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OBE 117. BUSINESS AND SOCIETY. ETHICAL REASONING. CRITICAL QUESTIONS?. What Is Ethical Behavior? How Do We Measure It? How Do We Learn How to Do It?. CATEGORIZATION OF ETHICAL THEORIES. CONSEQUENTIALISM DEONTOLOGICAL HUMAN NATURE. CRITICAL QUESTIONS?. WHAT IS HAPPINESS?

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Obe 117

OBE 117

BUSINESS AND SOCIETY



Critical questions
CRITICAL QUESTIONS?

  • What Is Ethical Behavior?

  • How Do We Measure It?

  • How Do We Learn How to Do It?


Categorization of ethical theories
CATEGORIZATION OF ETHICAL THEORIES

  • CONSEQUENTIALISM

  • DEONTOLOGICAL

  • HUMAN NATURE


Critical questions1
CRITICAL QUESTIONS?

  • WHAT IS HAPPINESS?

  • CAN ATTRIBUTES OF HAPPINESS BE RANKED? IF SO RANK THEM


Consequentialism
CONSEQUENTIALISM

  • Jeremy Bentham, John Stuart Mill (Greatest balance of pleasure and unhappiness

  • ETHICAL EGOISM

    • Maximizes My Good, Harms Me Least

  • UTILITARIANISM

    • Greatest Good To The Greatest Number

      • Act - Each Person Benefit Community By Their Action

      • Rule - Create General Rule


Critical questions2
CRITICAL QUESTIONS?

  • WHAT IS DUTY?

  • ARE PEOPLE INHERENTLY GOOD?

  • DO HUMANS HAVE NATURAL RIGHTS?


Deontological
DEONTOLOGICAL

  • KANTIAN

    • Good Will - Action freely motivated for right reason

    • Duty - Reason Guides Will. Duty is an act done simply for the sake of what is right.

    • Knowledge of Duty - Determined not from local law or custom, but from respect for all rational beings and from universal principles


Kant s categorical imperative
KANT’S CATEGORICAL IMPERATIVE

  • UNIVERSAL PRINCIPLE

    • A person should act that the principle of one’s act could become a universal law of human action in a world in which one would hope to live.

    • A person should treat other people as having intrinsic value, and not merely as a means to achieve one’s end.


Contractarian deontology
CONTRACTARIAN DEONTOLOGY

  • John Locke

    • Each individual has inalienable natural rights. The purpose of society is to protect these rights

  • Rawls (Veil of Ignorance)

    • Social Justice is created when rational people would formulate rights if they did not know whether or not these principles would apply to them.


Critical questions3
CRITICAL QUESTIONS?

  • DO ALL HUMANS HAVE POTENTIAL FOR GREATNESS?

  • WHAT ARE SOME OF THESE POTENTIALITIES?

  • ARE PEOPLE SOCIAL BY NATURE?


Human nature ethics
HUMAN NATURE ETHICS

  • ARISTOTLE

    • All humans share innate capacities and desires. All Humans are social creatures and therefore have the capacity to become excellent members of society. This is done by studying, becoming wise and participating in politics.

    • Negative behavior is a result of not being allowed to reach full potential


Business ethics and economic sense
BUSINESS ETHICS AND ECONOMIC SENSE

  • Adam Smith

    • The Wealth of Nations

      • It is not from the benevolence of the butcher, the brewer,or the baker that we expect out dinner, but from their own interest. We address not heir humanity but their self-love


Adam smith in the theory of moral sentiments
ADAM SMITH INThe Theory of Moral Sentiments

  • There is a need to go beyond profit maximization to: humanity, justice, generosity, and public spirit.


Economic institution s foundations
ECONOMIC INSTITUTION’SFOUNDATIONS

  • Common Behavior Patterns

  • Shared Trusts

  • Mutual Confidence


Other forms of capitalism
OTHER FORMS OF CAPITALISM

  • Japanese Ethos

    • Honor

    • Duty

  • Confucian

    • Hard Work

    • Thrift

    • Family


Public good
Public Good

  • All Benefit

  • Non-Competitive

  • One’s Consumption does not exclude another

  • EXTERNALITIES

  • Public Ownership

  • Public Regulation

  • Public Concern in Private Decisions


Critical questions4
CRITICAL QUESTIONS?

  • WHAT IS TRUTH?

  • WHAT IS A LIE?


Truthfulness emmanuel kant 1771
TRUTHFULNESSEmmanuel Kant 1771

  • TRUTH TELLING LEADS TO

  • DISCOURSE WHICH LEADS TO

  • FELLOWSHIP WHICH LEADS TO

  • FORMATION OF A SOCIETY


Generally to lie is evil and to be a liar is to be a coward
GENERALLY TO LIE IS EVIL AND TO BE A LIAR IS TO BE A COWARD

  • SILENCE

    • Not an option because it is view as unsocial

  • SECRETS

    • Telling secrets is like giving presents and a nature inclination. Strength is in keeping them.

  • TRUTH

    • Important because one of two way to gain knowledge. The other is experience.


  • LIE

    • When giving impression that you are telling the truth

  • FALSE STATEMENTS OK WHEN

    • Other person does not have the right to demand the truth

    • Other person may make wrong use of the truth

    • Other person may harm you

  • FLATTERY

    • Can be act of kindness (weakness) or treachery

  • FAULT FINDING

    • OK for someone in authority when used with love, goodwill, or sweetness

  • SPYING

    • We have no right to spy on others

  • ANY ACT THAT WORKS AGAINST FRANKNESS LOWERS THE DIGNITY OF HUMAN KIND


Critical questions5
CRITICAL QUESTIONS?

  • IS IT APPROPRIATE FOR BUSINESS TO HAVE ITS OWN ETHICAL RULES?


