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Business Ethics

Business Ethics. misbahuddin azzuhri. Ethical Issues & Dilemmas in Business. Business Ethics. Justice as an Objective. Distributive justice-an evaluation of the outcomes or results of a business relationship

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Business Ethics

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  1. Business Ethics misbahuddin azzuhri

  2. Ethical Issues & Dilemmasin Business Business Ethics

  3. Justice as an Objective • Distributive justice-an evaluation of the outcomes or results of a business relationship • Procedural justice-based on the processes and activities that produce the outcomes or results • Interactional justice-based on an evaluation of the communication processes used in business relationships (often based on the accuracy of information provided)

  4. Ethical Issues are... • problems, situations, or opportunities requiring an individual to choose among actions that may be evaluated as right or wrong, ethical or unethical • ethical issues arise because of: • conflict among personal/organizational values • conflicts with societal values

  5. What do you see as some of the causes of unethical behavior?

  6. Influences on Ethical Behavior... • personal values • attitudes/behaviors of supervisor • attitudes/behaviors of senior management • internal drive to succeed • performance pressures • no threat of punishment • friends/coworkers

  7. Causes of Unethical Behavior... • meeting overly aggressive financial or business objectives • meeting schedule pressures • helping the organization survive • rationalizing that others do it • resisting competitive threats • saving jobs

  8. Classification of Ethical Issues... • conflict of interest • honesty & fairness • communications issues • organizational relationships

  9. Conflict of Interest... • exists when an individual must choose whether to advance his or her own personal interests, those of the organization, or some other group • must be able to separate personal interests from business dealings • bribery is a significant concern

  10. Honesty & Fairness • honesty relates to truthfulness, integrity & trustworthiness • fairness related to being just, equitable & impartial • breaking or bending laws violates trust • business should not be played as a “game” • lack of rules & poor enforcement leads to unethical behavior

  11. Communications... • issues involved relate to advertising, product safety, pollution, & employee work conditions • lying is a major ethical issue with internal & external communications • false advertising relates to: • exaggerated claims • concealed facts & ambiguous statements • lying

  12. Organizational Relationships... • relate to behavior of organizational members toward customers, suppliers, subordinates, superiors, peers & others • plagiarism is one ethical issue of concern to organizations

  13. Ethical Issues Related to Ownership... • owners have an obligation to society as well as their employees & customers • minimize pollution • compensate workers fairly • produce safe products • must be sensitive to legal & ethical risks of their industry & region

  14. Financial Responsibilities... • reporting & use of the companies finances • pricing products/services fairly • avoiding any antitrust activities • price fixing • sensitivity to socially responsible investing

  15. Employees & Management Concerns... • employee theft, sabotage & competitive intelligence • fear of layoffs • salary plateaus • upward mobility • discrimination • privacy & data access • health & safety

  16. Consumer & Marketing Issues... • Must consider consumer feedback • safety • environmental (can lead to boycotts) • maximize positive publicity & avoid negative

  17. Venn Diagram for Ethical Decision Making • Area 3: Legal and ethical, but not profitable. Find ways to seek profitability • Area 2a: Profitable and legal. Proceed cautiously • Area 2b: Profitable and ethical. Probably legal too. Proceed cautiously • Area 1: Profitable, legal, ethical. Go for it! Ethical Dilemmas 2b 3 1 2a

  18. That’s All Misbahuddin Azzuhri

  19. Case Discussion • Case 1: Wal-Mart: The Challenge of Managing Relationships with Stakeholders • After Class Discussion please submit the results according to your group opinion

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