Chapter 1 An Overview of Ethics

1. Chapter 1An Overview of Ethics Chapter 1 - An Overview of Ethics

2. Chapter 1 - Objectives • To understand ethics and why they are important in ways that are consistent with a code of principles. • Understand why business ethics are becoming increasingly important. • Identify what actions corporations are taking to reduce business ethics risks. • Understand why corporations are interested in fostering good business ethics. • Identify different approaches to ethical decision making. • Discuss the risk of negative impact due to the unethical use of information technology. Chapter 1 - An Overview of Ethics

3. Ethics Defined • Moral codes are the rules that establish the boundaries of generally accepted behavior. • Morality refers to social conventions about right and wrong human conduct. • Ethics are beliefs regarding right and wrong behavior. Chapter 1 - An Overview of Ethics

4. Ethics Defined • Virtues are habits that incline us to do what is acceptable. • Vices are habits that incline us to do what is unacceptable. • Value System is the complex scheme of moral values that we choose to live by. Chapter 1 - An Overview of Ethics

5. The Importance of Integrity • Integrity is used to refer to people who act in ways that are consistent with their own code of principles. • You often reflect on your principles when you consider what you “ought” to do in different situations. Chapter 1 - An Overview of Ethics

6. Ethics in the Business World • Globalization of organizations has created a complex business world. • Risk is the likelihood of a negative event times the impact of the event. Chapter 1 - An Overview of Ethics

7. Why Business Ethics are Important • Protect the organization and its employees from legal action. • Create an organization that operates consistently. • Produce good business. • Avoid unfavorable publicity. • Gain the goodwill of the community. Chapter 1 - An Overview of Ethics

8. Legal Overview • Bribes involve providing money, property, favors, or anything else of value to someone in business or government in order to obtain a business advantage. • Gifts are made openly and publicly as a gesture of friendship or goodwill with no expectation of a future favor for the donor. Chapter 1 - An Overview of Ethics

9. Improving Corporate Ethics • Appoint a corporate ethics officer. • Ethical standards should be set by a board of directors. • Establish a corporate code of conduct. • Conduct social audits. • Require employees to take ethics training. • Include ethical criteria in employee appraisal/reward systems. Chapter 1 - An Overview of Ethics

10. Code of Conduct • A guide that highlights an organization’s key ethical issues and identifies the overarching values and principles that are important to the organization and that can help in decision making. • The code of conduct helps ensure that employees: • Abide by the law. • Follow necessary regulations. • Behave in an ethical manner. Chapter 1 - An Overview of Ethics

11. Ethical Decision Making • Get the facts. • Identify the stakeholders and their positions. • Consider the consequences of your decision. • Weigh various guidelines and principles (Virtue, Utilitarian, Fairness, Common Good). • Develop and evaluate options. • Review your decision. • Evaluate the results of your decision. Chapter 1 - An Overview of Ethics

12. Approach to Dealing with Moral Issues Principle Virtue Approach The ethical choice is the one that best reflects moral virtues in ourselves and our community. Utilitarian Approach The ethical choice is the one that produces the greatest excess of benefits over harm. Fairness Approach The ethical choice is the one that treats everyone the same and does not show favoritism or discrimination. Common Good Approach The ethical choice is the one that advances the common good. Four Common Approaches Used in Ethical Decision-Making Table 1.5 Chapter 1 - An Overview of Ethics

13. Ethics in Information Technology • The increased use of information technology has raised many ethical issues for today’s IT professional. • Licensing of IT professionals • Internet communication • Intellectual property • Employee/employer issues Chapter 1 - An Overview of Ethics

14. Summary • Ethics are beliefs regarding right and wrong behavior. • Business ethics are becoming increasingly important because the risks associated with inappropriate behavior have grown. • Corporations are interested in fostering good business ethics: • Protect the company and employees from legal action. • Create an organization that operates consistently. • To produce good business. • To avoid negative publicity. • To gain the good will of the community. Chapter 1 - An Overview of Ethics

15. Summary • Ethical decision making process: • Get the facts • Identify shareholders and their positions • Consider the consequences • Weigh guidelines and principles • Develop and evaluate options • Review your decision • Evaluate the results of your decision • The growth of use in IT has also increased the risk of unethical uses of IT. Chapter 1 - An Overview of Ethics

16. Case 1Missing White House E-mail • E-mail problems in the Clinton White House became public in February 2000 through a $90 million class-action suite filed by Judicial Watch, a conservative group that had dogged the Clinton administration with a number of lawsuits since 1994. Chapter 1 - An Overview of Ethics

17. Case 2McKesson HBOC Accused of Accounting Improprieties • HBOC delivered cost effective patient information and hospital data collection systems. Accounting irregularities and questionable business practices resulted in a loss in stock prices and many other legal problems. Chapter 1 - An Overview of Ethics