Is business bluffing ethical albert carr 1968
Is Business Bluffing Ethical?Albert Carr (1968)

  • BUSINESS IS A GAME WITH ITS OWN ETHICS

  • FALSEHOOD IS NOT FALSHOOD WHEN TRUTH IS NOT EXPECTED BY THE OTHER SIDE

  • THE GAME PRESSURES PEOPLE TO DECEIVE. DECEPTION MUST BE WITHIN LIMITS OF THE RULES OF THE GAME (LAW)



Critical questions6
CRITICAL QUESTIONS?

  • WHAT ARE THE BASIC “SETTLED” ETHICS IN BUSINESS DEALINGS?

  • WHAT ROLE SHOULD GOVERNMENT (POLITICS PLAY)?


Limits of business ethics joseph betz 1999
LIMITS OF BUSINESS ETHICSJoseph Betz (1999)

  • INFORMAL

    • You may do unto others what experience teaches us they might do to us.

  • FORMAL

    • Law


Business and law
BUSINESS AND LAW

  • SINCE THE ETHICAL BAR IS SO LOW, SOCIETY MUST CONSTANTLY WRITE LAWS REGULATING BUSINESS.


Critical questions7
CRITICAL QUESTIONS?

  • How much should you trust another in business negotiation?

  • Is the market place established as a place to deceive others?


Promoting honesty in negotiations cramton dees
Promoting Honesty in NegotiationsCramton & Dees

  • Foundation Theory

    • Most people place a high value on their own welfare

    • There is weakness in all of us

    • Others will behave ethically only if they expect others to do the same


Negotiation
NEGOTIATION

  • FALSE IMPRESSIONS

  • PRIVILEDGED ACCESS TO INFORMATION

  • USE OF THREATS AND PROMISES

  • UNDISCLOSED SETTLEMENT PREFERENCES


Factors affecting honesty

Asymmetry of Information

Verification is Difficult

Intention to Deceive is difficult to establish

Insufficient resources

Interaction is infrequent

Ex Post redress is costly

Reputation information not available

Unique circumstances

To much to lose to be honest

Factors Affecting Honesty


Limiting deception
LIMITING DECEPTION

  • VERIFY CLAIMS

  • DEVELOP CONTRACTS (Warranties/ Bonds/ \Escrow)

  • PRESERVATION OF REPUTATION

  • LIMIT MORAL HAZARDS (Shirking Responsibilities)


Real world limits
REAL WORLD LIMITS

  • Legal and Regulatory Protection

  • Institutional Verification Available

  • Standard Contracts

  • Third Party Negotiators

  • Credentials Individuals Available


Preparing for negotiations
PREPARING FOR NEGOTIATIONS

  • Determine incentives for deception

  • Determine character of other side

  • Determine your attitudes toward issues and others


Building trust
BUILDING TRUST

  • Face to Face Contact

  • Create opportunities to display trust

  • Demonstrate your trustworthiness

  • Place negotiations in long term context

  • Bring in trusted intermediaries

  • Self Protection


Critical question
CRITICAL QUESTION

  • HOW DO WE DEFINE WHO WE ARE?


Corporate roles personal virtues an aristotelian approach to business ethics solomon
Corporate Roles, Personal Virtues: An Aristotelian Approach to Business EthicsSolomon

  • Trade in home is appropriate

  • Trade for profit is not

  • One has to think of oneself as a member of a larger community

  • Our sense of self as a virtuous person is defined by that larger community


Six dimensions of virtue
Six Dimensions of Virtue to Business Ethics

  • COMMUNITY

    • We are members of a community and our self interest lies in community

    • When we work we make the organization our community.

  • EXCELLENCE

    • Excellence is more than following rules and not doing harm to others. It is constantly raising the bar. It exhibits itself in our thoughts, ideas, feelings, action and how we construct our community.


  • ROLE IDENTITY to Business Ethics

    • Our ethical standard is partially defined by the role we play in society.

  • INTEGRITY

    • Provides an anchor against disintegration. It integrates our roles and responsibilities and the virtues that define them. MORAL COURAGE

  • JUDGEMENT

    • Good judgement is the product of upbringing and education. It requires balancing concerns and principles as well as justice and fairness.


  • TOUGHNESS to Business Ethics

    • It is the willingness to do what is necessary to keep organization viable. This is done knowing it will cause pain and suffering. It is done with compassion.

  • HOLISM

    • The process of separation of work, family and community causes alienation. This separation causes narrowness of focus in business activity, education and organizational.


Moral mazes bureaucracy and managerial work jackall
Moral Mazes: Bureaucracy and Managerial Work to Business EthicsJackall

  • PROTESTANT WORK ETHIC

    • Control of human impulses by work. The greater the work the greater the accumulation of wealth. Shifted to mean rugged individualism to financial success


Bureaucracy
BUREAUCRACY to Business Ethics

  • Started as a small collection of clerks. Grew into major portion of most organizations.

    • Administrative hierarchies

    • Standardized work procedures

    • Regularized time tables

    • Uniform policies

    • Centralized control


Bureaucracy and morality
Bureaucracy and Morality to Business Ethics

  • Pyramid of Politics

    • Power Centralized, allocated, decentralized

    • Never achieve higher status than boss

  • Who Gets Credit

    • Senior Management escapes responsibility by

      • Avoiding decisions

      • Delegate

      • Involve large groups of people


  • PLEASE THE KING to Business Ethics

    • CEO throw back to medieval times

  • ORGANIZATIONS ARE UNSTABLE

    • Mergers, sales, low performance create power changes

  • SUCCESS AND FAILURE

    • Socially defined

    • Luck is necessary but capricious


Tips for future
TIPS FOR FUTURE to Business Ethics

  • APPEARANCE AND DRESS

  • SELF CONTROL

    • Be human but not emotional

  • STYLE

    • Fast, Decisive, Knowledgeable, Reflect Organization’s Standards

  • PATRON POWER

    • Godfathers, Mentors necessary

  • KNOW HOW TO PLAY THE GAME


Downside to system

DOWNSIDE TO SYSTEM to Business Ethics

ORGANIZATIONS CAN REMOVE THE PERSON AND REPLACE THEM WITH A REPRESENTATION OF A PERSON (EMPTY SUIT)


Critical question1
CRITICAL QUESTION to Business Ethics

  • WHERE DOES OWNERSHIP OF PROPERTY START?


