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Managing Ethics (Based on Managing Business Ethics, Trevino & Nelson, chapter 1) Geoffrey G. Bell, PhD, CA University of Minnesota Duluth September 2004 Is business ethics just a fad? Business ethics as a “hot topic” in the popular media appears to be a fad, or at least a cyclic phenomenon. – Forbes’ corporate scandal sheet hasn’t been updated since Sept 2002. However, academic interest and research in the topic continues. If a fad, it’s a pervasive one – see Forbes’ corporate scandal sheet. “Bad apples” vs. “bad barrels” This gets down to a question of whether ethical lapses as seen recently are systemic or one-of-akind. People are complex actors who often lead compartmentalized lives (e.g., Ken Lay). Systemic sources: – – – Organizations may knowingly or unknowingly reward and thereby foster unethical behavior. Organizational systems may force ethical people to act unethically. Organizational checks and balances (e.g., the audit committee of the board) may not be functioning well. Ethics as principle vs. ethics as action If ethics is defined in terms of “a set of principles” then how can one differentiate between sets of principles? Text (and class) will focus on conduct – actions – as basis of ethics. – Ethical behavior is focus. Therefore, text (and class) is about managing behavior rather than developing principles, although course will challenge your principles (why you believe what you do). A model of the ethical decision-making process Individual characteristics: •Individual differences •Cognitive biases Individual ethical decisionmaking & behavior Moral awareness Moral judgment Ethical Behavior Organizational characteristics: •Group & organizational pressures •Organizational culture Ethics and the law Ethics Ethics Law Law America China