Ethical business practice is a noble goal to which virtually all firms aspire.

I. The ethical conduct of employers.

 A. Employees question the ethics of many of their managers today.

 B. Only one third of employees feel comfortable reporting ethical misconduct.  There are three primary reasons employees do not report actual observed misconduct.

  1. Believed the organization would not respond.

  2. Perceived lack of anonymous and confidential means of reporting.

  3. Fear of retaliation from management.     

 C. Ethical misconduct by competitors causes the free marketplace to be undermined, expectations are destroyed, and trust is eliminated.

 D. Your ethical misconduct may very well cause you to be viewed as unreliable and self-centered, thus eventually isolating you from upstanding business practitioners.

II. Defining business ethics.

 A. Business morality is what business ethics is about.

  1. The term “ethics” most often refers to a field of inquiry, or discipline, in which matters of right and wrong, good and evil, virtue and vice, are systematically examined.

  2. The term “morality” is most often used to refer not to a discipline but to patterns of behavior common to everyday life. 

 B. The phrases “corporate social responsibility” and “the social responsibility of business” are not synonymous with business ethics.

  1. They imply business ethics deal exclusively with relationships between business organizations and their external constituencies.

  2. They do not include interaction with internal constituencies and other ethical issues.

III. There are three levels of inquiry to business ethics:

 A. At the individual level, the concern is that the values by which self-interest and other motives are balanced with concern for fairness and the common good, both inside and outside of a company.

 B. At the organization level, the concern is for the strength of the group conscience that every company has as it pursues its economic objectives.

 C. At the business system level, the concern is for the pattern of social, political, and economic forces that drives individuals and businesses.

IV. There are three views of decision making for the business communicator and all others who make business decisions.

 A. A moral point of view.

  1. Helps individuals establish a willingness to seek out and act on reasons.

  2. Requires individuals to act impartially.

  3. Under this view, the decisions to be made are not especially clear and most often decision makers do not have adequate information.

 B. An economic point of view.

  1. Allocates resources based on the forces of supply and demand.

  2. Incorporates assumptions about the free market, such as honesty, theft, and fraud into decisions.

  3. Stresses that companies are not merely abstract economic entities, but large-scale organizations that involve human beings and must operate in a complex environment.

 C. A legal point of view.

  1. Helps business activity stay in line with the extensive system of laws which govern our nation.

  2. Ignores a number of realities involving the law and decision making.

a. The law is inappropriate for regulating certain aspects of
Business activity; not everything immoral is illegal. 

   b. The law if often too slow to develop in new areas of concern.

   c. The law employs moral concepts which are not precisely defined, making it difficult to make decisions without considering morality.

   d. The law is often unsettled or in evolution on many issues.

   e. The law does not provide specific guidance in all possible instances.

   f. The law is generally seen as an inefficient and expensive instrument.

 D. An integrated approach.

  1. Many business ethicists advocate a decision-making process that integrates all three viewpoints.

  2. In cases where neither the issue at hand nor the answer is not clear, some ethicists stress the use of open dialogue with the stakeholders to make better decisions.

V. A few basic concepts may help us to understand the nature of moral judgments:

 A. Normative judgments are claims that state or imply that something is good or bad, right or wrong, better or worse.

 B. Moral norms are standards of behavior that require, prohibit, or allow certain kinds of behavior.

 C. Moral principles are much more general concepts used to evaluate both group and individual behavior.

VI. Distinguishing characteristics of moral principles from other standards.

 A. They have serious consequences to human well-being.

 B. Their validity rests on the adequacy of the reasons which are used to support and justify them.

 C. They override self-interest to accomplish things for the greater good of society or people at large.

 D. They are based on impartial considerations.

VII. Four resources are available to every business communicator who is trying to make ethical decisions.

 A. Observations are descriptive statements that rely on correct presentations of facts, and can usually be verified by more research.

  1. Their usefulness can be evaluated by the degree of objectivity they contain.

  2. A statement qualifies as an observation if contrary evidence can be disproved.

  3. Unlike assumptions, observations are usually specific and empirical in nature.

 B. Assumptions are reflective statements that rely on culture, religion, social, and personal history.

  1. Their theoretical roots are in our attitudinal system.

  2. They can be evaluated by criteria such as relevance, consistency, and inclusiveness.

 C. Value judgments are normative statements that rely on assumptions and make the connection between a proposal and an observation.