The justification of private property john locke
The Justification of Private Property to Business EthicsJohn Locke

  • Base World View

    • A Cartesian Thinker (Search for Rationality)

    • Man is Superior and Earth is There to Support Man

    • Man has an Obligation to Subdue the Earth


Property rights
PROPERTY RIGHTS to Business Ethics

  • Man has property in his person

  • Man uses his body to remove from the state of nature

  • Once his body is jointed with land it becomes his

  • Value of land is in its improvement


Robbery
ROBBERY to Business Ethics

  • If taken with permission of all commoners not robbery

  • Take only what is needed

  • Take advantage before it spoils

  • Nothing was made by God for man to spoil or destroy


Commerce
COMMERCE to Business Ethics

  • Trade before goods spoil

  • Trade for something of permanence (gold, silver, diamonds)

  • Currency provides permanence and ability to accumulate wealth


Alenated labour karl marx
ALENATED LABOUR to Business EthicsKarl Marx

  • Written in 1844 when he was 26

  • BASIC ECONOMIC FACT: The worker becomes poorer the more wealth he produces because the value of his production become less.

  • VIEW OF HUMAN KIND: Humans have a life activity which is higher than just maintenance of physical existence


Worker and product
WORKER AND PRODUCT to Business Ethics

  • Worker no longer connect with work on intellectual or feeling level

  • The more produced the less connection

  • Systems cause loss of connection to self

  • See self in terms of what produced

  • Functions only to drink, eat and procreate


Alienation
ALIENATION to Business Ethics

  • Moved from Activity to Suffering, Strength to Powerlessness and Creation to Emasculation

  • Contrary to man who combines will and consciousness

  • We see ourselves as objects we possess. We identify only in the sense (seeing, touching, hearing, smelling, tasting) of what we own

  • Our disconnection with self causes disconnection with others

  • Private property takes way means, end and quality of life


Critical questions8

CRITICAL QUESTIONS to Business Ethics

Is there a price to pay for the division of labor?

Does the invisible hand really direct behavior in the market place?


Benefits of the profit motive adam smith 1776
Benefits of the Profit Motive to Business EthicsAdam Smith 1776

  • Human Nature

    • Interested in Exchange

    • Dependent on Others

    • Best Interests served when help is given because it benefits giver

  • Division of Labor Central to Efficient Market

    • Dexterity

    • Time Saving

    • Proper Use of Technology


  • Microeconomic Decision to Business Ethics

    • Based individual gain through specialization

  • Hidden Hand of Market

    • Causes different people to be employed in different tasks to yield greatest possible gain for self and society


Critical questions9

CRITICAL QUESTIONS to Business Ethics

Do the Wealthy have an obligation to the poor?

If so how much should be given?

How Should it be given?


Wealth andrew carnegie
WEALTH to Business EthicsAndrew Carnegie

  • In Past Rich and Poor Lived Close Together

  • Social Darwinism

    • Competition has changed this creating winners and losers.

    • Creates unknown workers and employers

    • Society cannot support incompetent and lazy

    • Highest result achieved through individualism


  • Highest result of human experience: Individualism, Law of Accumulated Wealth, and Law of Competition. These are natural laws.

  • Administration of Wealth

    • Setting aside enough for comfort is not wealth

    • One half of estate to dependents. One half given to away during life. Oversight of distribution is responsible of wealthy.

    • Criteria of Distribution

      • Give only to those who will help themselves

      • Rich have an obligation to help society


Social responsibility of business is to increase its profits milton friedman
Social Responsibility of Business Is To Increase Its Profits Accumulated Wealth, and Law of Competition. These are natural laws.Milton Friedman

  • For Market to Be Free It Must Be Open (Competition without deception or fraud)

  • Corporation is an artificial person therefore cannot have responsibility

  • CEO acts as an agent not a principal


The primary function of the Executive is creation of wealth for stockholders, employees, and customers

  • CEO is responsible to owners

  • CEO who spends money on socially responsible activities

    • Spends stockholders dividend

    • Spends employees wages

    • Spends customers money


  • If A CEO Acts on Social Objectives for stockholders, employees, and customers

    • They need to be elected

    • They need to become expert in public policy

  • A market when everyone acts in own self interests keep other people’s action in check

  • The market forces conformity to the will of society


Test one

TEST ONE for stockholders, employees, and customers

Page 1 Through 159


Critical question2

CRITICAL QUESTION? for stockholders, employees, and customers

Will Society Pay a Premium to Socially Responsible Firms?

If So How Much?


Can socially responsible firms survive in a competitive environment robert h frank
Can Socially Responsible Firms Survive in a Competitive Environment?Robert H. Frank

  • Response to Milton Friedman

  • Evolutionary Biology

    • Higher payoff at certain times for altruism

    • Commitment when may not be viewed as serving self interest

    • Will act altruistically if perceive other person will

    • Over time altruism pays


  • Reasons Socially Responsible Firms Prosper Environment?

    • Able to solve shirking problem with employees because of trust

    • Able to solve customer problems

    • Avoid Subcontractor Holdups, Assure Quality, and Maintain Confidentiality

    • Attract Customers

    • Attract Employees


Critical question3

CRITICAL QUESTION Environment?

