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Chapter 2

The document discusses the differences between ethics and other business decisions, noting ethics involves examining how people should act rather than just how they do act. It also explains that while laws provide rules, ethical decisions require further judgment considerations beyond just legal compliance.

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omar maher
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© © All Rights Reserved
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Download as PDF, TXT or read online on Scribd
19 views

Chapter 2

The document discusses the differences between ethics and other business decisions, noting ethics involves examining how people should act rather than just how they do act. It also explains that while laws provide rules, ethical decisions require further judgment considerations beyond just legal compliance.

Uploaded by

omar maher
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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Chapter One:

Ethics and
Business

© McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill LLC.
Business Ethics as Personal Integrity and Social Responsibility 2

Distinguishing ethics from other practical decisions


faced within business involves two approaches.

• Social-scientific approach:

• Normative approach

© McGraw HillEducation.
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Business Ethics as Personal Integrity and Social Responsibility 1

Ethics involves asking an important question


how should we live?

• Philosophers emphasize that, ethics are normative, dealing


with our reasoning about how we should act.

• Social sciences also examine human decision making and


actions, But these sciences are descriptive rather than
normative, They provide an account of how and why people
do act the way they do – they describe.

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Business Ethics as Personal Integrity and Social Responsibility 1

As a normative discipline, ethics seeks an account of


how and why people should act a certain way, rather
than how they do act.

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Business Ethics as Personal Integrity and Social Responsibility 3

Distinguishing ethics from other practical decisions faced within


business involves two approaches.

• Social-scientific approach: Examines the situation and the decision by


exploring the factors that led to one decision rather than another or by
asking why the manager acted in the way that they did.

• Normative approach steps back from the facts to ask:

• What should I do?

• What rights and responsibilities are involved?

• What good will come from this situation?

• Am I being fair, just, virtuous, kind, loyal, trustworthy?


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Business Ethics as Personal Integrity and Social Responsibility 3

Ethics is a normative discipline as it deals with norms.


• Norms: Those standards of appropriate and proper (or "normal")
behavior.
• Norms establish the guidelines or standards for determining:
• what we should do,
• how we should act, and
• what type of person we should be.
• Normative disciplines presuppose some underlying values.
Those beliefs that incline us to act or choose one course of
action rather than another are values.
• Ethical values serve well-being in impartial rather than personal or selfish
ways.

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Distinction Between Values and Ethics
Values are the underlying beliefs that cause us to act or to
decide one way rather than another.
• Many different types of values can be recognized.
• Individuals have their own personal values and institutions also have
values—shown in the company’s culture.
• An individual’s or a corporation’s set of values may lead to either ethical or
unethical results.
• One way to distinguish values is in terms of the ends or goals they serve.

Ethical values serve the ends of human well-being.


• Those properties of life that contribute to human well-being and a life
well lived.

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Making the Case for Business Ethics
Separation thesis: Ordinary ethical standards should be kept
separate from, and not be used to judge, business decisions
because business has its own standards of good and bad.
• Remains common in business circles.
• Holds that business ought to be governed by some ethics and some
values.
• Psychological egoism implies that all human actions are selfish and
motivated by self-interest.
Decision makers should consider the impact of decisions on a
wide range of stakeholders.
• A business stakeholder is anyone who affects or is affected by decisions
made within the firm, for better or worse.

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Ethics and the Law 1

Deciding what one should do in business does require


consideration of what the law requires, expects, or permits.
Legal norms and ethical norms are not identical.
Is compliance with the law enough to behave ethically?
• Is the law itself ethical?
• The law may prevent harm, but does it promote "good"?
• Only complying with the law may lead to more regulation.
• Laws may not be in place for new situations.
• Laws may be ambiguous.

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Ethics and the Law 2

Ethical considerations demonstrate that business cannot avoid


making ethical judgments, even if it is fully committed to
obeying the law.
Many corporations establish ethics programs and hire ethics
officers who are responsible for managing corporate ethics
programs.
Laws offer general rules clarified by legal precedent.
• There is no unambiguous answer for those wishing only to obey the law.

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Ethics and the Law 3

Risk assessment is a process to identify potential events that


may affect the entity and manage risk to be within its risk
appetite.
• To provide reasonable assurance regarding the achievement of entity
objectives.
• When the risks involve potential harms and benefits to a variety of
stakeholders, it is a judgment that involves ethics as well.
• Business must take ethics into account and integrate ethics into its
organizational structure.
• But what is ethics?

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Ethics and Business 3

No snowflake in an avalanche ever feels responsible.


Voltaire 1694 to 1778

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©McGraw-Hill

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