Why Ethics Matter?
- Whenever you think about the behavior you
expect of yourself in your personal life and as
a professional, you are engaging in a
philosophical dialogue with yourself to
establish the standards of behavior you
choose to uphold, that is, your ethics - It is always important to consider how
stakeholders are impacted one way or
another by your in order to make the right
decision
Business Ethics
- Business ethics guides the conduct by which companies and their agents abide by the law and respect the rights of their stakeholders, particularly their customers, clients, employees, and the surrounding community and
environment. Ethical business conduct permits us to sleep well at night. - This means that we treat others with fairness and dignity, including in our commercial transactions.
Personal Integrity
- Acting with integrity means we adhere
strongly to a code of ethics, so it implies
trustworthiness and incorruptibility. - Being a professional of integrity means
consistently striving to be the best person
you can be in all your interactions with
others. It means you practice what you
preach, walk the talk, and do what you
believe is right based upon reason
Benefits of Integrity in Business
1) Successful corporate leaders and the companies they represent will take pride in their enterprise if they engage in business with honesty and fair play by treating customers, clients, employees, and all those affected by a firm with dignity and respect is ethical
2) Laudable business practices serve the long-term interests of corporations, because customers, clients, employees, and society at large will much more willingly patronize
a business and work hard on its behalf if that business is perceived as caring about the community it serves
3) A firm with a track record that gives evidence of honest business practice will
continue to attract long-term customers and employees
Ethical Compliance
- Compliance in terms of business ethics generally
refers to the extent to which a company conducts its
business operations in accordance with applicable
regulations, statutes, and laws. Yet this represents
only a baseline minimum. Ethical observance builds
on this baseline and reveals the principles of an
individual business leader or a specific organization. - Ethical acts are generally considered voluntary and
personal—often based on our perception of or stand
on right and wrong.
Legal Compliance
The law is needed to establish and maintain a
functioning society. Without it, our society would be in
chaos. Compliance with these legal standards is
strictly mandatory: If we violate these standards, we
are subject to punishment as established by the law.
Utilitarianism: The Greatest Good for the Greatest
Number
The first normative approach (by Mill/Bentham) is to examine the ends, or consequences, a decision produces in order to evaluate whether those ends are ethical.
- Utilitarianism suggests that an ethical action is one whose consequence achieves the greatest good for the greatest number of people. So, if we want to make an ethical decision, we should ask ourselves who is helped and who
is harmed by it. - Focusing on consequences in this way generally does not require us to take into account the means of achieving that particular end, however.
The Role of Utilitarianism in Contemporary
Business
- Utilitarianism in business can lead to a bottom-line mentality in which decisions are based on achieving the greatest good for the organization as it pertains to the greatest number of stakeholders, including shareholders and all others affected by the actions of the organization
- Utilitarianism is used frequently when business leaders make critical decisions about things like expansion, store closings, hiring, and layoffs. They do not necessarily refer to a “utilitarian calculus,” but whenever they take stock of what
is to be gained and what might be lost in any significant decision (e.g., in a costbenefit analysis), they make a utilitarian determination.
Drawbacks of Utilitarianism
1) The outcome is the determining factor, not the intent of the actors or whether people are treated humanely
2) A simple cost-benefits analysis is not a utilitarian calculus unless it includes consideration of all stakeholders and a full accounting of externalities, worker preferences, potentially coercive actions related to customers, or community and environmental effects.
Deontology: Ethics as Duty (by Immanuel Kant)
Deontology implies that each of us owes certain duties toward others:
1) We must act on the basis of goodwill rather than purely on self-interested motives that benefit ourselves at the expense of others
2) We must never treat others as means toward ends benefitting ourselves without consideration of them also as ends in themselves
The Role of Deontology: Ethics of Duty in Contemporary Business
- Kant would judge a corporate act to be ethical if it benefitted others at the same time it benefitted company leadership and stockholders, and if it did not place their interests above those of other stakeholders.
- Kant sees people as ends in themselves and not as “living tools” or human resources.
- Although the qualitative or humanizing element of Kantian ethics has broad appeal, it runs into limitations in an actual business setting, because most companies do not adhere to strict Kantian theories, because they look to the outcome of their decisions rather than focusing on motives or intentions
Whistleblowing
- The act of whistleblowing—going to an official government agency and disclosing an employer’s violation of the law—is different from everyday criticism.
- In fact, whistleblowing is largely viewed as a public service because it helps society reduce bad workplace behavior. Being a whistleblower is not easy, however, and someone inclined to act as one should expect many hurdles. If a whistleblower’s identity becomes known, his or her
revelations may amount to career suicide.
When to blow the whistle?
Whistleblowing should be done with an
appropriate motive—to get the company to
comply with the law or to protect potential
victims