Why Are American Managers Unable or Unwilling to Discuss Ethical Behavior in the Workplace?


Moral muteness of managers fredrick b bird and james a waters
Moral Muteness of Managers Environment?Fredrick B. Bird and James A. Waters

  • “There is a disinclination of American business people to admit they acted altruistically even if they did” Alex de Tocqueville (1800)

  • Norms:

    • Standards of behavior that are sufficiently compelling and authoritative that people feel they must either comply with them, make a show of complying with them, or offer good reason why not


Moral norms
MORAL NORMS Environment?

  • Moral norms are established through “moral expression.” This creates reality in the organization.

  • Quadrants of moral action and speech

    • Talk about moral behave morally

    • Talk about morals but behave immorally (moral backsliding, moral fatigue, hypocrisy)

    • Don’t talk about moral behavior and don’t behave morally

    • Act morally but do not talk


Causes for moral muteness
CAUSES FOR MORAL MUTENESS Environment?

  • THREAT TO ORGANIZATIONAL HARMONY

    • Whistle blowing, lack of candid performance appraisals, creates finger pointing

  • THREAT TO EFFICIENCY

    • Takes away from problem solving discussion

    • Moral analysis doesn’t solve problems

    • Removes flexible, informal and amendable relationships (rigidity, rules, and regulations)

  • THREAT TO IMAGE AND POWER

    • Viewed as idealistic and utopian. May reveal “ethical illiteracy”


Consequences
CONSEQUENCES Environment?

  • Moral Amnesia -

    • Creates the caricature that management is moral

  • Narrowed Conception of Morality

    • Maintain neutrality by “stonewalling” moral discussion

  • Neglect of Abuses

    • Organization will not recognize and deal with problems

  • Decreased Authority of Moral Standards

    • Lack of dialogue creates lack of support of moral behavior


How to fix the problem
HOW TO FIX THE PROBLEM Environment?

  • Create environment that legitimizes dissent

    • Remove blame, criticism and punishment for expression of views.

  • Teach people how to dissent

  • Teach people to incorporate moral discussion into regular expressions and arguments


Critical question4

CRITICAL QUESTION Environment?

How should the bounty of a society be distributed?


Justice
JUSTICE Environment?

  • DISTRIBUTIVE

    • Each according to their need

    • Each person an equal share

    • Each person according to their right

    • Each person according to their effort

    • Each person according to their contribution to society


  • COMPENSATORY JUSTICE Environment?

    • Compensate people for what they have lost when wronged by others

  • RETRIBUTIVE JUSTICE

    • Imposition of punishment and penalties on wrong doers

  • MATERIAL PRINCIPLE OF JUSTICE

    • Determines what it means to give a person their due

  • EGALITARIAN VIEW

    • Each person has an equal claim on society’s goods and services

  • LIBERTARIAN VIEW

    • Each person free to act according to their own purpose free from coercion of government


Rights
RIGHTS Environment?

  • DIVINE RIGHT OF KINGS

    • Authority given by God

  • NATURAL RIGHTS

    • Highest form of rights given by authority higher than society

  • LEGAL RIGHTS

    • Provided by constitution, legislative enactments, case law or executive order


  • ENTITLEMENT Environment?

    • Provided by moral norms or legal system

  • NEGATIVE RIGHT

    • Protects an action from being interfered with by others

  • POSITIVE RIGHT

    • Provides individual with what they need to pursue freely their interests

  • MORAL RIGHT

    • Moral obligation one has in the treatment of others


Distributive justice john rawls
DISTRIBUTIVE JUSTICE Environment?John Rawls

  • What rules constitute a just society?

    • Liberties are equal to all citizens

    • Rights not subject to political bargaining

    • Rights not subject to calculation of other social interests (Anti-Utilitarian)


How do we construct at just society
HOW DO WE CONSTRUCT AT JUST SOCIETY? Environment?

  • Created out of agreement between free and independent persons.

  • Use Veil of Ignorance: A third part brings the people together and states that they are to design a system for the distribution of compensation and sacrifice. They do not know what their starting point will be in that society


What will this society look like
WHAT WILL THIS SOCIETY LOOK LIKE? Environment?

  • Each person will have right to equal access to offices and opportunities

  • If there is inequality it will be to the benefit of ALL .

  • Political Institutions: Based on legality, liberty of conscious, freedom of though. Equal education, Free choice of professions,

  • Economic Institutions: Equal opportunity to engage in commercial activities, fortunate promote well-being of the less fortunate, gifted pay for cost of training and cultivation of their endowments in a way to improve the less fortunate


Government s role
GOVERNMENT’S ROLE Environment?

  • Keep markets competitive

  • Ensure full employment of resources, property, and wealth

  • Distribute wealth broadly to maintain social minimums

  • Equal opportunity underwritten by education


The entitlement theory robert nozick
THE ENTITLEMENT THEORY Environment?Robert Nozick

  • The minimal state is the most extensive state that can be justified

  • Just Distribution

    • Arises out of legitimate means

    • If acquired through transfer from another can be held

    • No one can hold property except by these means


Redistribution of wealth
REDISTRIBUTION OF WEALTH Environment?

  • HISTORIC: How did the distribution take place (Earned, borrowed or stolen)

  • TIME SLICE: Current welfare economics. Justice is determine by who has what and who needs what

  • LIBERTY THROUGH VOLUNTARY ACTION WILL OVERTURN ANY IMPOSED SYSTEM OF DISTRIBUTION


Complex equality michael walzer
COMPLEX EQUALITY Environment?Michael Walzer

  • How do adjust for difference in

    • Being, Doing, Having, Consuming, Identity, Status.

  • There is no single best criteria for distribution. Not Markets, Not Government


Dominance systems
DOMINANCE SYSTEMS Environment?

