BUSINESS ETHICS & RELATED APPROACHES

1. BUSINESS ETHICS & RELATED APPROACHES Bilge Öztürk Mehmet Hartlap Murat Akkaya Mehtap Ulusal

2. Topics to be Covered • Basic Definitions & Ethical Approaches • Business Ethics and its Evolution • Ethics in Business • Managing Business Ethics

3. Basic Definitions and Ethical Approaches Bilge ÖZTÜRK

4. Basic Definitions • Norms • Values • Morality • Ethics

5. Norms • Action directives that tell us what we should or should not do in certain situations.

6. Values • Intrinsically worthy experiences, states of affairs and qualities of people or organizations.

7. Morality • The special set of values that mark off the more or less absolute limitations on behavior

8. Ethics Ethics – A set of moral principles or values that governs the conduct of an individual or a group.

9. Ethics Continued • Micro ethics: our personal and professional concerns for living well and doing what is right • Macro ethics: larger concerns about the kind of society we live in, the kind of economic system that serves the society

10. Ethical Theories Ethical Fundamentalism Utilitarianism Ethical Relativism Rawls’s Social Justice Theory Kantian Ethics

11. Ethical Fundamentalism • Ethical fundamentalism - When a person looks to an outside source for ethical rules or commands.

12. Utilitarianism • A moral theory that dictates that people must choose the action or follow the rule that provides the greatest good to society. • This does not mean the greatest good for the greatest number of people.

13. Kantian Ethics (Duty Ethics) • A moral theory that says people owe moral duties that are based on universal rules. • This theory would have people behave according to the categorical imperative: “Do unto others as you would have them do unto you.”

14. Kantian Ethics (Duty Ethics) (continued) • Deontology’s universal rules are based on two important principles: • Consistency • Reversibility

15. Rawls’s Social Justice Theory • Rawls’s social contract A moral theory that says each person is presumed to have entered into a social contract, with all others in society, to obey moral rules that are necessary for people to live in peace and harmony.

16. Rawls’s Social Justice Theory (continued) • Rawls’s Distributive Justice Theory • “veil of ignorance”would permit the fairest possible principles to be selected.

17. Ethical Relativism • A moral theory that holds that individuals must decide what is ethical based on their own feelings as to what is right or wrong. • If a person meets his or her own moral standard in making a decision, no one can criticize him or her for it.

18. Business Ethics and Its Evolution Mehmet Hartlap

19. “The most powerful argument for ethics in business is success.”Robert C. Solomon

20. What is Business Ethics? • Consist of principles and standards that guide behavior in the world of business.

21. Evolution of Business Ethics • Before 1960: Presented from a religious viewpoint…concerns about fair wages; labor practices; capitalism • The 1960s: organization became ethical unit; numerous consumer protection laws

22. The 1970’s • Began to develop as a field of study • Business Professors began to teach & write about corporate social responsibility • Philosophers applied ethical theories to business • Centers dealing with issues of business ethics established

23. The 1980s - Consolidation • Acknowledged as a field of study • Growth of college courses • Growth of services provided by Centers of Business Ethics

24. The 1990s - Institutionalization • support of free trade, but greater restrictions on tobacco companies’ advertising • Guidelines for Organizations, setting tone for ethical compliance programs

25. 2000 & Beyond • Trend to move away from legally based ethical efforts to…. • Culturally-based ethical initiatives • Seeing development of global standards of ethics

26. Business Ethics:Today vs. Earlier Period Society’s Expectations of Business Ethics Expected and Actual Levelsof Business Ethics Ethical Problem Actual Business Ethics Ethical Problem 1950s Time 2000s

27. Ethics in Business Murat Akkaya

28. Why study business ethics?

29. Why? Why? Why? • According to the study carried by Price Waterhouse Coopers, Turkey is the 4th country in CORRUPTIONamong 35 countries. • According to international transparency, Turkey is numbered as 62nd among 102 countries in 2002, 52nd in 2001 and 27th in 1995. • We think, these are the enough results that shows the need to ethical studies of Turkey.