  1. They cannot be verified by empirical research.

  2. They can be evaluated by different ethical traditions.

 D. Proposals are prescriptive statements that can be evaluated by examining supporting reasons.

VIII. Moral judgments seem to depend on decision makers having and using four separate capacities.

 A. Ethical sensibility is reflected in your capacity to impose ethical order on a situation.  A person lacking in ethical sensibility is vulnerable to acting in ways that are improper.

 B. Ethical reasoning involves careful reasoning about a situation to determine what kind of ethical problem is present.  Ethical reasoning then offers opportunities for solution.

 C. Ethical conduct requires people to act upon the ethical issues they have identified and examined.  This can also be described as moral courage. \

 D. Ethical leadership calls for all levels of the corporate ladder to maintain high levels of integrity.  This concept stresses that the moral education of those beneath you in an organization depends on your willingness to engage in and reward ethical behavior.

IX. A formal statement of ethical principles is the most important means of establishing moral leadership in a business organization.

 A. A written statement of ethics makes a company’s expectations more concrete.

 B. There are three predominant types of ethical statements.

  1. Corporate code of ethics.

  2. Values statement.

  3. Corporate credos.  Ethics codes help promote tolerance of diverse practices and customers while doing business overseas.

 C. Many values, along with the roles and objectives that managers must follow, are in competition with one another.  Managers must respond to these conflicts with caution, sensitivity, and a sense of fairness to everyone concerned.

 D. There are seven imperatives for managers to follow in writing and living out the principles of a corporate code of ethics.

  1. Write it.  A written document helps to guide the values of the firm and also signals to everyone that the company is serious about its ethical values.

  2. Tailor it.  The process places special emphasis on common issues and allows a company to address those matters which it regards as especially important.

  3. Communicate it.  This continuing process assures all stakeholders are aware of and understand the behavior that a company expects of them.

  4. Promote it.  The ethics document should be promoted through as many publications, events, and channels as possible.

  5. Revise it.  This process will help to keep the document current and reflecting changing conditions.

  6. Live it.  Members must follow the firm’s values on a daily basis; they should be rewarded for these positive actions by managers.

  7. Enforce/Reinforce it.  Managers must penalize those employees who refuse to live by the principles.

X. The “Front Page” test.

 A. Here managers ask themselves the simple question, “Would you be pleased if the policies in your organization, or the behavior of your employees, were to appear in a story on the front page of a major newspaper?”
 
 B. This test helps managers to determine if a firm’s policies or actions are fundamentally sound.

 Ethical business practice is a noble goal to which virtually all firms aspire.

I. The ethical conduct of employers.

 A. Employees question the ethics of many of their managers today.

 B. Only one third of employees feel comfortable reporting ethical misconduct.  There are three primary reasons employees do not report actual observed misconduct.

  1. Believed the organization would not respond.

  2. Perceived lack of anonymous and confidential means of reporting.

  3. Fear of retaliation from management.     

 C. Ethical misconduct by competitors causes the free marketplace to be undermined, expectations are destroyed, and trust is eliminated.

 D. Your ethical misconduct may very well cause you to be viewed as unreliable and self-centered, thus eventually isolating you from upstanding business practitioners.

II. Defining business ethics.

 A. Business morality is what business ethics is about.

  1. The term “ethics” most often refers to a field of inquiry, or discipline, in which matters of right and wrong, good and evil, virtue and vice, are systematically examined.

  2. The term “morality” is most often used to refer not to a discipline but to patterns of behavior common to everyday life. 

 B. The phrases “corporate social responsibility” and “the social responsibility of business” are not synonymous with business ethics.

  1. They imply business ethics deal exclusively with relationships between business organizations and their external constituencies.

  2. They do not include interaction with internal constituencies and other ethical issues.

III. There are three levels of inquiry to business ethics:

 A. At the individual level, the concern is that the values by which self-interest and other motives are balanced with concern for fairness and the common good, both inside and outside of a company.

 B. At the organization level, the concern is for the strength of the group conscience that every company has as it pursues its economic objectives.

 C. At the business system level, the concern is for the pattern of social, political, and economic forces that drives individuals and businesses.

IV. There are three views of decision making for the business communicator and all others who make business decisions.

 A. A moral point of view.

  1. Helps individuals establish a willingness to seek out and act on reasons.

  2. Requires individuals to act impartially.

  3. Under this view, the decisions to be made are not especially clear and most often decision makers do not have adequate information.

 B. An economic point of view.

  1. Allocates resources based on the forces of supply and demand.

  2. Incorporates assumptions about the free market, such as honesty, theft, and fraud into decisions.

  3. Stresses that companies are not merely abstract economic entities, but large-scale organizations that involve human beings and must operate in a complex environment.

