Chapter 1

1. Chapter 1 An Overview of Business Ethics

2. Why differentiate between rules/policies/law & ethics? • the difference between an ordinary decision & an ethical one is the point where rules no longer serve • values & judgement play a key role in ethics decisions • employees need a “buffer zone” of expected ethical behavior

3. Business ethics... • comprises principles & standards that guide behavior in the world of business • whether a specific behavior is ethical or unethical is often determined by stakeholders • investors • customers • the community • employees • the legal system

4. Ethics & social responsibility have distinct meanings... • social responsibility is the obligation a business assumes to maximize its positive effect while minimizing its negative effect on society • social responsibility consists of the following responsibilities: • economic (satisfy investors) • legal (obey the law) • ethical (expected activities & behaviors) • philanthropic (desired activities & behaviors)

5. Before 1960: Ethics in Business... • theological discussions of ethics emerged • Catholic social ethics included a concern for morality in business, workers’ rights & living wages • Protestants developed ethics courses in their seminaries & schools of theology (also, the Protestant work ethic encouraged frugality & hard work)

6. The 1960s: The Rise of Social Issues in Business... • societal social consciousness emerged • as well as an anti-business sentiment • JFK’s Consumer Bill of Rights ushered in a new era of consumerism • right to safety, to be informed, to choose & to be heard • consumer protection groups fought for consumer protection legislation • Ralph Nader

7. The 1970s: Business Ethics as an Emerging Field... • business professors began to write about social responsibility • philosophers became involved in business ethics • business became more concerned with their public image & addressed ethics more directly • conferences were held & centers developed • issues: bribery, deceptive advertising, price collusion, product safety, & environmental

8. The 1980s: Consolidation • membership in business ethics organizations increased • ethics centers provided: • publications, course, conferences & seminars • firms established ethics committees • the Defense Industry Initiatives emerged & became the foundation for the Federal Sentencing Guidelines for Organizations

9. The 1990s: Institutionalization of Business Ethics... • the Federal Sentencing Guidelines for Organizations set the tone for ethical compliance • took preventative actions against misconduct, a company could avoid or minimize the potential penalties

10. The Federal Sentencing Guidelines for Organizations... • standards & procedures capable of detecting & preventing misconduct • high level oversight • care in delegation of authority • effective communication (training) • systems to monitor, audit & report misconduct • consistent enforcement • continuous improvement

11. 2000 and Beyond... • a move from legally based ethics initiatives to culturally or integrity based programs • realization that business ethics programs are good for business • businesses are working more closely together, globally, to establish standards of acceptable behavior

12. Why study business ethics? • reports of unethical behavior are on the rise • society’s evaluation of right or wrong affects its ability to achieve its business goals • FSGO & stakeholder demands for ethics initiatives • individual ethics is not enough • helps identify ethical issues