  • ARISTOCRACY

    • Rule by breeding and intelligence

  • DIVINE SUPREMANCY

    • Know the word of God

  • MERITOCRACY

    • Rule because of talent

  • FREE EXCHANGE

    • Movable Wealth


Dominance is transitory
DOMINANCE Environment?IS TRANSITORY

  • Pressure to redistribute wealth when to centralized

  • Pressure to change based on new ideas

  • “Iron Law of Oligarchy- Robert Michels 1915

    • A society cannot exist without a dominant class. The overthrow of an elite will lead to the formation of another


Redistribution model
REDISTRIBUTION MODEL Environment?

  • Understand how goods are valued by society

  • Understand how the good relate to each other

  • Free Exchange: Money controlled “ultimate illegal immigrant.”

  • Desert: Linkage between deserving and the market

  • Need: The specific sphere (context) establish distribution appropriate to context. Piety versus financial rewards.


Stakeholder theory of the modern corporation r edward freeman
Stakeholder Theory of the Modern Corporation Environment?R. Edward Freeman

  • Management has a fiduciary responsibility to stakeholders

  • Corporations a tool for immortality

  • Corporations status changed

    • “Privity of Contracts

    • Employment Law

    • Public Policy and Law


Corporate behavior forcing change
CORPORATE BEHAVIOR FORCING CHANGE Environment?

  • EXTERNALITIES

    • “Tragedy of the Commons” “Freerider”

  • MORAL HAZARD

    • Passing on the cost of pollution

  • MONOLOPLY

    • Strive to avoid competition


Reasonable pluralism
REASONABLE PLURALISM Environment?

  • MEASURE AFFECT ON STAKEHOLDERS BY

    • Doctrine of Fair Contracts

    • Feminist Standpoint Theory

    • Ecological Principles

  • Ask Questions

    • Corporation ought to be governed by…

    • Managers ought to act.

  • WHERE DO WE FIND BACKGROUND DISCIPLINES: Business, Social Science, Religion


Doctrine of fair contacts
DOCTRINE OF FAIR CONTACTS Environment?

  • The Principle of Entry and Exit

    • Clearly defined entry, exit and renegotiations conditions

  • The Principle of Governance

    • Rules of the game set by unanimous consent

  • The Principle of Externalities

    • If effected person want can be renegotiated

  • The Principle of Contracting Costs

    • Shared cost of contracting

  • The Agency Principle

    • Must act in the interest of all stakeholders

  • Principle of Limited Immortality

    • Continued existence of Corporation is in all stakeholders interests


Critical question5

CRITICAL QUESTION Environment?

WHO IS A STAKEHOLDER?

IS THERE RANKING OF STAKEHOLDER INTERESTS?


Business ethics and stakeholder analysis kenneth goodpaster
Business Ethics and Stakeholder Analysis Environment?Kenneth Goodpaster

  • Stakeholder Paradox

    • Fiduciary duty to stockholders

    • Make stakeholders quasi-stockholders in their own right

  • Stakeholder Analysis

    • Fact Gathering

    • Analysis (Strategic Stakeholders)

    • Synthesis (Multi-fiduciary

    • Choice(Why Chosen)

    • Action


Challenges of stakeholder perspective
Challenges of Stakeholder Perspective Environment?

  • Ruder: Decide based on the decent thing to do and what ought to be done.

  • Public obligations takes away from private nature of the corporation

  • Agent-Principal relationship


Critical question6

CRITICAL QUESTION Environment?

Can Morality Be Legislated?


The “New” U.S. Sentencing Commission Guidelines: A Wake-up Call for Corporate AmericaDalton, Metzer, and Hill

  • Formula used to determine justice. A multiplier used to establish penalty

    • Nature of the Crime

      • Amount of Loss

      • Amount of Planning

    • Culpability Score

      • Size of Organization

      • Level in Organization

        • (Officer/Janitor)

      • Past Crimes

      • Past History


Mitigation
MITIGATION Wake-up Call for Corporate America

  • Policy in Place

  • Assigned Responsibility for Enforcement

  • Control of Deviants

  • Communicated to Organization

  • Control (Audits/Monitoring)

  • Appropriate Discipline

  • Respond Appropriately if Violation Occurs


Wake-up Call for Corporate Americaa society without any objective legal scale is a terrible on indeed. But a society with no other scale but the legal one is not quite worthy of man either.. Life organized legalistically has shown its inability to defend itself against the corrosion of evil.”Alexander Solzhenitsyn


The parable of the sadhu bowen h mccoy
The Parable of the Sadhu Wake-up Call for Corporate AmericaBowen H. McCoy

  • Once in a lifetime trip to the Himalayas. Travel a well used trail

  • Found a half naked holy man in the snow

  • Do you take him back to a village? Do you care for him? Both option would cause you to loose the opportunity to make your once in a life time climb.


Questions raised
QUESTIONS RAISED? Wake-up Call for Corporate America

  • Is no single person responsible when there is a group?

  • Do we make decisions based on ethnic considerations?

  • Can a superordinate goal allow for moral slippage?

  • Is their an institutional or group ethic strong than an individual ethic?

  • How much effort is enough to satisfy your moral obligation?


Author s observations
AUTHOR’S OBSERVATIONS Wake-up Call for Corporate America

  • Organizations without a history of mutually accepted shared values tend to come apart during stress.

  • People in touch with core values can deal with change, ambiguity, stress, and tough times.

  • People tend avoid the ambiguous yet that is what tends to be the most rewarding

  • Individuals need organizational support to act morally.


Critical question7

CRITICAL QUESTION? Wake-up Call for Corporate America

Are you a zealot or heroin/hero when you blow the whistle on your company?


