Lecture 1

Sandhya Tewari
BUSINESS ETHICS
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Ethics:
Whats the Fuss? Whats the Fuss?
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Educational Institutions
have established ethics
codes for their students,
e.g. the U.S. Air Force
Academy:
"We Will Not Lie, Steal Or Cheat, Nor
Tolerate Among Us Anyone Who Does"
-- Which do you think is the harder part:
Line 1 or Line 2? Why?
3
In his best-seller, The Closing of the American
Mind, Allan Bloom says that the eternal conflict
between good and evil has been replaced with Im
okay, youre okay. Students unthinkingly embrace
a blind tolerance in which they consider it moral a blind tolerance in which they consider it moral
never to think they are right because that mean
someone else is wrong.
[Allan Bloom, The Closing of the American Mind,
New York, Simon and Schuster, Inc. 1987]
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Where Do We Start?
Upon What Can We Upon What Can We
Agree?
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Whether we
derive a code of
ethics from
religious beliefs, a
study of history
and literature, or
personal personal
experience and
observation: We
can all agree
upon some basic
values.
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In an issue of Management Accounting,
James Brackner stated: The universities are
responding with an increased emphasis on responding with an increased emphasis on
ethical training for decision making. For the
most part, however, they ignore the teaching
of values. For moral or ethical education to
have meaning there must be agreement on
the values that are considered right.
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Be sure you are
right, then go
ahead. ahead.
Davy Crockett
1786-1836
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A nation or a culture
cannot endure for long
unless it is undergirded
by common values such
as valor, public
spiritedness, respect for spiritedness, respect for
others and for the law; It cannot stand unless it
is populated by people who will act on the
motives superior to their own immediate
interest.
Chuck Colson, Against the Night
9
When the situation
needs improvement,
Gandhi offers
guidance: You must
be the change you
wish to see in the wish to see in the
world.
10
Michael Josephson, in Chapter 1 of
Ethical Issues in the Practice of
Accounting, describes the Ten Universal Accounting, describes the Ten Universal
Values: Honesty, integrity, promise
keeping, fidelity, fairness, caring, respect
for others, responsible citizenship, pursuit
of excellence, and accountability.
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If we want to
produce people who
share the values of a
democratic culture,
they must be taught
those values and not
be left to acquire
them by chance.
Cal Thomas, The
Death of Ethics in
America America
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To sin by silence
when they should
protest makes
cowards of men.
Abraham Lincoln
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To see what is
right and not to
do it is want of
courage.
(Confucius)
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The right way is not
always the popular and
easy way. Standing for
right when it is unpopular
is a true test of moral is a true test of moral
character.
- Margaret Chase
Smith, first woman
elected to both houses of
the U.S. Congress
15
Leadership is a potent
combination of strategy
and character. But if
you must be without you must be without
one, be without
strategy. General H.
Norman Schwarzkopf
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The reputation of a thousand years may be
determined by the conduct of one hour.
Japanese proverb
17
At a Congressional Hearing
on Accounting and Business
Ethics, distinguished
entrepreneur, Truett Cathy,
the Founder of Chick-Fil-A,
quoted Solomon "A good
name is more desirable than
great riches; to be esteemed
is better than silver or gold."
The truth is that fame and
fortune are nothing
compared to personal honor.
18
President
Lincoln
said:
Honor is Honor is
better
than
honors.
19
When evaluating ones goals and
objectives, a vital question must be
asked: What is your highest aspiration?
A. Wealth
B. Fame B. Fame
C. Knowledge
D. Popularity
E. Integrity
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If integrity is second to any of the
alternatives, then it is subject to
sacrifice in situations where a
choice must be made. Such
situations will inevitably occur in situations will inevitably occur in
every persons life.
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Can you make
a difference? a difference?
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The word ethics is derived from the greek word
Ethikos meaning custom or character.
The Concise Oxford Dictionary defines ethics as
the treating of moral questions.
Chambers Dictionary:
Ethics is the code of behaviour considered correct.
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ETHICS
Moral principles or beliefs about what is right or
wrong
Ethics guide managers in their dealings with
stakeholders and others when the best course of
action is unclear. action is unclear.
Managers often experience an ethical dilemma in
choosing between the conflicting interests of
stakeholders.
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VALUES & ATTITUDES
Values
Describe what managers try to achieve through work
and how they think they should behave
Attitudes
Capture managers thoughts and feelings about their Capture managers thoughts and feelings about their
specific jobs and organizations.
Moods and Emotions
Encompass how managers actually feel when they
are managing
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VALUES ARE OF TWO TYPES
Terminal Values:
A personal
conviction about
Instrumental
Values:
A personal
conviction about
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conviction about
life long goals.
Sense of
accomplishment,
self respect &
equality
conviction about
desired mode of
conduct or ways of
behaving.
Being hard
working, capable &
broad minded.
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The terminal and instrumental values that are the
guiding principles in an individuals life are the
Value System of that particular individual.
An individuals value system if often related to
their attitude. Hence to understand the values we their attitude. Hence to understand the values we
must have a better understanding of attitudes.
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WHATS A VALUE SYSTEM?
Value system is a set of consistent ethical values.
Personal
Value
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Value
System
Communal
/Cultural
Value
System
Corporat
e
Value
System
ATTITUDES
Attitudes in simpler terms is a collection of feelings
& beliefs.
Job Satisfaction is collection of feelings and beliefs
that managers have about their current jobs.
Organizational Citizenship Behaviors are behaviors that
are not required of organizational members but that help the are not required of organizational members but that help the
firm in gaining a competitive advantage.
Managers with high satisfaction are more likely perform these
above and beyond the call of duty behaviors.
Managers who are satisfied with their jobs are less likely to
quit.
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ATTITUDES & BELIEF WITH REF. TO
ETHICS
An attitude is simply a predisposition to
approach or avoid an idea, event, person or
object.
Attitudes can change through 3 major
approaches
Cognitive 1. Cognitive
2. Behavioural
3. Social
Attitude can be considered as the sum of belief
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Belief in an Ethical Code are standards of thought.
Beliefs are criteria of thought. They are the ways
an individual expects people to think about given
concept. concept.
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The OLD Ethic Favors
Work
Savings
Responsibility
Competition
The NEW Ethic Favors
Leisure
Debt
Rights
Protection
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Competition
Sex roles
Sacrifice
Equality - Inequality
Wealth accumulation
Absolution
Risk assumption
Efficiency/Productivity
Thrift/Investment
Protection
Unisex's
Self-interest
Equality
Wealth redistribution
Situational
Risk aversion
Quality of life
Consumerism