Business Ethics

1. Business Ethics The Case of the Dirty, Rotten Windows

2. Presenters • Clancy Martin, PhD • Assistant Professor of Philosophy • Wayne Vaught, PhD • Associate Professor of Philosophy and Medicine • Professors Martin and Vaught teach courses in ethics for the College of Arts and Sciences, the Bloch School of Business (Martin) and the School of Medicine (Vaught) at UMKC. They worked together to create the Center for Applied and Professional Ethics at UMKC and appear monthly on the Walt Bodine Show (for UMKC’s local NPR station) as the Ethics Professors.

3. Midwestern University • Central Characters • Ken: Director of Facilities • Chris: Administrative Assistant, Facilities • Gwen: Chief Financial Officer • You: Financial Officer

4. Dirty Rotten Windows: Scene 1 • Midwestern University is an old, large, land-grant institution. • The director of facilities is preparing to hire contractors to replace deteriorating wooden windows and flooring in several older academic buildings. • The Chief Financial Officer is good friends with a local general contractor (W. R. Best Construction) and has asked the Director of Facilities to throw business toward the contractor for large projects.

5. Dirty Rotten Windows: Scene 1 • W.R. Best has been contracting with Midwestern University for several years. • To ensure that W.R. Best receives the job, the director of facilities has on several occasions asked Chris fax a list of specs to W.R. Best. • In the “open bidding” process, W.R. Best submits their bid with specs that ensure they receive the bid.

6. Ethical Considerations • Honesty/Transparency • Is the director of facilities engaging in dishonest business practices? • Loyalty • W.R. Best long relationship with Midwestern • They have consistently performed well • Conflicts of Interest • Is the relationship between Gwen and W.R. Best inappropriate? • Should she avoid making endorsements of contractors? • Is there ever a justification for nepotism?

7. Morality and Ethics • Morality • stems from latin: mores • means character, custom, habit • frequently used in reference to shared beliefs about the norms of right and wrong. • Ethics • stems from greek: ethos • means character • frequently used in reference to the systematic study of moral values and beliefs.

8. Sources of Moral Reasoning • Religion • Reflects the basic tenants of religious faith. • Culture/Community • Reflects commonly shared moral values • Codes of Professional Conduct • Reflects guidelines for professional conduct. • Moral Theory • Basic Ethical Theories and Principles

9. Basic Ethical Theories • Utilitarianism • Greatest good for Greatest Number • Deontology • Good defined in terms of moral duties • Virtue theory • Emphasis on moral character • Ethics of Care • Emphasis on preserving relationships

10. Consequentialist/Utilitarianism • Bentham/Mill • Emphasis is on the consequences of an action • Primacy given to maximizing pleasure/minimizing pain • Greatest good for the greatest number • Act v. Rule Utilitarianism

11. Deontology • Immanuel Kant • Emphasis on Moral Duty/Obligation • Good Will: Only thing good without qualification • Categorical Imperative: Rational Direction of the Good Will

12. Categorical Imperative • Principle of Universal Legislation • An individual must ask if a general rule can be derived such that every person similarly situation would be compelled to do the act in question. • Treat others as ends, not as means only.

13. Kant and Mill Contrasted Mill good defined in terms of pleasures and pains seeks to maximize greatest good for greatest number Utilitarian Calculus Kant good defined in terms of one’s moral duties seeks to follow universal moral principles Categorical Imperative

14. Virtue Theory • Aristotle • Emphasis on Moral Character • Teleological Orientation • Golden Mean

15. Virtue Theory • Aristotle • Teleological in Orientation • To understand good, one must understand purpose • Golden Mean • Alasdair MacIntyre • A virtue is an acquired human quality the possession and exercise of which tends to enable us to achieve those goods which are internal to practices and the lack of which effectively prevents us from achieving any such good.

16. Understanding Virtues • Aristotelian Virtue • Golden Mean • For Aristotle, a virtues are character traits that represent a median point between two vices, which are the extremes of the virtue in question. • Virtue of Courage • Courage is a virtue as it represents behavior at a median between the vices of cowardliness and foolhardiness.

17. Examples of Courage • Firefighters and Police Officers • Success in such fields as law enforcement and firefighting require courage. • Cowardly behavior: Abandoning post. • Foolhardy behavior: Rash behavior- running into a burning building without proper equipment or assessment of situation. Places others at risk. • Courageous behavior: Facing danger while following protocol, following safety regulations.

18. Virtues in Business • Honesty • Integrity • Courage • Impartiality

19. Ethical Considerations • Honesty/Transparency • Is the director of facilities engaging in dishonest business practices? • Loyalty • W.R. Best long relationship with Midwestern • They have consistently performed well • Conflicts of Interest • Is the relationship between Gwen and W.R. Best inappropriate? • Should she avoid making endorsements of contractors? • Is there ever a justification for nepotism?

20. Effective Resolution • Ensure Objectivity in Bidding Process. • Openness/Transparency • Integrity • Personal Responsibility • Authenticity

21. Dirty Rotten Window: Scene 2 • You and Chris (Administrative Assistant in Facilities) are good friends. • As the financial officer in charge of accounts for Facilities, you notice that W.R. Best often receives the bid for large projects. • In a conversation with Chris, she tells you about faxing specs to W.R. Best before the bidding process.

22. Dirty Rotten Windows: Scene 1 • Having attended an ethics lecture at a national meeting for financial officers, you come to the conclusion that such practices are morally dubious. • You contact the director of Facilities to relay your concerns. • You suggest that they refrain from such practices in the future.

23. Director of Facilities Responds: • This is the way we have conducted business with W.R. Best for some time. • We have never had a problem with this before. • I trust W.R. Best to do a good job and his prices are fair. • He is friends with the CFO. • This isn’t any of your concern.

24. You Reflect • After some consideration, you feel uncomfortable with the practice and feel you should do something further. • You make an appointment to speak with the CFO. • The CFO says that this is an issue best handled by the Director of Facilities. • You need to see yourself as a team player.

25. You Vent • You are having drinks with a friend outside the university after work. • You explain the conflict you are having over the bidding process. • Your friend things this is a good story, and has a friend who is a reporter.

26. Media Reports • One afternoon, a reporter contacts you and asks about the practice of open bidding for contractors at Midwestern University. • The reporter asks if you know of contractors receiving privileged information to ensure that they receive the job. • What do you do?

27. Scence 3 • Several years have passed since the issue with the reporter. • You have since received a promotion. • You learn that there will be several lay-offs due to financial constraints but have been instructed not to disclose the information.

28. To tell or Not to tell • Your good friend Chris holds one of the positions that will be lost. • You could tell Chris the news to give her advance warning so that she could begin searching for another position. • What would you do?