Business Ethics: Ethical Decision Making & Cases 11th Edition Instructor manual
CHAPTER 1
The Importance of Business Ethics
SUMMARY
This chapter provides an overview of business ethics. It develops a definition of business ethics and discusses why it has become an important topic in business education. Next, it examines the evolution of business ethics in North America and explores the benefits of ethical decision making in business. Finally, the chapter provides a framework for examining business ethics in this text.
INSTRUCTOR NOTES FOR “AN ETHICAL DILEMMA”
This Ethical Dilemma focuses on salespeople reporting their expense accounts. Sophie had just completed a sales training course stressing the importance of accurately filling out expense vouchers. Yet while filling out her first weekly expense vouchers, Sophie’s mentor Emma encouraged her to pad the expense account. Emma explained the accounting department supervisor was unsympathetic to salespeople and refused to change the expense voucher forms to include a place for tips, making tips an out-of-pocket expense. Emma explained how even though padding violated company policy, it was an accepted practice in the sales department and she was encouraged to do the same by her mentors. Emma showed Sophie how most salespeople use blank cab fare receipts when padding in waiter, bellhop, and skycap tips. Emma then spoke about how the Vice President of Sales never questioned salespeople who went along with the system, but one salesperson was no longer working for the company after accurately reporting expenses. This was Sophie’s first real job out of school and Emma was her mentor. What should Sophie report on her expense account?
Sophie must decide if she should follow policy or follow Emma’s instructions and pad her expense accounts. Should Sophie speak up and voice her concern on this matter? Everyone else seems fine with the arrangement. Why should Sophie have a problem? If Sophie pads her accounts, then she will have to continue padding her accounts for the rest of her employment. Is she willing to do this? If Sophie does not pad her accounts, then all tips will come out of Sophie’s pocket. In addition, her sales manager may ask why her expense account is lower than all the other sales reps’. Sophie’s co-workers may view her as a troublemaker if she speaks up. How do students feel about this issue? Would they report their actual expenses or would they pad their expense accounts?
LECTURE OUTLINE
I. Business Ethics Defined
A. Business ethics is a complicated and controversial topic. Highly visible business ethics issues influence the public’s attitudes toward business and can destroy trust.
1. The field of business ethics concerns questions about whether specific business practices are acceptable.
2. Business ethics is controversial, and there is no universally accepted approach for resolving ethical issues.
3. Values and judgments play a critical role in the making of ethical decisions.
B. Morals refer to a person’s personal philosophies about what is right or wrong.
C. Business ethics comprises organizational principles, values, and norms that may originate from individuals, organizational statements, or from the legal system that primarily guide individual and group behavior in the world of business.
D. Principles are specific and pervasive boundaries for behavior that should not be violated.
E. Values are enduring beliefs and ideals that are socially enforced.
1. Investors, employees, customers, interest groups, the legal system, and the community often determine whether a specific action is right or wrong and ethical or unethical.
F. Some special aspects must be considered when applying ethics to business.
1. Businesses must earn a profit to survive, but these profits should not come from misconduct.
2. To be successful businesses must address the needs and desires of stakeholders.
II. Why Study Business Ethics?
A. A Crisis in Business Ethics
1. Ethical misconduct is a major business concern, and organizations are under greater scrutiny than ever by stakeholders.
2. There is no doubt negative publicity associated with major misconduct lowered the public’s trust in certain business sectors.
3. Decreased trust leads to a reduction in customer satisfaction and customer loyalty, which in turn can negatively impact the firm or industry.
B. Specific Issues
1. Misuse of company resources, abusive behavior, harassment, accounting fraud, conflicts of interest, defective products, bribery, and employee theft are all problems cited as evidence of declining ethical standards in business and in other areas like government or sports. Misconduct can occur in any organization.
The Importance of Business Ethics
SUMMARY
This chapter provides an overview of business ethics. It develops a definition of business ethics and discusses why it has become an important topic in business education. Next, it examines the evolution of business ethics in North America and explores the benefits of ethical decision making in business. Finally, the chapter provides a framework for examining business ethics in this text.
INSTRUCTOR NOTES FOR “AN ETHICAL DILEMMA”
This Ethical Dilemma focuses on salespeople reporting their expense accounts. Sophie had just completed a sales training course stressing the importance of accurately filling out expense vouchers. Yet while filling out her first weekly expense vouchers, Sophie’s mentor Emma encouraged her to pad the expense account. Emma explained the accounting department supervisor was unsympathetic to salespeople and refused to change the expense voucher forms to include a place for tips, making tips an out-of-pocket expense. Emma explained how even though padding violated company policy, it was an accepted practice in the sales department and she was encouraged to do the same by her mentors. Emma showed Sophie how most salespeople use blank cab fare receipts when padding in waiter, bellhop, and skycap tips. Emma then spoke about how the Vice President of Sales never questioned salespeople who went along with the system, but one salesperson was no longer working for the company after accurately reporting expenses. This was Sophie’s first real job out of school and Emma was her mentor. What should Sophie report on her expense account?
Sophie must decide if she should follow policy or follow Emma’s instructions and pad her expense accounts. Should Sophie speak up and voice her concern on this matter? Everyone else seems fine with the arrangement. Why should Sophie have a problem? If Sophie pads her accounts, then she will have to continue padding her accounts for the rest of her employment. Is she willing to do this? If Sophie does not pad her accounts, then all tips will come out of Sophie’s pocket. In addition, her sales manager may ask why her expense account is lower than all the other sales reps’. Sophie’s co-workers may view her as a troublemaker if she speaks up. How do students feel about this issue? Would they report their actual expenses or would they pad their expense accounts?
LECTURE OUTLINE
I. Business Ethics Defined
A. Business ethics is a complicated and controversial topic. Highly visible business ethics issues influence the public’s attitudes toward business and can destroy trust.
1. The field of business ethics concerns questions about whether specific business practices are acceptable.
2. Business ethics is controversial, and there is no universally accepted approach for resolving ethical issues.
3. Values and judgments play a critical role in the making of ethical decisions.
B. Morals refer to a person’s personal philosophies about what is right or wrong.
C. Business ethics comprises organizational principles, values, and norms that may originate from individuals, organizational statements, or from the legal system that primarily guide individual and group behavior in the world of business.
D. Principles are specific and pervasive boundaries for behavior that should not be violated.
E. Values are enduring beliefs and ideals that are socially enforced.
1. Investors, employees, customers, interest groups, the legal system, and the community often determine whether a specific action is right or wrong and ethical or unethical.
F. Some special aspects must be considered when applying ethics to business.
1. Businesses must earn a profit to survive, but these profits should not come from misconduct.
2. To be successful businesses must address the needs and desires of stakeholders.
II. Why Study Business Ethics?
A. A Crisis in Business Ethics
1. Ethical misconduct is a major business concern, and organizations are under greater scrutiny than ever by stakeholders.
2. There is no doubt negative publicity associated with major misconduct lowered the public’s trust in certain business sectors.
3. Decreased trust leads to a reduction in customer satisfaction and customer loyalty, which in turn can negatively impact the firm or industry.
B. Specific Issues
1. Misuse of company resources, abusive behavior, harassment, accounting fraud, conflicts of interest, defective products, bribery, and employee theft are all problems cited as evidence of declining ethical standards in business and in other areas like government or sports. Misconduct can occur in any organization.