Whistle blowing and professional responsibility sissela bok
Whistle Blowing and Professional Responsibility Wake-up Call for Corporate AmericaSissela Bok

  • High stakes for Individual

    • Reassignment, legal costs, downgrades at work, work with responsibility, constructive harassment, starting over

    • Organization

      • Mutual Suspicion, hiding behind executive privilege or national security


  • QUESTIONS TO BE ANSWERED Wake-up Call for Corporate America

    • Level of harm to public (imminent threat tied to accused)?

    • Level of loyalty to firm and other employees?

    • How will action be perceived (disgruntled worker, financial gain - book deal)?

    • How accurate is the information?

    • Am I acting out of religious or dogmatic positions?

    • Am I articulate enough to create a following?

    • Are the issues legitimately private?


Critical question8

CRITICAL QUESTION? Wake-up Call for Corporate America

Do you own your job?


Employment at will and due process werhane and radin
Employment at Will and Due Process Wake-up Call for Corporate AmericaWerhane and Radin

  • “Employment at Will

    • an employee may quit their job for any reason or no reason and the employer may terminate an employee for any reason or no reason that does not violate the law.


Work and workers
WORK AND WORKERS Wake-up Call for Corporate America

  • Union Workers

    • Pay for protections through wage concessions

  • Public Workers

    • Protected by law from political terminations

  • Private Employees/Due Process

    • A procedure including a hearing of facts, trial, grievance procedure, or appeal of a work related decision.

    • When cases involved just cause for termination or violation of public interests employees won 67% of cases


Arguments

Support Wake-up Call for Corporate America

Property rights of employer to make a profit

Both parties free to quit

Taking a job implies termination at will

Further government involvement will harm business

Against

Line between public and private worker is blurring

Public has a right to have stable employment

Due process is a moral imperative if organizations are allowed into a society

ARGUMENTS


In defense of the contract at will doctrine richard a epstein
In Defense of the Contract at Will Doctrine Wake-up Call for Corporate AmericaRichard A. Epstein

  • FAIRNESS

    • Freedom to Contract is an aspect of personal liberty

    • It favors utility in that it allows for adjustments without litigation

  • DISTRIBUTION

    • Allows for the free exchange of labor. Only people strongly in favor are lawyers and interests groups who administer the new laws


Test two

TEST TWO Wake-up Call for Corporate America

PAGES 159 - 323


Employment security rosabeth moss kanter
Employment Security Wake-up Call for Corporate AmericaRosabeth Moss Kanter

  • Clash between job-tenure ideal in the past and job-insecurity realities of 2000.

  • How realistic is Kanter’s New Policy

    • Page 323-324.


Management women and the new facts of life felice n schwartz
Management Women and the New Facts of Life Wake-up Call for Corporate AmericaFelice N. Schwartz

  • Women cost more to hire and retain than men (250% more likely to quit jobs)

  • Women plateau their careers

  • Women tend to work episodically

  • Women are socialized to have different perceptions of what is important


  • Employers need to find ways of lower cost employing women Wake-up Call for Corporate America

  • Gender differences to face: Maternity and Perception of roles and Expectation of self and society

    • Women child bearers and raisers

    • Male breadwinners

    • Women perceived as push and abrasive when competing with men


  • Modern reality requires new strategies Wake-up Call for Corporate America

    • Women who want careers should be identified and welcomed

    • Women wanting families should be provided support and flexibility

    • Accept that women will not know when the will return to work

    • Women accepting flexibility and part time will have slower career advancement

    • Corporations need to keep studying issues


White Privilege and Male Privilege: A Personal Account of Coming to See Correspondences Through Work in Women’s StudiesPeggy McIntosh

  • PRIVILEGE REFERS TO AN UNEARNED ENTITLEMENT OF CONFERRED DOMINANCE. THIS PRIVILEGE IS POSSIBLY UNKNOW TO THE INDIVIDUAL

  • REQUIRES A DISTRIBUTION OF CULTURAL TURF TO SELECT GROUPS

  • INDIVIDUALS HAVE PRIVELEDGES WHICH FALL TO THEM SIMPLY BY VIRTUE OF BEING MEN, WHITE OR HETROSEXUAL

    • The effect is oppressive acts without intent

    • Privilege is not fault of those to who it accrues but does provide a knapsack of use goods to travel around a society



Sexual harassment susan m dodds
Sexual Harassment COLLEGE EDUCATION)Susan M. Dodds

  • SEXUAL HARASSMENT

  • SEXUAL DISCRIMINATION

  • MAY BENEFIT HARASSED

  • P0WER IS THE ISSUE

  • ATTITUDE, INTENTIONS AND EXPERIENCE DO NOT EXPLAIN THE ACTIONS

  • IMPACT VERSUS INTENT

  • REASONABLE WOMEN STANDARD


Relativism cultural and moral norman bowie
Relativism, Cultural and Moral COLLEGE EDUCATION)Norman Bowie

  • Cultural Relativism

    • Different cultures have ideas about ethical behavior

  • Moral Relativism

    • What is “really right or wrong” is completely determined by the culture in which a person lives


Criticism of moral relativism
CRITICISM OF MORAL RELATIVISM COLLEGE EDUCATION)

  • A culture thinking something is moral does not make it moral (slavery)

  • It is not consistent with moral language which tends to be absolute

  • All cultures tend to believe in universal principles

  • There are not separate cultures (Bosnia, Somalia, Cambodia)

  • Cultural traditions are bounded by physical laws (outlawing sex)


United nations declaration of human rights
UNITED NATIONS DECLARATION OF HUMAN RIGHTS COLLEGE EDUCATION)

  • 30 Articles attempting to establish a common standard for a global society

  • Review Articles and Prioritize


International business ethics and incipient capitalism a double standard richard de george
International Business Ethics and Incipient Capitalism: A Double StandardRichard De George

  • If ethical mores differ from society to society what rules do you follow?

