Download The Difficulty with Conflicting Values: Societally Accepted vs

Bernard Edwards
Before
After
UTube
• Bernard Ebbers co-founded the
telecommunications company WorldCom.
• In 2005, he was convicted of fraud and conspiracy
in one of the biggest accounting scams in the US.
WorldCom's false financial reporting resulted in a
$11-billion loss to investors. He is currently
serving a 25-year prison term.
•
http://business.rediff.com/slideshow/2009/may/14/slide-show-1-worlds-
Ethics
The study of what is good and evil, right
and wrong, and just and unjust. (p.180)
– Descriptive Ethics deals with what is
– Normative Ethics deals with what ought
to be
– Business Ethics is the application of
ethics to the business setting.
• Theory of Amorality: The belief that
business should be conducted without
reference to the full range of ethical
standards, restraints and ideals in society.
• Theory of Moral Unity: Business
actions are judged by the general ethical
standards of society, not by a special set of
more permissive standards,
Types of Management Ethics
• Immoral
– Recognize the ethical issues involved and
choose to do the wrong thing.
• Moral
– Recognize the ethical issues involved and
choose to do the right thing.
• Amoral
– Do not consider the ethical implications of an
action or believe that ethics are irrelevant.
Major Sources of Ethical Values in
Business
McGraw-Hill/Irwin
7-6
© 2006 The McGraw-Hill Companies, Inc. All rights reserved.
The Overlap Model of Law,
Ethics and Morals
• While all three approaches of law, ethics,
and morals attempt to give us guidance as to
the propriety of our conduct, they do not
always give us the same answers.
Definitions
• Ethics: Rules of conduct based on
consensually-accepted standards of
behavior. (Conventional Approach)
• Morals: Absolute Precepts of personal
behavior based on religion or philosophy.
(Principles Approach)
• Law: Formal standards that permit or
forbid certain behaviors.
Approaches to Ethics
• Conventional Approach
– Ethical Relativism: Culture
• Principles Approach
– Moral Absolutes: Religion and Philosophy
• Law
– Codified Ethical Expectations
Conventional Approach: Ethics
Culture
• Our pursuit of self-interest ought to be bounded
by the standards of society.
• Behaviors are judged right or wrong based on
their agreement with prevailing norms of society
or consensually accepted standards of behavior
• Because this approach is based on consensus,
our notion of what is right or wrong may vary
over time and among different societies.
Ethical Universalism
• The theory that because human nature is
everywhere the same basic ethical rules are
applicable in all cultures.
Ethical Relativism
Ethical relativism is the doctrine that the
moral rightness and wrongness of actions
vary from society to society and that there
are not absolute universal moral standards
on all men at all times. Accordingly, it
holds that whether or not it is right for an
individual to act in a certain way depends
on or is relative to the society to which he
belongs.
John Ladd
Follow the Law Approach
• “Law is the public’s agency for translating morality
into explicit social guidelines and practices for
stipulating punishments for offenses.”
--Beachamp and Bowie (2001)
• It is not uncommon (especially in business situations)
for people to equate law and ethics.
• “…ethical behavior is typically thought to reside
above behavior required by the law. This is the
generally accepted view of ethics…. we would
certainly say that obedience to the law is generally
regarded to be minimum standard of behavior.”
-- Carrol & Buchholz (2003)
Compensatory Damages
• Payments awarded to redress concrete
losses suffered by injured parties
Punitive Damages
• Payments in excess of a wronged party’s
actual losses. They are awarded to deter
similar actions and punish a corporation that
has exhibited malicious and willful
misconduct.
Principles Approach: Morals
• Right or wrong is a personal choice, based
on unchanging standards of right and wrong
(principles) and what society thinks is not
relevant to moral decision making.
• A key issue in the principles approach
concerns the source of these absolutes.
• Those using this approach to ethics turn to
religion, philosophy and their own
consciences to answer that question.
Principle Approach: Philosophy
• Consequentialist: Ends
– An action is right if its consequences are good.
– Utilitarianism
• Deontological: (Deon = Duty) Means
– An action is right or wrong in and of itself,
regardless of its consequences.
– Rights
– Justice
• Virtue: Being, Good Character
The Overlap Model of Law,
Ethics and Morals
• “A law-abiding person is not necessarily morally
sensitive or virtuous, and the fact that something is legally
acceptable does not imply that it is morally acceptable….
A related problem involves the belief that a person found
guilty under law is therefore morally guilty. Such
judgments are not necessarily correct but rather depend
on the moral acceptability of the law on which the
judgment has been reached…. Taken together, these
considerations lead to the following conclusion: If
something is legal, it is not necessarily moral; if
something is illegal, it is not necessarily immoral.”
--Beachamp and Bowie 2001
Overlap Model
Actions are ethical, moral, and legal
Ethics
Morals
Law
Overlap Model
Actions are ethical and legal, but not moral.
(e.g. abortion)
Ethics
Morals
Law
Overlap Model
Ethics
Morals
Law
Actions are moral and legal, but not ethical.
(e.g. laws protecting the privacy of aids patients, Sunday closing laws)
Overlap Model
Action is moral and ethical, but not legal.
(e.g. Sodomy laws with regard to married couples.)
Morals
Ethics
Law
Overlap Model
Actions are ethical, but not moral or legal.
(e.g. Gambling (Football pools ))
Ethics
Morals
Law
Overlap Model
Actions are moral, but not ethical or legal.
(e.g. modern-day polygamy among the FLDS )
Ethics
Morals
Law
Overlap Model
Ethics
Morals
Actions are ethical, but not moral or legal.
(e.g. Apartheid laws)
Law
Four Internal Forces
•
•
•
•
Leader’s Example
Strategies
Organizational Culture
Individual Characteristics
How Companies Manage Ethics
Seven Steps: U.S. Sent Comm
• Establish compliance
standards and procedures
– Code of Conduct
• Ethical oversight occurs
at high levels of
management
• Do not delegate authority
to persons who are prone
to engage in criminal
behavior
– Use background checks
• Communicate standards
to all employees
– Ethics Training Programs
• Establish Monitoring and
ethical auditing systems
• Consistently enforce
standards
• Immediately after an
offence take steps to
prevent future offences
Enron
Enron Values
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