Business Ethics: Decision Making for Personal Integrity & Social Responsibility 5th Edition by Laura

The Sarbanes-Oxley Act created a dramatic and vast new layer of legal compliance issues.


Compliance?  Is compliance with the law all that is required to behave ethically?


*Reference: “Reality Check - Transparency International: Perceptions of Foreign Bribery by Sector”*
 
*Chapter Objective 6 Addressed Below*
 
Example: Consider one law that has significant impact of business decision making: the Americans with Disability Act. This law requires employers to make reasonable accommodations for employees with disabilities. But what counts as a disability and what counts as a reasonable accommodation?  Over the years, claims have been made that relevant disabilities include obesity, depression, dyslexia, arthritis, hearing loss, high blood pressure, facial scars, and the fear of heights.  Whether or not such conditions are covered under the law will depend on a number of factors, including how severe the illness is and how it affects the employee’s ability to work.  Imagine that you are a corporate human resource manager and an employee asks that you make reasonable accommodations for her allergy.  How would you decide if allergies and hay-fever are disabilities under the Americans with Disabilities Act? 
 
Rules versus case law: The law offers general rules that get specified in case law.  Most of the laws that concern business are based on past cases that establish legal precedents.  There is no unambiguous answer to the conscientious business manager who wishes simply to obey the law.
 
Some theories of corporate social responsibility suggest that if a corporate manager is told that she has a responsibility to maximize profits within the law, a competent manager will go to her corporate attorneys and tax accountants to ask what the law allows. Most cases of corporate scandal mentioned at the start of the chapter involved attorneys and accountants who advised their clients that what they were doing could be defended in court.
 
It would seem a manager has a responsibility to “push the envelope” of legality in pursuit of profits. Because the law is ambiguous, because in many cases it simply is not clear what the law requires, business managers will often face decisions that will rely on their ethical judgments. 
 
Responsible decision-making requires that we do step back to reflect upon and consciously choose the values by which we make decisions.
 
** Teaching Note: This would be an appropriate point to delve more deeply into the contrast between ethics and law. Take any well-known business law case, describe the factual background, and then ask students to take the point of view of those who argue that the social responsibility of business is to maximize profit within the law.  From that perspective, before the outcome of the legal case is known, what ought the business manager do?   Then have students read the judicial decision and examine whether they could have known what the law required before the decisions was made.
 
*Chapter Objective 7 Addressed Below*
 
Ethics as Practical Reason:
 
Practical Reason: We have described ethics as practical and normative, having to do with our actions, choices, decisions and reasoning about how we should act.
 
Ethics is therefore a vital element of practical reasoning and is distinguished from theoretical reasoning. 
 
Theoretical reasoning is the pursuit of truth, which is the highest standard for what we should believe.
 
The Scientific Method.  According to this tradition, science is the great arbiter of truth. The scientific method can be thought of as the answer to the fundamental questions of theoretical reason: What should we believe?


The question arises, is there a comparable methodology or procedure for deciding what we should do and how we should act?


There are guidelines that can provide direction and criteria for decisions that are more or less reasonable and responsible. Ethical theories are patterns of thinking, or methodologies, to help us decide what to do.


Practical reason is reasoning about what we should do. It involves walking through a series of steps in making a decision about what to do, in order to make a reasonable decision.


 
Discussion of Opening Decision Point
Wells Fargo: Individual  Misconduct, of Failure of Culture ?
The Wells Fargo case provides an opportunity to examine individual decision making within  an institutional context.  Explicit institutional policies and practices such as compensation schemes, performance bonuses, and sales targets, or more subtle institutional practices such as “eight is great” slogans, can influence how individuals make decisions.  A helpful class exercise is to ask students to reflect on what motivations they believe lead to decisions at each level of employment: entry-level, branch managers, senior executives, board members.