Business ethics

1.

Business Ethics
Lomonosov MSU BS, Spring 2015/16
Session 1 (April 2, 2016)
Bukhshtaber Natalia,
[email protected]

2.

Pressure to modern manager
Business
organisations
Shareholder Approach: Freeman, 1984

3.

Pressure to modern manager
Results!!!
Competitiveness
Ambition
Innovation
Work-Life Balance ?
Business
organisations

4.

Business Ethics: Definitions
“To educate the mind without the morals is to educate a
menace to society” Theodore Roosevelt
“Business is not just about making money, it is also a way to
achieve peace through respect for human rights and social
responsibility” Fr. Oliver Williams
“Business is about people, people and people…”
Richard Branson
• Ethics:
(1) “the principles of conduct that governs individual or a group”
(2) “the study of morality” - a discipline that examines good or bad
practices within the context of a moral duty
• Moral conduct is behaviour that is wrong or right. Morality is a set of
standards (norms) that people has about what is wrong or right
• Ethics applies to all human activities
• Business ethics studies business practices and behaviours that are good or
bad. Business cannot survive without ethics

5.

What is important about people?
Employees are not Resources. They are people that have their
Rights, Values and Feelings.
The relationships with the people who are employees should
be managed.
Emotional Intelligence
Emotional intelligence is the capacity of
individuals to recognise their own, and
other
people's
emotions,
to
discriminate between different feelings
and label them appropriately, and to
use emotional information to guide
thinking and behaviour.
So, good or bad practices in business are about ...

6.

People are not an asset
Employers no longer chant the old mantra:
“People are our greatest asset”.
Instead, they claim: “People are our greatest liability”.
For business organisations, this shift will require more than just
a few new programmes and a few new practices. It will require
new measurements, new values, new goals, and new policies.
Peter F. Drucker, 2002

7.

Relationship: Ethics - Morality
Ethics
Morality
Prescribing good actions
Good
Benign
Positive actions for
good or to prevent
harm being done
Avoiding doing
harm, supports the
doing of good but
takes no positive
action to do good
• Social
development and
Caring
• Social
responsibility and
Supporting
• Reciprocity
Proscribing bad actions
Indifferent
Ignoring harm done
by or to others and
disregarding the
rights of others
• Lying and
dishonesty
• Fairness
• Cheating and
Selfishness
Bad
Taking actions to do
harm
Taking no action to
prevent harm being
done
• Bullying and Social
irresponsibility
• Harming and
Social and
environmental
disengagement

8.

Reputation and Trust
Business is about people, and your reputation is built on how you treat people.
In business your reputation affects how likely others are to trust you, and
what kind of deals they'll offer at the negotiating table.
It take years to build trust and reputation and a seconds to destroy it.

9.

Ethics and the Law
• Law often represents an ethical minimum
• Ethics often represents a standard that exceeds
the legal minimum
Frequent Overlap
Ethics
Law

10.

Sources of Ethical Norms
Fellow Workers
Mass Media
Family
Country
Profession
The Individual
Conscience
Friends
The Law
Employer
Religious
Beliefs
Society at Large

11.

External Sources of a Manager’s Values
Philosophical values
Cultural values
Professional values
Religious values
Legal values etc.
Terminal and
Instrumental Values
Rokeach, M. (1973). The Nature of Human
Values. New York: The Free Press.
https://study.com/academy/lesson/terminalvalues-definition-examples-quiz.html

12.

Terminal Values
A World of Beauty
A Comfortable Life
18
Equality
16
A World at Peace
14
An Exciting Life
12
10
Wisdom
Family Security
8
6
4
True Friendship
Freedom
2
WOMEN
0
Social Recognition
Health
A Sense of
Accomplishment
Inner Harmony
Self-Respect
Mature Love
Salvation
National Security
Pleasure
MAN

13.

Instrumental Values
Self-controlled
Ambitious
18
Broad-minded
16
Responsible
Capable
14
12
10
Polite
Clean
8
6
4
Obedient
Courageous
2
WOMEN
0
MAN
Loyal
Forgiving
Loving
Helpful
Logical
Honest
Intellectual
Imaginative
Independent

14.

Ethical Dilemma
Dilemmas are situations or problems where a person
has to make a difficult or unpleasant choice.
If a person decides to act according to one set of
conventional norms or rules then they will break
another set of expectations.
Situation 1
Situation 2

15.

A map of ethical theories
Individual Processes
Virtue ethics
• Virtue ethics
• Ethical care
Ethical learning and
growth
• Ethical egoism
• Communitarianism
• Individual growth
Principle
Doing right
Policy
Doing good
Deontological ethics
Teleological ethics
(Strict adherence to
principles and duties)
• Kantian imperatives
• Rights
• Justice as fairness
(Consequentialism)
• Utilitarianism
• Discourse ethics
Institutional Structure
Fisher and Lovell, 2009

16.

Ethical decision making
Moral
Awareness
Moral
Judgment
Moral
Intention
Moral
Action
Does not always happen…
Discuss in your groups:
Why do you think managers sometimes behave unethically even
if they are aware of ethical grounds?
Give examples.

17.

Grounds for Manager’s Decisions
Manager's perceptions of whether he/she does "what's right"
depend on …
Respect for the authority structure
Loyalty
Conformity
Performance
Results
And it is influenced by such things as the situation, the time
frame, the expectations of others, and whether he/she has faceto-face interaction with the object of the actions etc…

18.

Management Judgment
Situation 1
The chairman of a company has to decide whether to adopt a new programme. It would
increase profits and help the environment too.
“I don’t care at all about helping the environment “, the chairman says.
“I just want to make as much profit as I can. Let’s start the new programme”.
1) Would you say that the chairman intended to help the environment?
2) Would you say it is an example of ethical judgment?
Situation 2
The chairman of a company has decided to adopt a new programme. The programme
would increase profits but harm the environment .
“I don’t care at all about helping the environment “, the chairman says.
“I just want to make as much profit as I can. Let’s start the new programme”.
1) Would you say that the chairman intended to harm the environment?
2) Would you say it is an example of ethical judgment?

19.

Management Judgment - Ethics
1. Moral Management: Conforms to high standards of
ethical behaviour.
2. Amoral Management:
– Intentional - does not consider ethical factors
– Unintentional - casual or careless about ethical
considerations in business (bounded ethicality)
3. Immoral Management:
A style devoid of ethical principles and active
opposition to what is ethical.

20.

Ethical Evaluation Framework
Behavior or act
that has been
committed
compared with
Ethical norms and
standards
Judgments and
perceptions of the
observer
• What is more difficult – to judge yourself or others?
• How can you improve the quality of ethical decision
making?

21.

Kohlberg's Levels of Moral Development
Focus:
Self
Focus:
Others
Focus:
Humankind
Level 3:
Post-conventional,
Autonomous, or Principled
stages
Level 2:
Conventional stages
Level 1:
Pre-conventional stages
Stage 4: Law and other morality
Stage 3: Good boy / nice girl
morality
Stage 2: Seeking of rewards
Stage 1: Reaction to punishment
http://www.youtube.com/watch?v=XUqT8IHCeLE
Stage 6: Universal ethical principle
orientation
Stage 5: Social-contract orientation

22.

Why managers behave ethically
1. To avoid some punishment
MOST OF PEOPLE
2. To receive some reward
MANY OF PEOPLE
3. To be responsive to family, friends or
superiors
4. To be a good citizen
VERY FEW PEOPLE
5. To do what is right, pursue some ideals

23.

Kinky Boots

24.

Kinky Boots
The factory consists of people, not of the bricks …