®
Instructor’s Guide
BUSINESS ETHICS IN THE 21st CENTURY INTRODUCTION Business ethics involve decision-making that is at the core of the art of management. Instilling company ethics is an essential part of leadership. It affects how standards are established, how you assign people, how you communicate with your employees, how you audit, report, and enforce standards. Business ethics reinforce organizational integrity. In our increasingly deregulated business environment, business ethics become more important than ever. The business community, perhaps more than any other, will be the one to set these standards. Ethics and business cannot be separated, just as you cannot separate business from life.
PROGRAM OBJECTIVES The goal of this program is to define ethics, examine how businesses and organizations face ethical dilemmas, and to understand why ethics matter. After watching this video, viewers will understand the difference between a moral temptation and an ethical dilemma, and they will examine core moral values that matter in the global marketplace. Viewers will also be presented with Resolution Principles for solving ethical dilemmas. Perhaps most important of all, viewers will be challenged to define their own values in a business environment.
®
Copyright © 2000 Meridian Education Corporation® • www.meridianeducation.com • 1-800-727-5507
BUSINESS ETHICS IN THE 21st CENTURY
INSTRUCTOR’S GUIDE
PRE-VIEWING DISCUSSION QUESTIONS 1. Do ethics matter in business? 2. In the global economy, do business ethics put us at a competitive advantage? 3. Have our ethical values changed? If so, how? 4. Think of an ethical decision from your personal life. How did you handle it? What did you learn? 5. State three moral values you think are essential in your personal life. 6. State three moral values you think are essential in professional life.
POST-VIEWING DISCUSSION QUESTIONS Q: What is the difference between a moral temptation and an ethical dilemma? A: A temptation is a right vs. wrong situation. An ethical dilemma is a right vs. right situation. Q: Two common resolution principles were put forth by two very different individuals. Name the resolution principles and the philosophers who articulated them. A: Ends Based (John Stuart Mill) and Rules Based (Immanuel Kant) Q: Do business ethics pay? A: In the short term, business ethics can cost a company money. But in the long term, business ethics pay off with employee commitment and loyalty, customer satisfaction, and organizational efficiency and coherence. Q: Name three ethical dilemmas businesses face in the 21st century. A: Genetic engineering, animal rights, Internet privacy.
®
Copyright © 2000 Meridian Education Corporation® • www.meridianeducation.com • 1-800-727-5507
2
BUSINESS ETHICS IN THE 21st CENTURY
INSTRUCTOR’S GUIDE
DEFINING ETHICS The word “ethics” comes from the Greek "ethos," meaning custom or character. Today we use ethics to mean principles of conduct. The study of ethics is the study of moral duty. Where law is imposed by society, ethics involves individual responsibility. Ethics is self-imposed law. Aristotle saw ethical behavior as a Golden Mean. Courage was a Golden Mean between cowardice and rashness. CASE STUDY ONE: Making A Decision To make ethical decisions, we need to define and identify our values. Ethical decisions are often hard choices involving thought and practice. Let's look at a case study. Fred has a dilemma. There is an important opening in customer relations, and Carl and Luis are both good candidates. Luis has been there longer and knows more about the business, but the customers seem to feel more comfortable with Carl. Luis has earned the promotion, but Fred feels the company may be better off with Carl. What would you do? The answer to Fred's ethical dilemma is easy. Give Luis the job. What if we must choose between two right answers: the health of the company, or Luis's rights as a worker? That's what creates a dilemma. Two ways to go. Both of them, in some sense, right. Core Moral Values Are there any universal or core values that guide business ethics? Ethical decisions involve deep thought and hard choices. To make such choices, we need to define and identify our values. A recent survey on values by the Institute for Global Ethics asked respondents from 40 countries to rank a list of values as most importance to daily life. At the top of the list: truth, compassion, and responsibility. Not all groups rated these core values equally. Those with a business orientation were more likely to choose fairness as a core value. Those with a religious orientation were more apt to choose compassion. The world's major religions have long had written codes of Universal Core Values. These include provisions against killing, lying and stealing, and tenets advocating respect for parents and children. Organizations have written Codes of Conduct to spell out Core Moral Values. The West Point Honor Code is short and to the point: A cadet must not lie, cheat, or steal, or tolerate those who do. A Corporate Code of Ethics Business ethics become part of the corporate institution when a code of ethics is not only written down, but enforced. An ethical code should outline corporate responsibilities to shareholders, and also those of shareholders toward the business. For an ethical code to work, it should include clear standards, mutual respect and shared governance. This often means that the company and the workers should design the plan together.
