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People may face the need to make ethical decisions in their daily lives
and not every decision can be covered by economic, legal or company
rules and regulations. Responsible decision making must rely on the
personal values and pricnples of individuals involved.
Before ethics and business was an oxymoron of sorts. This is because
people thought that business by nature was wrong or weird. (sort of
like today and politics) But now, people understand that there is too
much harm that occurs when there is a wrong ethical decision being
made. Too many people are hurt, like in the case of Enron where
everyone remotely affiliated with the company was hurt. The
consequences of unethical behavior and unethical business institutions
are too serious for too many people to be ignored.
Business should mind how they affect their stakeholders. In a general
sense, a business stakeholder will be anyone affected, for better or
worse, by deciisons made within a firm.
It is now clear thata company can lose in the marketplace, it can go
out of business, and its employees can go to jail in case no one is
paying attention to the ethical standards of the firm. Along with the
negative comes the positive. There are benefits to having ethical
business practices such as a competitive business advantage. This is
because a firms reputation for being ethical or charitable can
encourage purchasers to buy from said company. Also, internally,
organizational structure and efficiency can increase due to trust,
loyalty, commitment, creativity and initiative that flourish when a
company has ethical standards and meets them.
Some famous ethicists are Aristotle, John Stuart Mill, and Immanuel
Kant. Ethics refers not only to an academic discipline, but to that arena
of human life studied by this academic discipline, namely, how human
beings should properly live their lives.
As individuals, we need to recognize that our social environment will
greatly influence the range of options that are opten to us and can
significantly infelunce our behavior. Otherwise good people can, in the
wrong circumstances, do bad things and less ethically motivated
indviduals can, in the right circumstances, do the right thing.
Ethics is normative, in that it deals with our reasoning about how we
should act. Social sciences such as psychology and sociology also
examine human decision making and actions, but these sciences are
descriptive rather than normative. They explain how and why pople do
act the way they do while ethics is normative in that it says this is how
people should act. A normative discipline means that it deals with
norms, those standards of appropriate and proper (or normal) behavior.
Norms establish the guidelines or standards for determining what we
should do, how we should act, what type of person we should be.
Morality is the aspect of ethics referred to by the phrase personal
integrity. Social ethics is the collective nature of everyone and raises
questions of justice, public policy, law, civic virtues, organizational
structure, and political philosophy. Within a business setting,
individuals will constantly be asked to make decisions affecting both
their own personal integrity and their social responsibilities.
Expressed in terms of how ew should lie, the major reason to study
ethics becomes clear. Whether we explicitly EXAMINE tehse questions
or not, each and every one of us ANSWERS them every day in the
course of living our lives. Our only real choice is whether we answer
them deliberately or unconsciously.
Values are those beliefs that incline us to act or to choose one way
rather than another.
A corporations culture is a way of saying that a corporation has a set of
identifiable values that establish the expectations for what is normal
within that firm.
Ethical value serve the ends of human well being. Acts and choices
that aim to promote human welfare are acts and choices based on
ethical values. Secon, the well being promoted by ethical values is not
a personal and selfish wellbeing. So one can say that ethical values are
those beliefs and pricniples that impartially promote human well being.
(Controversy may arise when we try to specify more precisely what is
involved in human well being, but we can start with some general
observations> happiness certainly is a part of it, as is respect, dignity,
integrity, and meaning. Freedom and autonomy surely seema part of
human well ebing as do companionship and health. Once again
controversy will arise because well being may be understood in many
forms. In case you believe ina life after this oen, then well being would
mean doing what God told you so you can have a good life on earth
and in the afterlife. However, in case you dont, then your idea of well
being will differ and what you do to seek that will differ greatly. Is it
possible to reach consensus that well being is NOT doing whatever it is
we feel like doing? By this, can we all agree, that man, should he
completely left to himself, will hurt himself. Not necessarily destroy
(though possible), but, hurt. In case we can agree to this, then we can
realize that not all of mans impulses, motivations, etc will bring about
well being. The question is then, to align the impulses one acts on with
ones beliefs and ideals as to reach a state of well being meaning in
line with ones beliefs about what is right and wrong. To reach a state
of goodness and peace of mind where inner conflict is minimalized
below the necessary threshold where contentment of heart is reached
and thus quietness of mind)
In the tradition of ethical values, one must consider the law. You may
have 5 options. Option 1 is the best 2 is less good 3 more so and so on.