30. Common Causes of Unethical Behavior • Following boss’s directives • Meeting overly aggressive business/financial objectives • Helping the organization survive • Meeting schedule pressures • Be a team player (group think) • Rationalizing that others do it • Resisting competitive threats • Advancing own career

31. 1-Following boss’s directives • To be a journalist in Doğan Holding!

32. Some Examples From Milliyet • Aydın Doğan yine rekortmen! (http://www.milliyet.com/2004/04/07/ekonomi/aeko.html) • Erzincan’a Aydın Doğan Kız Öğrenci Yurdu! (http://www.milliyet.com/2006/03/19/guncel/gun05.html) • 500 ağaçlık Aydın Doğan Ormanı! (http://www.milliyet.com/2002/04/12/yasam/yas09.html) • Sweet Heart Aydın Doğan in every topic!!!

33. To be a journalist in Doğan Holding!!! • You may see lots of topics in Milliyet or Hürriyet that priase Aydın Doğan. • But surprisingly! You can not find such topics in other newspaper groups (Ciner, Uzan). • Because the boss of the newspapers is Aydın Doğan and The boss’s directives is clear: • Show me as the sweet angel of Turkey • But we know from our research that ethical studies say journalism had to be independent. • So, it is difficult to be an ethical journalist in Milliyet or Hürriyet. • And What about us???

34. 2-Meeting overly aggressive business/financial objectives To Be a banker in

35. To Be a banker in • Citibank in Germany • Citibank in Japan • Citibank in European Area (Hürrüyet, 16.12.2004)

36. 3-Advancing own career • To be a manager in (Vatan, Emine Algan)

37. To be a manager in • You can buy a cancer drug of Roche privatelyfor 88 YTL in Turkey. • But, it was sold to SSK for 230 YTL, because Roche assume that the government was so rich. • Veysi Mungan, an engineer in Roche, complained to court about this interesting situation. • But, all the top managers want to stop him.

38. Common Unethical Acts • Lying to supervisors • Falsifying records • Conflict of Interest • Stealing • Gift/entertainment receipt in violation of company policy

39. Common Misconduct in Organizations • Misrepresenting hours worked • Management lying to employees, customers, vendors or the public • Misuse of organizational assets • Lying on reports/falsifying records • Sexual harassment • Stealing/theft • Accepting or giving bribes or kickbacks • Withholding needed information from employees, customers, vendors or public

40. 1-Misrepresenting hours worked Textile industry in Turkey and China • No boundary of overworking (12 hour a day, 7 days in a week) • No social gains (SSK in Turkey) • No legal salary (Asgari Ücret in Turkey) • Children meet to Factories in Turkey and also in china • So, Who cares the rules?

41. 2-Management lying to employees, customers, vendors or the public • ‘s message to customers and public: • I do not hire children in my company. • But I work with the Chinese companies that hires children.

42. 3-Sexual harassment • A question to business woman in Turkey • Do you face to sexual harassment in your business life? Yes %40/No %48.84/I’m not certain %11 (İnsankaynakları.com)

43. What are the effects of sexual harassment?

44. 4-Withholding needed information from employees, customers, vendors or public • Enron • Tyco • World-com • …

45. EXAMPLES OF UNETHICAL BEHAVOIR • Causing the removal/disappearance of information • Professionals practicing beyond area of expertise • Unnecessary stimulation of conflict • Failure to follow proper procedure • Disregarding individual privacy • Misleading advertising • Conflict of interest

46. 1-Misleading advertising • Norwegian Fishers-Cosmetics Firms • Pantene Pro-V, P&G in England Gençleştiriyor, yeniliyor, sıkılaştırıyor, besliyor. (Hürriyet, 13.05.2005)

47. The Summary Of this Section Hiçbir zaman idealist olmadım, ne yani aç mı kalsaydım? Mehmet Ali Erbil (Taken from the magazine, Haftalık)

48. Managing Business Ethics Mehtap Ulusal

49. Ethical Dilemmas Making decisions under stress or dealing with complex issues that have no clear indication of what is right or wrong. • There are NO simple ethical dilemmas…all have layers of meaning and effect.

50. Ethical Dilemmas • Honesty & integrity • Conflict of interest • Loyalty vs.. truth • Whistle-blowing