    • Business ethics depend on the structure of a society

    • Business ethics is socioeconomic

    • Business ethics must take into account existing infrastructure


Business in russia
BUSINESS IN RUSSIA Double Standard

  • Translating from communism/socialism to capitalism

    • Legal system in flux

    • Basic norms should be honored (murder, extortion)

    • No need to reinvent just modify ethical norms

    • Corruption should be stopped now

    • Transition will be difficult

    • Some unethical acts may need to continue (bribery)


Values in tension ethics away from home thomas donaldson
Values in Tension: Ethics Away From Home Double StandardThomas Donaldson

  • CULTURAL RELATIVIST

    • Country has the right to establish it own health and safety regulations

  • ETHICAL IMPERIALISM

    • Do everything exactly the same as in their home country

    • Absolutists


Problems with imperialism
PROBLEMS WITH IMPERIALISM Double Standard

  • Different cultural traditions must be respected

  • There is more than one set of concepts to define moral truth

  • Context helps shape ethical practices


Guiding principles
GUIDING PRINCIPLES Double Standard

  • Respect for Core Human Values

    • Good Health

    • Right to Economic Advancement

    • Must not treat people as tools

  • Respect for Local Traditions

  • Context Matters


Stage of economic and social development
STAGE OF ECONOMIC AND SOCIAL DEVELOPMENT Double Standard

  • CONFLICT OF RELATIVE DEVELOPMENT

  • CONFLICT OF CULTURAL TRADITIONS


Corporate guidelines
CORPORATE GUIDELINES Double Standard

  • Treat Corporate Values and Formal Standards of Conduct as Absolutes

  • Control Relationships with Suppliers and Customers

  • Allow Foreign Business Units to Formulate Ethical Standards

  • Support Efforts to Decrease Institutional Corruption

  • Exercise Moral Imagination


Persuasive advertising autonomy and the creation of desire roger crisp
Persuasive Advertising, Autonomy, and the Creation of Desire Double StandardRoger Crisp

  • ADVERTISING PLAYS ON THE UNCONSCIOUS DESIRES FOR:

    • Sex

    • Money

    • Adventure

    • Power


Persuasive advertising
PERSUASIVE ADVERTISING Double Standard

  • All forms are wrong because

    • Includes subliminal advertising, puffery and repetition

    • Removes autonomous reaction to decision making

    • Based on linkage to things (sex, drugs and rock and roll) outside of the object


Arrington in support of advertising
ARRINGTON IN SUPPORT OF ADVERTISING Double Standard

  • AUTONOMOUS DESIRE (A search for a new look for the sake of a new look)

    • Crisp- no so because of linkage to secondary needs (sex, drugs and rock and roll)

  • RATIONAL DESIRE AND CHOICE (People do not need perfect information only enough to make a decision)

    • Crisp - The information provided is there to persuade not educate

  • FREE CHOICE (The act of buying can be justified in the mind of the purchaser)

    • Crisp - Desires may be so covert that individual is unaware of manipulation

  • CONTROL AND MANIPULATION (Advertisements do intend to control all conditions to meet a need)

    • Crisp - Causes people to be brain washed into accepting what they would reject if aware of reasons for manipulation.


Conclusions
CONCLUSIONS Double Standard

  • PERSUASIVE ADVERTISING OVERRIDES AUTONOMY AND IS THEREFOR IMMORAL

  • IMPOSES A DISTORTED SYSTEM OF VALUES ON CONSUMERS

  • MAY PLAY TO STEREOTYPES OR DISCRIMINATION


Ethical myopia the case of framing by framing alan e signer
Ethical Myopia: The Case of “Framing’ by Framing Double StandardAlan E. Signer

  • Mental Accounting

    • How a person goes about accounting for money

  • Framing

    • How the deal is framed rather than the objective value

  • Transactional Utility Theory (TUT)

    • Segregated Gains (Two $50.00 winning tickets rather an One $100.00 ticket

    • Perceived Price -Emotional Value ( Inaccurate pricing, Inaccurate costing, Minimum Pricing, Add on)

  • Market Clearing

    • Market works when Supply and Demand are balanced

    • Reframing to make people happier


Exploiting cognitive habits
EXPLOITING COGNITIVE HABITS Double Standard

  • Focus on peoples belief (how they see the world. This can be distorted by

    • Lying about product

    • Nondisclosure (Herbal Medicine)

    • Labeling (price per bottle or price per wash)


Recommendations
RECOMMENDATIONS Double Standard

  • Legislate protection against “deceptive practices”

  • Teach social consequences in marketing classes

  • Consumer education

  • Researcher indicate areas that are appropriate and those to avoid


Marketing to inner city blacks powermaster and moral responsibility george c brenkert
Marketing to Inner-City Blacks: Powermaster and Moral ResponsibilityGeorge C. Brenkert

  • Heilman Brewery facing bankruptcy

  • Decided to sell to inner city blacks using higher alcoholic content than other malts

  • Appealed to Power and Boldness in customers

  • Ads impacted viewers in a way that made them “exceptionally likely to be influenced by the advertising” Social vulnerability


Conclusions1
CONCLUSIONS Responsibility

  • Marketers must look at the context of their campaigns

  • Marketers who target a specific group must consider harm done to that group

  • Marketers must accept collective responsibility for their products in the market place



The leader s new work building learning organizations peter senge
The Leader’s New Work: Building Learning Organizations ResponsibilityPeter Senge

  • Current Management System

    • Let the leadership do the thinking

    • Leadership by control

    • Leadership by force of rewards or will

  • What is needed is a System which:

    • Depends on superior learning

    • Can think at all levels not just the highest


Learning categories
LEARNING CATEGORIES Responsibility

  • ADAPTIVE

    • Coping by responding to the environment

  • GENERATIVE

    • Expanding our capability, it is about creating not just coping.