Option 1, though ethical is completely illegal so you are forced to use
option 2. Sometimes the law will give you 5 options but one of them
are unethical, for example, the law doesnt say you cant fire an
employee for no reason, even though this is unethical.
Coporations hire ethics officers to make sure that they are in
accordance with the law. Though this is common sense, these
coporations may think because we are abiding by the law, we are
ethical and need not do anything further since we are a good
company however the book argues that it is not sufficient in order to
be an ethical company. Examples given are Nazi Germany and
apartheid in South Africa. Some countries make child labor or sexual
discrimination legal, but businesses that choose to adopt such
practices do not escape ethical responsibility (and the condemnations
of the people) for doing so. For example, there is are infamous movie
producers in Egypt that produce horrible movies that corrupt the
youth. They display sexualized women, gangsters, life of crime and
drugs but GLORIFY it. Youth are then encouraged to reenact these
scenes and this further corrupts Egyptian society. Legal, yes
ethical. -.- who are we kidding?
The law can be an efficient mechanism to prevent serious harms, but it
is not very effective at promoting goods. Which is why you need ethics
beyond the law because it doesnt prohibit lying per se, and it doesnt
penalize parents for not loving their children or treating them the best
that they can.
Telling business that its ethical responsibilities end with obedience to
the law is just inviting more and more legal regulation. This is because
theyd have to cover almost every aspect of business by law.
Law cant possibly anticipate eery new dilemma business might face,
so often there may not be a regulation for the particular dilemma
confronting a business leader.
Chapter 2:
The first step in the ethical decision making process is to determine
the facts. Making an hoesnt effort to understand the situation, to
distinguish fact from opinion is essential. However perceptual
differences in how indivuduals experience and understand siutations
can explain many ethical disagreements.
The second step is to identify the ethical issues involved. You need to
recognize a decision or issue as an ehical decision first because in case
you dont you can make decisions that dont take ethical matters into
account making you ethically accountable.
How does one determine that a question raises an ethical issue at all?
When does a business decision become an ethical decision?
In order to know this one should be sensitive to ethical issues and
know that this sensitivity must be cultivated in ethically responsible
people. One needs to ask how ones own decisions will impact the well
being of the people involved.
Normative myopia, or short sightedness about values may occur when
one is so focused on the financial aspects of decisions and fails to
balance it against the ethical aspects so that it doesnt cross any
ethical boundaries.
The third step involved in ethical decision making involves one of its
more vital elements. One is to identify and consider all of the people
affected by a decision, the people often called stakeholders.
Considering issues from a variety of perspectives other than ones
own, and other than what local conventions suggest, helps make ones
decisions more reasonable and responsible. Making decisions from a
narrow and personal point of view likewise guarantees that one is not
Anyone can offer prescriptions for what you should do and how you
should act, but philosophical ethics answers the question why? as
well by connecting its prescriptions with an underlying account of a
good and meaningful human life.
Philosophical ethics deals with a basis that people, regardless of their
theological perspectives, can agree on based off of a human level of
understanding. help the poor to go to heaven would not be regarded
as philosophical ethics because it presupposes that you as a person
believe in an afterlife. However help the poor to reduce human
suffering is something that many can agree on and therefore would
likely to consider from a HUMAN perspective regardless of the
theological considerations.
There are several persepectives from which we can view ethics. The
perspective of utilitarianism which is an ethical tradition that directs us
to decide based on overall consequences of our act; deontological
ethical traditions, which direct us to act on the basis of maral principles
such as respectinghuman rights; a theory of social justice that takes
fairness as the primary social principle. There is also virtue ethics,
which directs us to consider the moral character of invidiuals and how
various character traits can contribute to, or obstruct, a happy and
meangiful human life.
Utilitarianism beigns with the convition that we should decide what to
do by considering the consequences of our actions. The idea is to make
better decisions. better decisions are defiend as decisions which
lead to consequences that promote HUMAN well ebing: the happiness,
health, dignity, integrity, freedom, and resepct of all the people
affected.
