Ethics

Ethics is the discipline that examines one’s moral standards or the moral standards of a
society. It asks how these standards apply to our lives and whether these standards are
reasonable or unreasonable – that is whether they are supported by good reasons or poor
ones. So a person start to do ethics when he or she takes the moral standards absorbed
from family, church, and friends and asks:
• What do these standards imply for the situations in which
I find myself?
• Do these standards really make sense?
• What are the reasons for or against these standards?
• Why should I continue to believe in them?
• What can be said in their favor and what can be said
against them?
• Are they really reasonable for me to hold?
• Are their implications in this or that particular situations
reasonable?

Case study
• Several years ago, B.F. Goodrich, a manufacturer of vehicle parts, won a
military contract to design, test, and manufacture brakes for the A7D, a new
airplane the air force was designing.
• To conserve weight, Goodrich guaranteed that its compact brake would
weigh no more than 106 pounds, contain no more than four small braking
disk or “ rotors” and stop aircraft within a certain distance.
• Vandivier, a Goodrich employee was given the job of working with Goodrich
engineers to write up the report of the test run on the brake, which the
government was unlikely to question and even less likely to repeat.
• Unfortunately, when the small brake was tested, the brake linings on the
rotors repeatedly” disintegrated”.
• His superiors told him that “ regardless of what brake does on the tests we
are going to qualify it”.

ANALYSIS OF THE CASE

• One has the obligation to tell the truth.

• Personal and financial obligation towards the family
• Because the company, not Vandivier, would be held accountable, did the
company have the moral right to make the final decision about the report,
instead of Vandivier, who was a lower employee ?
• Does one have a moral obligation to do something that will make no
difference?
 Values
• A value represent the basic conviction that a specific mode of conduct or end
state of existence is personally or socially preferable to an opposite or
converse mode of conduct or end state of existence.
• Value have two attributes . The first known as content attribute. This merely
states the conduct or goal is important. The intensity attribute specifies just
how important it is. If we rank a person’s values in terms of their intensity,
we get the strength of that person’s value system.
• Values can be moral, immoral or amoral, depending upon whether they
conform to, go against, or are indifferent towards certain norms of morality.
But ethics represent only moral values .

Business Ethics

• Business ethics is a study of moral standards and how these apply to the
systems and organizations through which modern societies produce and
distribute goods and services, and to the people who work within these
organizations.
• Business Ethics, in other words, is a form of applied ethics
• It includes not only the analysis of moral norms and moral values, but also
attempts to apply the conclusions of this analysis to the assortment of
institutions, technologies, transactions, activities, and pursuit that we call
business.

Unique Ethical Dilemmas faced by the Multinational Corporations

• The fact that MNCs operate in more than one country produces ethical
dilemmas for their managers that manufactures of firms limited to a single
country do not face.
• MNCs transfers raw materials, goods, and capital among its plants in
different countries at terms that enable it to escape taxes and fiscal
obligations that companies limited to a single nation must bear. Managers of
a multinational often are faced with the choice of whether they will escape
from carrying the share of the tax burden that a local regime believes is
morally just.
• Managers are often faced with the dilemma of choosing between the benefits
that both the company and its host country can derive from a product or
technology transfer and the risks and hazards that such transfers can
produce.
• Operating in different nations , facing different national standards , it is
often faced with the quandary of deciding which of these norms and
standards it should implement in its many operations.