 C. A legal point of view.

  1. Helps business activity stay in line with the extensive system of laws which govern our nation.

  2. Ignores a number of realities involving the law and decision making.

a. The law is inappropriate for regulating certain aspects of
Business activity; not everything immoral is illegal. 

   b. The law if often too slow to develop in new areas of concern.

   c. The law employs moral concepts which are not precisely defined, making it difficult to make decisions without considering morality.

   d. The law is often unsettled or in evolution on many issues.

   e. The law does not provide specific guidance in all possible instances.

   f. The law is generally seen as an inefficient and expensive instrument.

 D. An integrated approach.

  1. Many business ethicists advocate a decision-making process that integrates all three viewpoints.

  2. In cases where neither the issue at hand nor the answer is not clear, some ethicists stress the use of open dialogue with the stakeholders to make better decisions.

V. A few basic concepts may help us to understand the nature of moral judgments:

 A. Normative judgments are claims that state or imply that something is good or bad, right or wrong, better or worse.

 B. Moral norms are standards of behavior that require, prohibit, or allow certain kinds of behavior.

 C. Moral principles are much more general concepts used to evaluate both group and individual behavior.

VI. Distinguishing characteristics of moral principles from other standards.

 A. They have serious consequences to human well-being.

 B. Their validity rests on the adequacy of the reasons which are used to support and justify them.

 C. They override self-interest to accomplish things for the greater good of society or people at large.

 D. They are based on impartial considerations.

VII. Four resources are available to every business communicator who is trying to make ethical decisions.

 A. Observations are descriptive statements that rely on correct presentations of facts, and can usually be verified by more research.

  1. Their usefulness can be evaluated by the degree of objectivity they contain.

  2. A statement qualifies as an observation if contrary evidence can be disproved.

  3. Unlike assumptions, observations are usually specific and empirical in nature.

 B. Assumptions are reflective statements that rely on culture, religion, social, and personal history.

  1. Their theoretical roots are in our attitudinal system.

  2. They can be evaluated by criteria such as relevance, consistency, and inclusiveness.

 C. Value judgments are normative statements that rely on assumptions and make the connection between a proposal and an observation.

  1. They cannot be verified by empirical research.

  2. They can be evaluated by different ethical traditions.

 D. Proposals are prescriptive statements that can be evaluated by examining supporting reasons.

VIII. Moral judgments seem to depend on decision makers having and using four separate capacities.

 A. Ethical sensibility is reflected in your capacity to impose ethical order on a situation.  A person lacking in ethical sensibility is vulnerable to acting in ways that are improper.

 B. Ethical reasoning involves careful reasoning about a situation to determine what kind of ethical problem is present.  Ethical reasoning then offers opportunities for solution.

 C. Ethical conduct requires people to act upon the ethical issues they have identified and examined.  This can also be described as moral courage. \

 D. Ethical leadership calls for all levels of the corporate ladder to maintain high levels of integrity.  This concept stresses that the moral education of those beneath you in an organization depends on your willingness to engage in and reward ethical behavior.

IX. A formal statement of ethical principles is the most important means of establishing moral leadership in a business organization.

 A. A written statement of ethics makes a company’s expectations more concrete.

 B. There are three predominant types of ethical statements.

  1. Corporate code of ethics.

  2. Values statement.

  3. Corporate credos.  Ethics codes help promote tolerance of diverse practices and customers while doing business overseas.

 C. Many values, along with the roles and objectives that managers must follow, are in competition with one another.  Managers must respond to these conflicts with caution, sensitivity, and a sense of fairness to everyone concerned.

 D. There are seven imperatives for managers to follow in writing and living out the principles of a corporate code of ethics.

  1. Write it.  A written document helps to guide the values of the firm and also signals to everyone that the company is serious about its ethical values.

  2. Tailor it.  The process places special emphasis on common issues and allows a company to address those matters which it regards as especially important.

  3. Communicate it.  This continuing process assures all stakeholders are aware of and understand the behavior that a company expects of them.

  4. Promote it.  The ethics document should be promoted through as many publications, events, and channels as possible.

  5. Revise it.  This process will help to keep the document current and reflecting changing conditions.

  6. Live it.  Members must follow the firm’s values on a daily basis; they should be rewarded for these positive actions by managers.

  7. Enforce/Reinforce it.  Managers must penalize those employees who refuse to live by the principles.

X. The “Front Page” test.

 A. Here managers ask themselves the simple question, “Would you be pleased if the policies in your organization, or the behavior of your employees, were to appear in a story on the front page of a major newspaper?”
 
 B. This test helps managers to determine if a firm’s policies or actions are fundamentally sound.