chapter 4 – ethics and business decision making copyright © 2011- jeffrey pittman
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Chapter 4 – Ethics and Business Decision Making
Copyright © 2011- Jeffrey Pittman
Section 1 – Business Ethics
Ethics in the News
• After the recent bank and corporate failures and government takeovers, ethics continues to be in the news
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Ethics
• Ethics pertains to the study of good versus evil, and to moral behavior
• Western philosophy regarding ethics was shaped by ancient Greek philosophers, and by Christianity
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Greek Philosophers
• Leading Greek philosophers include:
• Socrates• Plato• Aristotle• The Cynics• The Epicureans• The Stoics
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Plato (c. 428 B.C. - c. 347 B.C.)
Why is Business Ethics Important?• Note the difference
between the textbook examples of “illegal” behavior versus “unethical” behavior
• What does the large number of convicted business executives tell you?
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Ethical versus Legal Standards of Behavior• Laws are promulgated by the
government – the law is a mandatory system of rules from an external source
• Ethical principles are voluntary, except to the extent the principles are duplicated by the law – ethical principles are shaped by external sources (e.g., religion), but are ultimately defined by internal decisions
• A majority of the material in Chapter 4 is legal – for example, all court cases analyze law only, not ethics
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Section 2 – Approaches to Ethical Reasoning
Duty-Based Ethics
• Deontology – Following absolute standards of moral behavior, such standards generally coming from religious sources
• Kantian Ethics - Kant’s categorical imperative
• The Principle of Rights – Application of rights corresponding to duties of others
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Outcome-Based Ethics
• Utilitarianism – Ethical behavior as identified through analyzing the consequences of such behavior
• “The greatest good for the greatest number” summarizes this ethical theory
• Jeremy Bentham and John Stuart Mill are philosophers associated with utilitarianism
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Lifeboat Example
• Compare duty-based ethics to outcome-based ethics in analyzing a lifeboat example discussed in class – the Nineteenth Century British case, Regina v. Dudley and Stephens (14 Q.B.D. 273 (1884))
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Regina v. Dudley and Stephens• On July 25, 1884, Captain
Dudley, seamen Stephens and Brooks, and cabin boy Parker were in a lifeboat 1000 miles from land
• After their ship sunk, the men had been 20 days in the lifeboat, 8 without food
• Dudley killed Parker for food; murder charges later followed
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Miscellaneous
Strategy for Ethical Decision Making
• Facts – Gather all necessary facts• Stakeholders – Which stakeholder
groups will be affected by the company decision in question
• Values – What are your personal values and the company values
• Alternative actions – What alternatives actions are possible
• Choose and prioritize – Make a decision based on values and impact on stakeholders
• Decision and implementation strategy
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Stakeholder Analysis
Community
Government Supply Chain
Employees
Investors
Management
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