Business Ethics: Ethical Decision Making & Cases 11th Edition Instructor manual

b.     Investors look at the bottom line for profits or the potential for increased stock prices or dividends, and for any potential flaws in the company’s performance, conduct, and financial reports.
c.     Gaining investors’ trust and confidence is vital to sustaining the financial stability of the firm.
E.    Ethics Contributes to Customer Satisfaction
1.     Customer satisfaction is one of the most important factors in successful business strategy.
a.     By focusing on customer satisfaction, a company continually deepens the customer’s dependence on the company, and as the customer’s confidence grows, the firm gains a better understanding of how to serve the customer.
b.     Successful businesses provide an opportunity for customer feedback, which can engage the customer in cooperative problem solving.
2.     Research indicates that a majority of consumers prefer companies that give back to society in a socially responsible manner.
3.     A strong organizational ethical environment usually focuses on the core value of placing customers’ interests first.
a.     An ethical climate that focuses on customers incorporates the interests of all employees, suppliers, and other interested parties in decisions and actions.
F.    Ethics Contributes to Profits
1.     A company cannot nurture and develop an ethical organizational climate unless it has achieved adequate financial performance in terms of profits.
a.     Ethical conduct toward customers builds a strong competitive position that has been shown to positively affect business performance and product innovation.
b.     Research has shown that the world’s most ethical companies tends to outperform other publicly traded companies
c.     Companies perceived by their employees as having a high degree of honesty and integrity have a much higher average total return to shareholders than do companies perceived as having a low degree of honesty and integrity.
2.     Ethics is becoming part of management’s efforts to achieve competitive advantage.

VI. Our Framework for Studying Business Ethics
A.    Part One provides an overview of business ethics and explores the development and importance of this critical business area, as well as the role of various stakeholder groups in social responsibility and corporate governance.
B.    Part Two focuses on ethical issues and the institutionalization of business ethics—such as business issues that create ethical decision making in organizations and the institutionalization of business ethics—and includes both mandatory and voluntary societal concerns.
C.    Part Three explores the ethical decision-making process and then at both individual and organizational factors that influence decisions.
D.    Part Four explores systems and processes associated with implementing business ethics into global strategic planning.
1.     The more you know about how individuals make decisions, the better prepared you will be to cope with difficult ethical decisions.
2.     It is your job to make the final decision in an ethical situation that affects you.  Sometimes that decision may be right; sometimes it may be wrong.
 
DEBATE ISSUE: TAKE A STAND
Have your students split into two teams. One team will argue for the first point, and the other will argue for the opposing view.  The purpose is to get students to realize that there are no easy answers to many of these issues. This issue deals with whether ethical companies are more profitable. Those who argue that ethical businesses are more profitable could point to the different studies showing a positive correlation between ethics and profitability, the goodwill gained from ethical conduct, and the additional customer confidence associated with an ethical company. The opposition might point out that some dishonest companies have gotten away with only small penalties for misconduct and that companies must be more concerned with obtaining profits than spending time worrying about ethics.
“Resolving Ethical Business Challenges” NOTES
The instructor may wish to ask which students see this as an ethical issue and which see it as a legal issue.  Is there a difference of opinion between business and nonbusiness-major students?  The instructor can add additional pressures through providing different scenarios such as assuming that Lael had personally encountered sexual harassment in the past, has financial difficulties and needs this job to pay off student loans, learns that Nikhil is very sick and will soon be leaving the company or that Nikhil’s father condoned his actions, etc.