To understand why democracy is a good thing we need to
understand its roots. Democracy is a reaction to the monarchy where
the mass is used to serve a few. This is a monarchy, in history at least
monarchies are infamous for such. To fix this problem, democracy was
born which was the idea of helping as many people as possible reach
the maximum amount of happiness as possible. A decision that
promotes the greatest amount of values for the greatest number fo
people is the most reasonable decision from an ethical point of view (in
the lense of utilitarianism). Utilitarianism doesnt believe in something
as RIGHT OR WRONG but rather it is relative to the consequences of
such an action. Based off of this lying could be good in case it brought
about more overall good than telling the truth. Based off of this theory
social sciences such as ecnomoics, anthropology, political science,
These two factors together are what come together as the original
position. These attempt to make the priniples chosen to be fair. His
idea is that our decisions out to be made in such a way, and oru social
institutions ought to be organized in such a way, that they would prove
acceptable to us no matter whose point of view we take.
(the idea of greed and self interest as many times an anti-makeup
to behavior. Something that makes things uglier. One says every
action is a greedy one. Fine, this is possible. There seems to be an
apparent struggle between self itnerst and altruism or between
motivation that is self regarding and motivation that is oterh
regarding but I doubt that any one decision is completely one or the
other. By taking care of yourself you take care of others and when you
take care of others you take care of yourself. Our interest lies in all of
us. Our individual interest lies in the interest of all of us. And the interst
of all of us lies in the interest of each of us.)
Virtue ethics:
A branch within philosophical ethics which deals with what tpype of
person you should become (by the character traits or virtues which
youd embody) that would be necessary to lead a full and good human
life. Virtue ethics seeks to undersand how traits are formed and which
traits bolster and which undermine a meaningful, worth while, and
satisfying human life so that we can take responsibility for the person
we become. Virtue ethics calls on us to reflect on two deeper
questions.Given a more detailed and textured description of maral
behavior, which set of virtues are more likely to embody a full,
satisfying, meaningful, enriched, and worthy human life? Virtue ethics
also reminds us to oibserve how character trais are formed and
conditioned. Virtue ethics reminds us to look to the actual practices we
find in the business world nd ask what type of people tehse practices
are creating. How can one disassociate himself and his own vales from
his work, and the social institutions and practices that encrouage it.
To make ethical decisiosn look at page 88 that has the decision making
process for ethical decision making.
Humn rights versus legal rights:
Human rights differ from legal rights in that , unlike legal rights, the
existence of human rights is not contingent upon any institution.
(end of chapter 3)
Chapter 4:
Individuals can be hindered or helped in making the right, or the
wrong, decision by the expectations, values, and structure of the
organization in which they live and work.
Every organization has a culture which is fashioned by a shared pattern
of beliefs, expecations and meanings that influence and guide thinking
and heaviors of the members of that organization.
Culture of an organization is something that you can either work well
with or it will work against you. They are the written and unwritten
rules of the work place. This occurs namely because people hide things
from themselves and dont want to admit them openly (unwritten
rules) and others they dont mind to (written rules). One might enter a
corportate culture with ones own expectations and be surprised to find
the culture quite different from the one he was expecting and may
clash (for better or worse). Culture changes and in order for one to
change the culture, strong leaders are necessary to have a significant
impact on a culture.
Culture is present in and can be deteremined by exploring any of the
following, among others:
Tempo of work, the organizations approach to humor, methods of
problem solving, the competitive environment, incentives, individual
autonomy, hierarchical structure.
Culture can be so apart of a person that one does not recognize its
existence.
IN situations wehre the alw is an incomplete guide for ethical decision
making, the business culture is likely to be the determining factor in
the decision.
Corporate culture can help or hurt ethical decision making. It is the
sum total of all the corporate practices that encourage, shape, or allow
some types of decisions and discourage others.
The cultivation of habits, including the cultivation of ethical virtue, is
greatly shaped by the culture in which one lives.
Corporate culture shapes you and you shape the culture. Its said in the
book that the culture shapes you more so that you shape it (but I
suppose thats the whole nature vs. nuruture debate again).
Corporations can have one of two cultures. It can have a compliance
based culture or a values based culture. A values based culture
perceived as more flexible and far sighted. A value absd culture is one
One can distinguish between good leaders and ethical leaders. Good
leaders are leaders who are able to guide, direct and escort others
towards a destination. A good leader is someone who does this
previously mentioned process successfully and effieciently. However,
not every good leader is an ethical one and vice versa. Some means
may be ethical and better than others (persuasion rather than
coercion). However, it is not means alone that makes one an ethical
leader. The other element of ethical leadership involveds the end or
gaol towards which the leader leads.
