ETHICS •Definition

•Legal vs. ethical

•Frameworks or theories

•Ethical principles

EthicsEthics Principles of morality or rules of conductPrinciples of morality or rules of conduct

The study of morals and systems or The study of morals and systems or morality or principles of conduct morality or principles of conduct concerned with:concerned with:

right or wrongright or wrong

should or should nots in behavior should or should nots in behavior and decision makingand decision making

Ethical versus Legal Behavior

• Not all moral norms have been codified.

• Society relies on more than laws to function effectively

• Acting legally is the minimum required behavior for business people– Trust is paramount – hence morality

• Not all laws are moral

Henderson’s TypologyEthical

Unethical

Illegal Legal

1 4

2 3

Desired quadrant

Undesired quadrant

E.G. Chemical manager refuses to promote a

pregnant female into an area of potential hazardous

exposure.

E.G. Marketing infant formula that needs to be mixed with water in an illiterate country

with poor sanitation.

Ethical or Moral Frameworks

• Consequential Theories

• Rule-Based Theories

• Cultural

Consequential Theories

• Focus on goals, end results and/or consequences of decisions or actions

• Concerned with doing the maximum good and minimum harm

• Cost-benefit approach• Example: Utilitarianism

– Do the best for the most– Produce the most net utility

• Reliance on objective data when possible

Rule-Based Theories

Emphasis is on duty, obligations and rights• Categorical imperative (Kant)

– Individuals should be treated with respect and dignity as an end in itself. No end justifies a harmful means

– Criteria for treatment consistently applies across people (Justice criterion)

• Fundamentalism – rules come from “higher authority”– Torah, Koran, Bible, etc

• Rights – make decisions that respect and protect basic rights of individuals – e.g. Respecting Bill of Rights – U.S.

Cultural Theories

• Emphasizes different standards of conduct in different locations (like Texas)

• Local standards prevail

• Cultural relativism

Situational Ethics

• Similar to cultural relativism

• What is right varies with the situation

• Is this really ethical?

• Use the ethics principles and models for ethical decision making

Ethical Principles – Self Serving Models for Decisions

• Hedonist principle– Do whatever is in one’s self interest and not

illegal

• Might-equals-right principle– Do whatever one is powerful enough to

impose – but not illegal

• Organization interests principle – Do what is good for the organization – but not

illegal

Ethical Principles – Balancing Interests Principles

• Means-ends principle– Overall good justifies any moral transgression

• Utilitarian principle– Act on the basis of whether the harm inherent

is outweighed by the good

• Professional standards principle– Act on the basis of whether the decision can

be explained before a group of peers

Ethical Principles - Concern for Others Principles

• Disclosure principle– How would the general public likely respond

to the rational of the action or decision?

• Distributive justice principle– Act on the basis of treating an individual or

group equitably

• Golden rule principle– Place yourself in the position of someone

affected by your decision.

Examination of Ethics – Group Exercise

• Discuss scores on survey (you may abstain if you so choose)– Obtain a group average. Record to hand in.

• Do Group Exercise 2 – page 120.– Record on same sheet of paper.– When done, contact me for scoring sheet.– Compute scores and record.