®
Copyright © 2000 Meridian Education Corporation® • www.meridianeducation.com • 1-800-727-5507
3
BUSINESS ETHICS IN THE 21st CENTURY
INSTRUCTOR’S GUIDE
Other key features in any workable code of ethics are accountability and enforcement. Sometimes this calls for an ombudsman, a neutral third party who employees can approach to report ethical violations. Whatever the mechanism, for an ethical code to work, it must be enforced with constant oversight and disciplinary action, when necessary.
CASE STUDY TWO: Resolution Principles "Business Ethics in the 21st Century" discusses two resolution principles: Ends Based and Rules Based. Let's examine a case study that highlights these two approaches: A lifeboat is overflowing with survivors. If someone is not thrown overboard, the lifeboat will sink. What do you do? Mill, with his Ends Based reasoning, would say that one person must be sacrificed for the survival of the group. Kant would counter, based on the principles of Rules Based ethics, that no human life should be sacrificed, no matter what the cause. No one is more valuable than anyone else, The passengers have a duty to stay together. That was the categorical imperative. If they all sink, they sink as moral human beings, not animals that turn on each other. Kant says, "Stick to your principles and let the chips fall where they may. Individuals should not be sacrificed to higher values." POINT: No matter which of these resolution principles you use, they are both helpful in deciding an ethical dilemma in a reasonable way. Issues to be Faced in the New Century Nuclear proliferation, environmental degradation, the population explosion, the north-south economic gap. More specific issues: arms sales, corruption, genetic engineering, privacy in e-commerce. Business Ethics Nine-Point Checklist 1. Is there an ethical problem? 2. Who is affected? 3. What are the facts? 4. Is it simply right vs. wrong? 5. Is this an ethical dilemma: Right vs. Right? 6. What resolution principles might be applied? 7. What are your options? Is there a third way? 8. What is the best decision? 9. Revisit and/or reflect on that decision. The Issue of Shareholders A large question to ask in business ethics is, "To whom am I responsible?" The short answer would be to the owners, the board of directors, and the stockholders. A larger answer would include your employees, vendors, customers and your community.
®
Copyright © 2000 Meridian Education Corporation® • www.meridianeducation.com • 1-800-727-5507
10789
4
BUSINESS ETHICS IN THE 21st CENTURY
INSTRUCTOR’S GUIDE
CASE STUDY THREE Defining Stakeholders You determine that your business needs to move out of the country in order to survive. As you prepare to leave, you need to identify those who are helped, those who are hurt and to define your ethical responsibilities to all your shareholders. A possible solution: Severance pay for your employees and a grace period for your suppliers and community to adjust. Do Ethics Pay? Do business ethics pay? That is hard to say. In the short term, it must be said, cutting ethical corners can result in short term profits. Many times, individuals must sacrifice when they make the right ethical decision. But in the long run and for the shareholders at large, business ethics can and do pay off. Integrity, social justice and moral leadership is good business — good in themselves and good as a competitive advantage if you take a long-term perspective. Respecting the rights of others results in happier, more just, more efficient business environment. Without business ethics, there may be some short-term nonprofitability. But in the long term, lack of ethics produces fear, paralysis, inefficiencies, lack of direction, and ultimately anarchy.
CONCLUSION Today, business ethics are needed more than ever. With globalization comes not only economic and political changes, but changes in values as well. In the modern world, the sheer scale and power of our systems, their speed and decentralized nature, requires, more than ever, an ethical framework. The wrong ethical decision by a single individual, either in a control room in Chernobyl or the deck of the Exxon Valdes, can cause major problems for our entire planet. An interconnected world needs a common value system to approach an array of common problems. Deregulation is another force that dictates the need for more self-imposed standards that that will preserve the economic and social gains we are striving for. Whether dealing with the environment or immigration, child labor or genetic engineering, we face entirety new ethical issues. As the moral intensity of these debates increases, businesses will be tempted to opt out of the debates. But that is not an option. Instead, businesses must set the agenda and lead efforts to solve these problems.
®
Copyright © 2000 Meridian Education Corporation® • www.meridianeducation.com • 1-800-727-5507
10685
5