(according to the book) its best to try to resolve the conflict internally
first and also advises the company to have mechanisms that are
effective for employees to be able to report any behavior that was
unethical.
An unethical corporate culture can cause an internal risk to the
companys business practices and can harm stock holders and other
stakeholders (both internally and externally). This is why its important
to fix these problems right away. A first clear sign of a toxic corporate
culture would be a lack of generally accepted base values for the
organization. How does the firm treat its customers, suppliers, clients,
and workers? Management of its internal and external stakeholders are
a good measure of the firms internal values. Manage finances?
After the chapter finishes, the readings section talks about how one
must balance between different stakeholders in order to stay in line
with the companies expectations of itself. For example, the adage the
customer is always right isnt necessarily always right. Sometimes the
firm needs to fire a customer because the customer has hurt one of the
firms employees. Not all firms put their customers first, other firms put
their employees first.
Chapter 5:
CSR (corporate social responsibility) encompasses the responsibilities
that businesses have to the societies within which these businesses
operate. Or a concept whereby companies decide voluntarily to
contribute to a better society and a cleaner environment. It might be a
good idea for business to identify its stakeholder groups and
incorporate their needs and values within its strategic and operational
decision making process.
Coproprate citizenship model of CSR often exists where there is a
strong leader with a sense or responsibility and connection to the
community. These CSR efforts are solely for the public good and do not
expect a commercial reutn on their contributions.
Social Contract model of CSR holds that there is a corporate
responsibility to respect the moral rights of various stakeholders due to
the argument that corporations reap the benefits of serving as a
river blindness which causes people to eventually lose their eye sight.
The company has given all these tablets because we are in the
business of preserving and improving human life. WHAT A BUSINESS!
So they did that by giving back. They werent obliged to, but the
question is, when theres a blind man heading towards a pit, how
obliged are you to scream and stop him from falling in.
Some companies engage in CSR but dont tell anyone about it. (P&G
spend 2.5 million in cash and products to help at the 9/11 site). Others
spend a lot to publicize the good that they do (Philip Morris Co. spent
250 million dollars on an advertising campaign that communicates its
charitable activities) The reason companies do this is because of
reputation mangamgemnt which works to make the firm look better in
peoples eyes. This develops something called a trust bank, which is
when consumers or other stakeholders teem to give the company slack
in case they hear something bad about the company. However some
firms think theyre doing good and market all the good that they do
while these same firms community development projects have created
community rifts in areas where their projects are at work. Can you
really say that theyre good or bad then unless you examine all the
facts for yourself? Does the company show you all the good and bad so
that you can judge for yourself or does the company only tell you how
awesome it is?
Some firms engage in CSR only to make more money. The reason for
this is that a company (like a certain tobacco company) was financing
the arts of a certain community (a socially charitable event) only to be
able to target these people and improve revenues for the company.
How sick is that!?
Does good ethics mean good business? Theorists continue to dispute
whether ethical decisions lead to more significant profits than unethical
decisions. While we are all familiar with examples of unethical
decisions leading ot high profits, there is a general agreement that, in
the long run, ethics pays off. Better good will, better reputation, less
risk. According to the book, it is better for the business to stick with the
good path because it is more profitable in a sustainable manner rather
than quick profits that will eventually cause it to lose out (ENRON).
Chapter 9 notes:
The clean air act of 1970, federal water pollution act of 1972, and the
endangered species act of 1973 were part of the US national
consensus for addressing environmental problems.
Society had two options to further help these laws enacted. They could
demand environmentally friendly products in the marketplace. As
citizens, individuals could support envionrmental legisltation.
Sustainable development and sutainable business practice suggests a
readically new ision for integrating financial and envionrmental goals,
copared to the growth model that preceeded it. These are three goals,
economic, eivnormental and ethical stuatianbility are referred to as the
three pillars of sustainability.
The goal of this practice would be to develop recommendations that
would pave roads towards economic and social development that
would not achieve short term encomic growth at the expense of long
term einvornmental and economic sustainability. sustainable
forth. This view recognizes that there is more than one way to satisfy
the need that said product does satisfy opening the floor for ingenuity
and innovation.