mgt of ethics 6540 moral problems in business management
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MGT. OF ETHICS 6540 Moral Problems in Business Management. What does “right” really mean?. How do you know when something is truly “right” or truly “wrong”?. Why do people’s views on what is “right” and “wrong” differ?.

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slide2

What does “right” really mean?

  • How do you know when something is truly “right” or truly “wrong”?
  • Why do people’s views on what is “right” and “wrong” differ?
slide3

Why would a local construction worker in Moab feel differently about allocation of additional land for development and expansion than a young environmentalist who enjoys hiking in the mountains?

  • How do you attempt to convince people who disagree with you about what is “right”?
  • What arguments should that unemployed construction worker make if he/she were at a meeting with the young environmentalist? What arguments should the environmentalist make?
moral standards
Moral Standards
  • Do moral standards in business differ in some ways from those of our personal life?
  • Business managers do not know how to apply the beliefs and standards they hold to the ethical problems they encounter.
  • The goal: Bring managers to think in a structured, orderly way about their obligations to other people.
slide5
How?
  • The course should be:
  • Short
  • Direct
  • Focused
  • Lively and move along quickly
  • Convey a method of analysis - not a standard of behavior
slide6

Direct:

  • Recognition of ethical problems
  • Understanding of ethical analysis
  • Reliance upon personal values
  • Focused:
  • Ethical problems in management are complex
  • Ethical problems in management are pervasive
  • Ethical problems in management are personal
specific incidents that demand our attention to ethics of management
Specific Incidents That Demand Our Attention to Ethics of Management
  • H.B. Fuller Company
  • Beech-Nut Nutrition Company
  • Dow Corning
  • Sears Roebuck and Company
  • Tobacco Industry
  • The Enron Case
  • Firestone Tire Failure on Ford SUVs. 60 minutes earlier film about failures in Venezuela
general issues also shape the business ethics relationship
General issues also shape the business ethics relationship:
  • Sexual harassment in the workplace
  • Toxic waste disposal crisis
  • Use of lie detectors
  • Minority rights
  • AIDS in the workplace
  • Smoking in the workplace
  • Drug testing
  • Insider trading
  • Whistle blowing
  • Product liability
slide9

1. What groups will benefit?

2. What groups will be harmed?

3. Whose rights will be exercised?

4. Whose rights will be ignored?

5. Express the moral problem so that everyone will believe that his or her moral concerns have been recognized and included.

6. What are the economic benefits?

7. What are the legal requirements?

8. What are the ethical duties?

slide11

Complex Nature of Moral Problems in Business

Benefits Some

Harms to Others

Rights Exercised

Rights Denied

Moral Problems in a Business Firm

slide12

Individual Determinants of Moral Standards

Religious/Cultural traditions

}

Personal Goals Personal Norms Personal beliefs Personal Values

Subjective standards of moral behavior

Economic/social situations

slide13

Analytical Process for the Resolution of Moral Problems

Understand all moral standards

{

Determine the economic outcomes

}

}

Define complete moral problems

Consider the legal requirements

Propose convincing moral solution

Recognize all moral impacts:

Benefits to some Harms to others Rights exercised Rights denied

Evaluate the ethical duties

slide16

Analytical Process for the Resolution of Moral Problems

Understand all moral standards

{

Determine the economic outcomes

}

}

Define complete moral problems

Consider the legal requirements

Propose convincing moral solution

Recognize all moral impacts:

Benefits to some Harms to others Rights exercised Rights denied

Evaluate the ethical duties

economic theory
Economic Theory
  • Managers should optimize profits and
  • Ensure that those markets are competitive
slide20

Pareto Optimality

  • Increase in the well-being of some and decrease in the well-being of others. Any lasting harms should be remedied by political, not financial, procedures!
  • Is it possible to rely totally on the economic concept of Pareto Optimality in making decisions?
slide21

“Few trends could so thoroughly undermine the very foundations of our free society as the acceptance by corporate officials of a social responsibility other than make as much money for their stockholders as possible.”

-Milton Friedman

slide22

Personal Demand Curve

Price

Individual Demand

Units

slide23

Market Demand and Supply Curve

Market Supply

Price

Market Demand

Units

slide24

Marginal Cost Curve

Marginal Costs

Dollars

Marginal Revenues

Units

slide25

The executives who happened to hold duplicate positions following a merger and consequently were to be victims of “downsizing”.

  • The wholesalers who helped to successfully establish a new product but now represent a much more costly means of reaching the market.
  • The dam, which is to be built on private land, but which will block a river used by local residents and summer vacationers for years.
slide26
Since no one is perfect then legal requirements (decisions by full society) and observing ethical duties (principles for a good society) are needed.
slide27

Factor Supply Curves

Labor Supply

Capital Supply

Dollars

Material Supply

Units

slide28

Product markets for goods and services, with aggregate demand and supply curves that determine the prices to be charged

Consumers, whose marginal utilities for a mix of goods and services can be expressed as individual demand curves

Producing firms, whose marginal costs determine a company supply curve for the goods and services and whose marginal productivity rates determine company demand curves for the various input factors

Political process, for a partial redistribution of income from owners and workers to individual consumers and public agencies within the society

Microeconomic Theory

Owners of land and capital, whose supplies are fixed over the short term, and workers, whose marginal utility for income limits the labor supply, also over the short term

Factor markets for material, labor, and capital, with aggregate demand and supply curves that determine the prices to be charged

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