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Ethics and Corporate Responsibility

Ethics and Corporate Responsibility. Chapter Five. Ethics. Ethics The system of rules that governs the ordering of values. Caux Principles. Kyosei living and working together for the common good, allowing cooperation and mutual prosperity to coexist with healthy and fair competition.

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Ethics and Corporate Responsibility

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  1. Ethics and Corporate Responsibility Chapter Five

  2. Ethics • Ethics • The system of rules that governs the ordering of values

  3. Caux Principles • Kyosei • living and working together for the common good, allowing cooperation and mutual prosperity to coexist with healthy and fair competition • Human dignity • concerns the value of each person as an end, not a means to the fulfillment of others’ purposes

  4. Ethical Systems • Egoism • An ethical system defining acceptable behavior as that which maximizes consequences for the individual • Utilitarianism • An ethical system stating that the greatest good for the greatest number should be the overriding concern of decision makers.

  5. Ethical Systems • Relativism • Philosophy that bases ethical behavior on the opinions and behaviors of relevant other people • Virtue ethics • Classification of people based on their level of moral judgment.

  6. Ethical Systems • Kohlberg’s model of cognitive moral development • Perspective that what is moral comes from what a mature person with “good” moral character would deem right.

  7. The Ethics Environment • Sarbanes-Oxley Act • An act passed into law by Congress in 2002 to establish strict accounting and reporting rules in order to make senior managers more accountable and to improve and maintain investor confidence

  8. Danger Signs • Excessive emphasis on short-term revenues over longer-term considerations. • Failure to establish a written code of ethics. • A desire for simple, “quick fix” solutions to ethical problems. • An unwillingness to take an ethical stand that may impose financial costs.

  9. Danger Signs (cont.) • Consideration of ethics solely as a legal issue or a public relations tool • Lack of clear procedures for handling ethical problems. • Responding to the demands of shareholders at the expense of other constituencies

  10. A Process for Ethical Decision Making Figure 5.1

  11. Ethical Decision Making Making ethical decisions takes: • Moral awareness • realizing the issue has ethical implications • Moral judgment • knowing what actions are morally defensible • Moral character • the strength and persistence to act in accordance with your ethics despite the challenges

  12. The Business Costs of Ethical Failure Figure 5.2

  13. Pyramid of Global Corporate SocialResponsibility and Performance Figure 5.3

  14. Ecocentric Management • Ecocentric management • Goal is the creation of sustainable economic development and improvement of quality of life worldwide for all organizational stakeholders.

  15. Ecocentric Management • Life-cycle analysis (LCA) • A process of analyzing all inputs and outputs, though the entire “cradle-to-grave” life of a product, to determine total environmental impact

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