Ethical Behaviour

Ethical Behaviour and Social Responsibility

Planning ahead—study questions:1. What is ethical behaviour?2. How do ethical dilemmas complicate the

workplace?3. What types of things might corporations

do to show that they have a social conscience?

4. Is it a corporation’s responsibility to be socially aware or should they be a strictly profit-driven entity?

Ethics

• Code of moral principles.

• Set standards of good and bad and right and wrong.

Ethical behaviour

• What is accepted as good and right in the context of the governing moral code.

What is Ethical Behaviour?

• Ethical behaviour should also be legal in a

just and fair society.

• Legal behaviour is not necessarily ethical

behaviour.

• Personal values help determine individual

ethical behaviour.

Law, Values, and Ethical Behaviour

Ford Motor Company Case Study

• Read the case study on Ford Motor Company and answer the following questions:

1. From a corporate perspective, what are some of the pros and cons of Ford’s decision to not recall vehicles? What was their logic?

2. From a social perspective, what are some of the pros and cons of Ford’s decision to not recall vehicles?

• From a corporate perspective, what are some of the pros and cons of Ford’s decision to not recall vehicles? What was their logic?

• PROS: More cost effective (on paper), no recall = minimal negative publicity, build/sell more Pinto’s, money saved can be invested elsewhere (production facilities, new technologies, etc.)

• CONS: Greed vs. human life, horrible image for Ford, questionable quality of vehicles, lawsuits and legal fees, low employee morale

• From a social perspective, what are some of the pros and cons of Ford’s decision to not recall vehicles?

• Pros: reduced layoffs of employees working on the Pinto, survivors made a lot of money from lawsuits, cars were less costly, this case provided a good example of corporate corruption to society, providing jobs

• Cons: caused deaths and injuries, unethical – what else are corporations hiding from society?

Views on Ethical Behaviour

Utilitarian view of ethics: greatest good to the

greatest number of people.

Individualism view of ethics: primary commitment is to

one’s long-term self-interests.

Moral-rights view of ethics respects the fundamental

rights of all people.

Justice view of ethics fair and impartial

treatment of people according to rules and standards.

Views on Ethical Behaviour

Cultural relativism:

• Ethical behaviour is always determined by cultural context.

Ethical imperialism:

• Behaviour that is unacceptable in one’s home environment should not be acceptable anywhere else.

Cultural Issues in Ethical Behaviour

Management Fundamentals - Chapter 3 11

Figure 3.2 The extremes of cultural relativism and ethical imperialism in international business ethics.

Source: Developed from Thomas Donaldson, “Values in Tension: Ethics Away from Home,” Harvard Business Review, vol. 74 (September-October 1996), pp. 48-62.

How Companies Can Respect Values

Respect for human dignity Create culture that values employees,

customers, and suppliers. Keep a safe workplace. Produce safe products and services.

Respect for basic rights Protect rights of employees, customers, and

communities. Avoid anything that threatening safety, health,

education, and living standards.

How Companies Can Respect Values

Be good citizens Support social

institutions, including economic and educational systems.

Work with local government and institutions to protect environment.

Ethical Dilemmas

• Ethical Situations