfer” Vault’s Office Survey 2006
32%
28%
28%
A SURVEY OF NEARLY 25,000
STUDENTS REVEALED THE
FOLLOWING:
 62% ADMITTED CHEATING IN EXAMINATIONS AT
LEAST ONCE
 35% CONFESSED TO COPYING FROM THE INTERNET
 27% ADMITTED SHOPLIFTING
 23% OWNED UP TO CHEATING TO WIN IN SPORTS
IF TODAY'S STUDENTS ARE TOMORROW’S BUSINESS
LEADERS….THEN IS IT LIKELY THAT THERE WILL
BE A CORRELATION BETWEEN THEIR BEHAVIOUR
TODAY AND THEIR BEHAVIOUR IN THE FUTURE?
(2) Michael Josephson, “The Biennial Report Card 2004
Business Ethics is nothing
new
Some philosophers have argued that moral concepts are
timeless, limited and unchanging, others emphasise that
moral concepts change as social life changes (MacIntyre:
2009:1). This is supported by Loucks (1986) who has
argued that business ethics dilemmas have been
prevelant since 560 B.C. Loucks refers to the Greek
thinker Chilon, who registered the opinion that “a
merchant does better to take a loss than to make a
dishonest profit.” (Loucks, 1986:2) His reasoning was
that a loss may be painful for a while, but dishonesty
hurts forever. This case identifies that although societal
issues change the business ethics has always been
prevalent in some form.
The reputation of a thousand years may be
determined by the conduct of one hour.
Japanese proverb
The Role of Business
Ethics Today
• Due to the internet the world demands
organisations to be transparent.
• Spread of news means the world can quickly find
out about behaviour.
• Competition increase means the public are more
probable to give their £ to ethical corporations.
• It is no longer acceptable for organisations simply
to make as much money as possible.
• Still difficult to depict what is right and wrong.
Who is responsible for ethics. What society
demands. The law. Codes of conduct and rise of
Corporate Social Responsibility. (CSR)
• In recent years there have been several business
scandals that caused serious damage to the
credibility of the companies involved, occasionally
the entire industry in which they operate,
banking/oil.
Paradigms to Understand Our Values
THE WORD PARADIGM IS MORE COMMONLY USED TODAY TO
MEAN:
MODEL, THEORY, PERCEPTION, ASSUMPTION OR FRAME OF
REFERENCE
 THE WAY WE “SEE” THE WORLD –
NOT IN TERMS OF OUR VISUAL SENSE OF SIGHT,
BUT IN TERMS OF PERCEIVING, UNDERSTANDING AND
INTERPRETING
 PARADIGMS ARE LIKE PERSONAL MENTAL MAPS
REALITY?
VALUES?
15
What Shapes Our Own
Ethics?
CULTURE
CITIZENSHIP
AGE
FRIENDS
SEX
FAMILY
RELIGION
UPBRINGING
PARENTS
TV
BELIEFS
RACE
MONEY
STORIES
ADVERTISING
NEWSPAPERS
THE INTERNET
WORK
SEXUALITY
THE NEWS
EXPERIENCE
THE LAW
EDUCATION
DISABILITIES
PARADIGM TEST
Say What you See
PARADIGMS
EXAMPLE: MAKING THE WRONG ASSUMPTIONS:
A DEPARTMENTAL STORE MANAGER HEARD ONE OF HIS SALES
ASSISTANTS SAY TO A CUSTOMER,
“NO WE HAVE NOT HAD ANY FOR SOME WEEKS NOW AND IT
DOESN’T LOOK AS IF WE WILL BE GETTING ANY SOON”
THE MANAGER WAS SHOCKED AT THE SALES ASSISTANT’S
COMMENTS TO THE CUSTOMER. THE MANAGER CONFRONTED
THE SALES ASSISTANT SAYING,
“NEVER, NEVER SAY WE DO NOT HAVE SOMETHING IN, IF WE
DO NOT HAVE AN ITEM ,SAY THAT IT IS ON ORDER AND WILL
BE IN THE STORE SHORTLY. NOW WHAT DID THE CUSTOMER WANT?”
“RAIN”, SAID THE SALES ASSISTANT
ACTIONS/ THE WAY WE MANAGE IS DIRECTLY RELATED TO OUR PARADIGMS
18
Whether we derive a code of ethics from
religious beliefs, a study of history and
literature, or personal experience and
observation: We can all agree upon some
basic values.
