mcadams11e_ppt_ch02
Post on 17-Feb-2016
215 Views
Preview:
DESCRIPTION
TRANSCRIPT
LAW, BUSINESS, & SOCIETY
11th Edition
©2015 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated,
forwarded, distributed, or posted on a website, in whole or part.McGraw-Hill
2-2
Learning Objectives Describe some of the ethics issues
associated with America’s recent banking and finance crisis
Discuss America’s current moral climate
Discuss the leading ethical decision-making theories
Distinguish between teleological and deontological ethical systems
2-3
Learning Objectives Distinguish utilitarianism and
formalism Describe Kohlberg’s theory of moral
development Describe some of the forces that
encourage unethical behavior in the workplace
2-4
Learning Objectives Explain the general purpose of ethics
codes in the workplace Explain the general requirements of
the Foreign Corrupt Practices Act Discuss some of the risks and rewards
of whistle blowing
2-5
Introduction to Ethics Current final crisis is a result of:
› Inadequate government regulation› Easy credit, overextended borrowers› Real estate speculation, greed, and
collapsed housing market
2-6
Introduction to Ethics Too big to jail
› America’s big banks are untouched by criminal prosecution Money laundering, mortgage and foreclosure
fraud, and big rigging were discovered Settlements and civil penalties were paid
› Proving criminal wrongdoing and required intent to commit a crime are difficult
2-7
Introduction to Ethics Pattern of abuse
› Subprime mortgage crisis› Savings and loan crisis of 1980s› Corporate greed of the Enron era
CEO Dennis Kozlowski stole millions of dollars from Tyco
Bernard Madoff’s colossal Ponzi scheme
2-8
America’s Moral Climate Americans are questioning nation’s
moral health Majority of people believe moral values
are declining
2-9
America’s Moral Climate College students
› Most of the business students admit they cheated in college or high school
› MBA Oath - Harvard students started a voluntary campaign to promote ethical acts
Changing values› College experience strengthens certain
ethical values› Most young people are self-absorbed
2-10
Ethics Theories Business ethics
› Measurement of business behavior based on standards of right and wrong
Jean-Paul Sartre’s philosophy› Standards of conduct cannot be objectively
discovered or rationally justified › Individuals are responsible for their moral
decisions› Existence precedes essence
2-11
Universal Truths? Religion
› Faiths feature efforts to build absolute and universal standards American managers believe in the Golden
Rule Provides a foundation for a moral life
Libertarianism› Ethical theory rooted in personal liberty› Morality coincides with the maximization of
personal freedom
2-12
Universal Truths? Virtue ethics
› Key to good ethics lies in the classic notion of character
› One must focus on strategies for encouraging desirable character traits
› Person should cultivate the motivation to do the right thing in daily conduct
2-13
Teleology Concerned with the consequences of
an act rather than the act itself Utilitarianism - Good is to be weighed
against evil to reach an ethical decision› Act-utilitarianism
Goal - To identify consequences of an act to determine whether it is right or wrong
› Rule-utilitarianism One must follow rules that generate the
greatest value for society
2-14
Deontology Directed toward what ought to be, what
is right› Principle is primary› Consequence is secondary or irrelevant
Formalism - Measured by the rightness of rules and not by consequences› Categorical imperative - Every person should
act on principles that he or she would prescribe as universal laws Moral rule is categorical
2-15
Corporate Ethical Climate Unfavorable public attitudes toward big
business Businesses are more transparent and
accountable than ever before
2-16
Kohlberg’s Theory of Moral Development Moral development evolves and
improves as a function of age and education
Movement through distinct stages› Preconventional level
Stage 1 - Obey rules to avoid punishment Stage 2 - Follow rules only if it is in own
interest
2-17
Kohlberg’s Theory of Moral Development
› Conventional level Stage 3 - Conform to meet the expectations
of others Stage 4 - Doing right is one’s duty
› Post conventional or principled level Stage 5 - Current laws and values are
relative Stage 6 - Follow self-chosen universal ethical
principles
2-18
Feminine voice - Carol Gilligan’s criticisms› Conceptions of morality are gender-based
Men take an impersonal view of morality Women build morality based on care,
support, and responsiveness› Women are underscored in Kohlberg’s
stages
2-19
Reason or Emotion? Kohlberg and Gilligan theory
› Moral decision making is controlled product of analysis, deliberation, and experience
Emotion/intuition approach› Moral decision making is an automatic,
nonreflective process Mind generates feelings of approval or
disapproval instantaneously when confronted with a moral question
2-20
Reason or Emotion? Moral decision making
› Product of a dual process system› Employs both automatic emotions and
controlled reasoning
2-21
Moral Identity Degree to which moral concerns are
central to one’s sense of self People with stronger moral identities
are likely to engage in good behavior
2-22
Organizational Forces Individual character and organizational
culture influence corporate misconduct Pressure to cheat is cited as an
evidence of an organization’s ethical culture
2-23
The Boss Top corporate bosses in America were
disgraced by various scandals Despite cynicism, bosses are crucial in
setting ethical climate in an organization
Climate of integrity is vital to the success of public company› Should be initiated from the top
management
2-24
Corporate/White Collar Crime U.S. government struggles to curb
corporate crime Deferred and non-prosecution
agreements› Contracts with the government
Company undertakes specified actions in exchange for charges being dismissed or not filed
2-25
Prevention or Enhanced Punishment Sarbanes–Oxley Act (SOX), 2002
› Confronts corporate crime by publicly traded companies
› Provisions Establishes an independent board to oversee
accounting profession Requires executives to personally certify the
accuracy of financial reports
2-26
Prevention or Enhanced Punishment
Creates new crimes and raises penalties Requires publicly traded companies to:
Establish internal control systems Disclose whether they have adopted an ethics code
for senior financial management
2-27
Sentencing Federal sentencing guidelines provide:
› Ranges within which judges are advised to impose sentences
› Greater predictability and consistency in punishment
Companies with effective compliance programs may receive reduced penalties in crimes
2-28
Global Bribery Accepted as a necessary and lawful
way of doing business in many cultures Foreign Corrupt Practices Act (FCPA)
› Chief federal weapon against bribery abroad
› Considers bribery as a criminal conduct› Requires rigorous internal accounting
controls and careful recordkeeping
2-29
Global Bribery› Does not forbid payments for securing the
performance of a routine governmental action
FCPA is controversial from the outset› Some consider that the act damages
competitiveness Most industrial countries are moving
toward the zero tolerance of bribery
2-30
Whistle Blowing False Claims Act
› Rewards individuals who help stop fraud involving government contracts
Dodd–Frank Wall Street Reform and Consumer Protection Act› Include a cash reward for information that
leads to a recovery exceeding $1 million Whistle blowers are entitled to 10 to 30
percent of the recovery
2-31
Whistle Blowing Retaliation
› Whistle blowers pay high price for exercising consciences
› Dodd–Frank forbids discharge, demotion, and other forms of retribution against securities law whistle-blowers
top related