Generative learning
GENERATIVE LEARNING Responsibility

  • Different ways of looking at known problems

  • Grasping systemic source of problems not just symptoms

  • Leaders responsible for everyone’s learning

  • Leader creates tension between where you are and where you need to be.


New roles for leaders
NEW ROLES FOR LEADERS Responsibility

  • DESIGNER

    • Clarify visions, values and purpose

    • design policies, strategies and structures

    • Create learning processes

  • TEACHER

    • Help people gain insight into current reality

  • STEWARD

    • Serve first

      • Create opportunities for people to contribute to organizational purpose


New skills
NEW SKILLS Responsibility

  • BUILDING SHARED VISIONS

  • SURFACING AND TESTING MENTAL MODELS

    • Leaps of abstraction

    • balancing inquiry and advocacy

    • Distinguishing theory from application

    • Recognizing defensive routines

  • SYSTEMS THINKING

    • Seeing Relationships, moving beyond blame, distinguishing types of complexity, focus on right areas, and avoiding symptomatic solutions


The many faces of the corporate code lisa h newton
The Many Faces of the Corporate Code ResponsibilityLisa H. Newton

  • A code must meet three specifications

    • Creation through participation

    • Must be consistent with general ethical principles and dictates of conscience (respect for individual, commitment to justice, sensitive to rights of all affected) validity

    • Must reflect the actions of senior managers and leaders. authentic


Codes fail when
CODES FAIL WHEN Responsibility

  • They are created in a vacuum

  • Do not seem valid to those asked follow them

  • Do not seem authentic


Managing for organizational integrity lynn sharp paine
Managing for Organizational Integrity ResponsibilityLynn Sharp Paine

  • CLEAR AND PRESENT NEED FOR CORPORATE CODE OF ETHICS

    • Business is perceived as incapable of ethical conduct

    • Market requires efficiency not ethics

    • Board of Directors and top management responsible for balancing conflicting demands


Why codes are viewed as viable
WHY CODES ARE VIEWED AS VIABLE Responsibility

  • Academic skepticism

  • View as created by a power elite

  • Subject to bias of senior officers

  • Rules to not apply to those at the top


Creation of codes that work
CREATION OF CODES THAT WORK Responsibility

  • PRINCIPLE OF PARTICIPATION

    • Developed through maximum involvement

  • PRINCIPLE OF VALIDITY

    • Must be consistent with accepted dictates of conscience

  • PRINCIPLE OF AUTHENTICITY

    • Code must be followed by senior management


Managing for organizational integrity lynn sharp paine1
MANAGING FOR ORGANIZATIONAL INTEGRITY ResponsibilityLynn Sharp Paine

  • COMPLIANCE BASED CODES OF ETHICS

    • Use legal compliance as the standard. This mark is to low

    • Compliance overemphasizes the threat of detection and punishment but does not foster moral discipline


Hallmarks of an effective integrity strategy
Hallmarks of an Effective Integrity Strategy Responsibility

  • Guiding values make sense

  • Senior leaders are committed, credible and willing to take action

  • Values are integrated into culture

  • Company systems and structures reinforce values

  • Managers have the skills and ability to make ethical daily decisions

  • Note Page 538 for difference in compliance and integrity


Holes in the cornucopia ernest partridge
Holes in the Cornucopia ResponsibilityErnest Partridge

  • SIMON IS WRONG

    • Natural Resources Are Not Infinite

      • Simon confuses math concepts of infinite with the real world

    • You Cannot Use Human History to Predict Future Performance

    • Nature is Complex Not Mechanistic Inert Stuff

    • He Does Not Understand Thermodynamics

      • You Cannot Mine Waste Dumps for Future Resource

    • Nature Cannot Be Successfully Managed

    • He Used Bad Scholarship

      • He uses an American Economic Model to Predict

      • He dismisses those who do not agree


Scarcity or abundance julian l simon
SCARCITY OR ABUNDANCE? ResponsibilityJulian L. Simon

  • All the gloom and doom predictions serve as a scare tactic are not based on long term trends.

    • People around the world are living longer

    • Agricultural labor is declining

    • Raw materials are cheaper

    • Food is more available

    • Pollution is declining


Environmental myths
ENVIRONMENTAL MYTHS Responsibility

  • There is no populations crisis

  • Species extinction rate is low

  • History shows the world is getting better

  • Environment is improving not worsening


Integrating the environment into business planning thomas hellman
Integrating the Environment into Business Planning ResponsibilityThomas Hellman

  • Some companies are moving from end of the pipeline technology to a waste minimization policy (Bristol Meyers)

  • These companies look at product life cycles to eliminate needless packaging and environmentally unfriendly manufacturing systems


Cost benefit analysis an ethical critique steven kelman
Cost Benefit Analysis: An Ethical Critique ResponsibilitySteven Kelman

  • COST BENEFIT IS BASED ON THREE CONCEPTS

    • No act should be undertaken where cost exceeds benefits.

    • Cost and benefits should be expressed on the same scale.

    • Cost benefit analysis is important and worth the expense of gathering the data.


Critique of cost benefit analysis
CRITIQUE OF COST BENEFIT ANALYSIS Responsibility

  • In cases of safety, environment and health benefits outweigh costs

  • There are good reasons not place a dollar value on everything

    • Measure some things is not possible (Clean Air)

    • Method only measures cost paying for benefit not how much is paid to give up benefit

    • Uses a private not public good standard

    • Place a dollar on some things cheapens that thing (love, health, sex)

  • It is not justifiable to spend scare resources on collecting information related to the environment, health, safety and welfare


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