Sources of Ethical Norms
Fellow Workers
Social
Experiences
Family
Regions of
Country
Profession
The Individual
Conscience
Friends
The Law
Employer
Religious
Beliefs
Society at Large
20
Ethics and the Law
• Law often
represents an
ethical
minimum
• Ethics often
represents a
standard that
exceeds the
legal minimum
Frequent Overlap
Ethics
Law
ETHOS
Ethos
Ethos is a Greek word originally
meaning "accustomed place"
Ethos forms the root of ethikos,
meaning "moral, showing moral
character". To the Greeks ancient
and modern, the meaning is
simply "the state of being", the
inner source, the soul, the mind,
and the original essence, that
shapes and forms a person or
animal. Late Latin borrowed it as
ethicus, "moral philosophy") is
the origin of the modern English
word ethics
Ethos, according to The Oxford
English Dictionary, is defined as "the
characteristic spirit, prevalent tone of
sentiment, of a people or community;
the 'genius' of an institution or
system", although it originally has its
roots in the Greek word 'etho' or "to be
accustomed to.“ However, the word
ethos has been translated to contain
many different meanings within the
English language. One such definition
in accordance with the opinion of S.
Michael Halloran is that the concept of
ethos listens to accepted standards,
rather than what is more modernly
thought of as character unique to a
certain individual.
THE ETHICAL DILEMMA
 FOR A BUSINESS TO SURVIVE IT MUST MAKE A PROFIT
 IF PROFITS ARE ACHIEVED THROUGH MISCONDUCT
THE BUSINESS IS LIKELY TO HAVE A SHORT
EXISTENCE
 COMPANIES SUCH AS ARTHUR ANDERSON, ENRON,
WORLDCOM AND SUNBEAM MADE HEADLINES DUE TO
WRONGDOING AND SCANDAL RESULTING IN LEGAL
AND FINANCIAL REPERCUSSIONS
 BUSINESSES NEED TO BALANCE THEIR DRIVE
TOWARDS PROFITS AGAINST THE NEEDS AND
DESIRES OF SOCIETY
Ethics doesn't give right answers
Ethics doesn't always show the right answer to moral problems.
Indeed more and more people think that for many ethical issues
there isn't a single right answer - just a set of principles that can
be applied to particular cases to give those involved some clear
choices.
Some philosophers go further and say that all ethics can do is
eliminate confusion and clarify the issues. After that it's up to
each individual to come to their own conclusions.
Ethics can give several answers
Many people want there to be a single right answer to ethical
questions. They find moral ambiguity hard to live with because
they genuinely want to do the 'right' thing, and even if they can't
work out what that right thing is, they like the idea that
'somewhere' there is one right answer.
But often there isn't one right answer - there may be several right
answers, or just some least worst answers - and the individual
must choose between them.
For others moral ambiguity is difficult because it forces them to take
responsibility for their own choices and actions, rather than
falling back on convenient rules and customs.
Differences between Business
Ethics and Corporate Social
Responsibility
Business Ethics
CSR
Differences between ethics and CSR
Business Ethics
The whole encompassing behaviour of
businesses
CSR
CSR as an element business ethics
Business Ethics is the VERY broad field CSR is more narrowly about a
of study concerning good ethical
company’s SOCIAL obligations…that is,
decision-making in commercial contexts. a company’s obligations to society in
general.
Business Ethics is concerned with not
just social obligations, but also
obligations to employees, customers,
suppliers and competitors.
CSR is about the extent to which
companies owe something to “society at
large” (i.e., those who do not have a
direct involvement with the business).
Business ethics is more about “good” or
“bad” conduct according to moral
standards
CSR : integrating economic, social and
environmental targets in one strategy…
Terms are difficult to define and these inconsistences mean debate on the differences
Differences between
business ethics and CSR
Some people claim that the two overlap interchange and even
mean the same. Others claim they are in direct and stark contrast
Difference between Business Ethics and Social Responsibility
Though business ethics and social responsibility seem to be overlapping, there
has always been a contradiction between the two. Companies, though they
are committed to be socially responsible for their behaviour have been found
to be engaging in acts that cannot be called ethical.
What is good for the society is sometimes not good for the business, and what is
good for the business is almost always not good for the society.
If the society is conscious, it responds in such a way that businesses are forced to
behave responsibly. The same applies to the administration and the judiciary
of any country.
Selling of liquor and tobacco in any society is not against business ethics though it
may be against the principles of social responsibility. The same applies to
lotteries and gambling. But it is certainly against business ethics as well as
against social responsibility to entice minors to engage in smoking and
drinking.
Sustainability
We did not inherit this world from our parents, we borrowed it from our
children.
One day we will return it to them. When we do, it should be every bit as
bountiful as it was when we found it.
This is what sustainability means. (Ireland Pavilion, Milano Expo 2015)
Ethical Relatvism
Ethical relativism definition
In ethics,
the belief that nothing is objectively right or wrong and that the definition of
right or wrong
depends on the prevailing view of a particular individual, culture, or historic
al period.
That there is no moral standard which is applicable to any one people or
culture or time.
When in Rome do as the Romans do.
Ethical Absolutism
Ethical absolutism definition
It is the theory holding that morals, values, goodness or evil are absolute and
are not changeable or dependent on other factors.
When in Rome, one should do what is right at Home no matter what you can
get away with and regardless of what Romans do.
Seminar
Session:
Carrier Bags
The Trolley Dilemma
http://www.youtube.com/watch?v=6WB3Q5E
F4Sg