Business Ethics: Decision Making for Personal Integrity & Social Responsibility 5th Edition by Laura
IM Chapter 1:
Ethics and Business
Chapter Objectives
After reading this chapter, you will be able to:
1. Explain three levels at which ethical decisions get made in business.
2. Explain the nature of business ethics as an academic discipline.
3. Explain why ethics is important in the business environment.
4. Explain why ethical responsibilities go beyond legal compliance.
5. Distinguish the ethics of personal integrity from the ethics of social responsibility.
6. Distinguish ethical norms and values from other business-related norms and values.
7. Describe ethical decision making as a form of practical reasoning.
Opening Decision Point - Wells Fargo
The Wells Fargo case can be used to introduce a range of topics that will emerge throughout this book. The case involves decision making at a number of levels, from individual entry-level employees (like many of our students), to branch managers, to mid-level management, senior executives, and the board of directors. A good discussion can be generated by asking students to assign responsibility, both in terms of who is at fault (who is accountable?) and what could be one to prevent it from re-occurring (what caused it?).
These discussions can easily lead into the decision-making model that will be introduced late in the chapter. What facts would be helpful to make these judgments of responsibility? What facts would change your decision? Who are the stakeholders involved, ranging from entry-level employees, to customers, to stockholders, to competitors. What stake, exactly, do these groups have in this case? How were they harmed? How, if at all, were their interests represented in the process?
This is also a good case with which to introduce the topics of corporate culture and leadership. How were the decisions made by individuals influenced by the surrounding culture, and how did that culture emerge at Wells Fargo? How free were employees at every level, including senior executives, to diverge from the prevalent culture? How might that institutional culture be changed? Who is responsible for institutional decisions? Which institutional policies and practices enabled this scandal? How might they be changed to avoid a re-occurrence?
Another topic that can be introduced involves professional responsibilities of bankers and financial professionals. This discussion can be helpful in setting the stage for Chapter 5 and the general topic of corporate social responsibility. A discussion of fiduciary duties can introduce several important questions. What responsibilities do managers, perhaps especially senior executives, have to stockholders? How might these responsibilities conflict with their responsibilities as financial professionals?
This case can also introduce the question of government regulation within a market economy. What is the proper role for government agencies, both in terms offsetting standards to prevent misconduct, and in enforcing sanctions after the fact? How does this influence the “free market” system?
Introduction: Getting Comfortable with the Topic
It is not uncommon for students to enter a business ethics class with some degree of doubt, confusion, and apprehension about the topic. This opening chapter aims to relieve those concerns by introducing business ethics as an unavoidable and non-threatening part of business (and life).
The topic is introduced by reviewing some of the past and recent well-known scandals, but also pointing out some well-known examples of commendable corporate ethics. It can be worthwhile to remind students of best case examples as a means to reminding them that business ethics does not assume that only the bad cases deserve attention.
We also remind students that business ethics is not limited to the type of major corporate decisions with dramatic social consequences. At some point every worker, and certainly everyone in a management role, will be faced with an issue that will require ethical decision-making.
This opening section identifies 5 general goals for a business ethics class:
1. Develop the knowledge base and skills needed to identify ethical issues.
2. Understand how and why people behave unethically.
3. Decide how we should act, what we should do, and the type of person we should be as individuals.
4. Create ethical organizations.
5. Think through the social, economic, and political policies that we should support as citizens.
* Reality Check: Psychological Egoism” provides a brief philosophical refutation of a common assumption that underlies much of the skepticism about business ethics, including the separation thesis. That assumption is the view that all human behavior is motivated by selfish interest, otherwise known as “psychological egoism.”
Ethics and Business
Chapter Objectives
After reading this chapter, you will be able to:
1. Explain three levels at which ethical decisions get made in business.
2. Explain the nature of business ethics as an academic discipline.
3. Explain why ethics is important in the business environment.
4. Explain why ethical responsibilities go beyond legal compliance.
5. Distinguish the ethics of personal integrity from the ethics of social responsibility.
6. Distinguish ethical norms and values from other business-related norms and values.
7. Describe ethical decision making as a form of practical reasoning.
Opening Decision Point - Wells Fargo
The Wells Fargo case can be used to introduce a range of topics that will emerge throughout this book. The case involves decision making at a number of levels, from individual entry-level employees (like many of our students), to branch managers, to mid-level management, senior executives, and the board of directors. A good discussion can be generated by asking students to assign responsibility, both in terms of who is at fault (who is accountable?) and what could be one to prevent it from re-occurring (what caused it?).
These discussions can easily lead into the decision-making model that will be introduced late in the chapter. What facts would be helpful to make these judgments of responsibility? What facts would change your decision? Who are the stakeholders involved, ranging from entry-level employees, to customers, to stockholders, to competitors. What stake, exactly, do these groups have in this case? How were they harmed? How, if at all, were their interests represented in the process?
This is also a good case with which to introduce the topics of corporate culture and leadership. How were the decisions made by individuals influenced by the surrounding culture, and how did that culture emerge at Wells Fargo? How free were employees at every level, including senior executives, to diverge from the prevalent culture? How might that institutional culture be changed? Who is responsible for institutional decisions? Which institutional policies and practices enabled this scandal? How might they be changed to avoid a re-occurrence?
Another topic that can be introduced involves professional responsibilities of bankers and financial professionals. This discussion can be helpful in setting the stage for Chapter 5 and the general topic of corporate social responsibility. A discussion of fiduciary duties can introduce several important questions. What responsibilities do managers, perhaps especially senior executives, have to stockholders? How might these responsibilities conflict with their responsibilities as financial professionals?
This case can also introduce the question of government regulation within a market economy. What is the proper role for government agencies, both in terms offsetting standards to prevent misconduct, and in enforcing sanctions after the fact? How does this influence the “free market” system?
Introduction: Getting Comfortable with the Topic
It is not uncommon for students to enter a business ethics class with some degree of doubt, confusion, and apprehension about the topic. This opening chapter aims to relieve those concerns by introducing business ethics as an unavoidable and non-threatening part of business (and life).
The topic is introduced by reviewing some of the past and recent well-known scandals, but also pointing out some well-known examples of commendable corporate ethics. It can be worthwhile to remind students of best case examples as a means to reminding them that business ethics does not assume that only the bad cases deserve attention.
We also remind students that business ethics is not limited to the type of major corporate decisions with dramatic social consequences. At some point every worker, and certainly everyone in a management role, will be faced with an issue that will require ethical decision-making.
This opening section identifies 5 general goals for a business ethics class:
1. Develop the knowledge base and skills needed to identify ethical issues.
2. Understand how and why people behave unethically.
3. Decide how we should act, what we should do, and the type of person we should be as individuals.
4. Create ethical organizations.
5. Think through the social, economic, and political policies that we should support as citizens.
* Reality Check: Psychological Egoism” provides a brief philosophical refutation of a common assumption that underlies much of the skepticism about business ethics, including the separation thesis. That assumption is the view that all human behavior is motivated by selfish interest, otherwise known as “psychological egoism.”