Seminar on Business Ethics

Master Program of Global

Business
Dr. Kuo-Cheng Kuo
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Chapter 1:

Business Ethics in a Global

Economy

Part One:

Foundations of Business Ethics

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Seminar on Business Ethics

Textbook:
Ethical Decision Making in Business: A
Managerial Approach
2013 9th edition, Houghton Mifflin.
Author
FraedrichFerrellFerrell,

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Seminar on Business Ethics

Reference book:
Business Ethics : How to Design and
Manage Ethical Organizations
ISBN13:9780470639948428pages
Paperback2012
Author
Denis Collins - Edgewood College

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Syllabus

Introduction of the Course:

While most business ethics books focus
exclusively on a philosophical approach to
individual decision making, Linda Trevino
and Kate Nelson bring together a mix of
theory and practice in Managing Business
Ethics: Straight Talk about How to Do It
Right 9th edition.

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Syllabus

Introduction of the Course:

In this new edition, the dynamic author
team of Linda Trevino, prolific researcher
and Distinguished Professor, and Kate
Nelson, Professor and long time practitioner
of strategic organizational communications
and human resources, equip students with
the pragmatic knowledge they need to
identify and solve ethical dilemmas,
understand their own and others ethical
behavior, and promote ethical behavior in
their organization.

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Syllabus
Introduction of the Course:

Managing Business Ethics is the perfect text

for students entering the workplace, those
seeking to become professionals in training,
communications, compliance, in addition to
chief ethics officers, corporate counsel, heads
of human resources, and senior executives!

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Syllabus
How to learn of this course?
Lecturing, Class Discussion,
Presentation, and Report

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Syllabus
How to score of this course?

Presentation and class discussion 40%

Report 30%
Class attending and attitude 30%

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(The rules of the class)

Attend the class on time

Ask leave beforehand

No eating, no chatting, no drowsing,

and not using mobile phone during
the class

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(The rules of the class)

Cut class three times in a semester will be deemed

giving up the credit of the course.

Those who leave of absence for personal reasons

will give notice to the teacher in advance,
otherwise will prepare authentication from
doctors or the concerned authority.

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 Contacts
1. Email: kuochengkuo@yahoo.com
2. Mobile: 0926-138151
3. Office: (02) 28610511 ext. 35138
4. Research room: Room 926 DaEn
Building 926

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Education

1. University of Edinburgh, Edinburgh,

Scotland, UK
Doctorate, Department of Business Studies
2. Tamkang University, Taiwan
Master of Business Administration, Graduate
School of Management Sciences
3. Management College, National Defense
University, Taipei County, Taiwan
Bachelor of Financial Management

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Experience
1. Associate Professor, Chinese
Culture University
2. Assistant Professor, Chinese
Culture University
3. Director, Comptroller Division,
Army Command Headquarters
4. Vice Dean, Management College,
National Defense University
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Experience

5. Director, Statistic and Information

Management Division, Comptroller
Bureau, Ministry of National Defense
6. Director, Comptroller Division, Military
Police Command
7. Deputy Director, Budget Management
Division, Comptroller Bureau, Ministry of
National Defense
8. Section Chief, Statistic and Information
Management Section, Comptroller
Division, Army Command Headquarters

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Stay hungry, Stay Foolish

Steve Jobs at Stanford University

2005
Steve Jobs

http://www.youtube.com/watch?
v=WUUjU4Om0KI

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Ethics and ethnic discrimination

Pocahontas Colors of the Wind
Lyrics
http://www.youtube.com/watch?v=
f4vkq2ztxSw
My Heart Will Go On
http://www.youtube.com/watch?v=
Qz3lwXEGWIM
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Ethics and ethnic discrimination

Whitney Houston - I Will Always Love
You
http://www.youtube.com/watch?v=3J
WTaaS7LdU
USA FOR AFRICA - We Are The World
http://www.youtube.com/watch?v=D
zDCBgJLhYw
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I. Business Ethics Defined

A. Business ethics is a complicated and
controversial topic. Highly visible business

ethics issues influence the publics attitudes

toward business and can destroy trust.
1. The field of business ethics concerns
questions about whether specific business
practices are acceptable.
2. Business ethics is controversial and there
is no universally accepted approach for
resolving ethical issues.
3. Values and judgments play a critical role
in the making of ethical decisions.
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I. Business Ethics Defined

B. Some special aspects must be considered
when applying ethics to business.
1. Businesses must earn a profit to
survive, but these profits should not
come from misconduct.
2. Businesses must balance their desires
for profits against the needs and desires
of society.
3. Maintaining a balance in business
often requires compromises or tradeoffs.
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I. Business Ethics Defined

C. Business ethics comprises the principles,
values, and standards that guide behavior
in the world of business.
D. Principles are specific and pervasive
boundaries for behavior that are universal
and absolute.
E. Values are used to develop norms that
are socially enforced.
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I. Business Ethics Defined

Investors, employees, customers,

interest groups, the legal system, and the
community often determine whether a
specific action is right or wrong and
ethical or unethical.

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II. Why Study Business Ethics?

A. A Crisis in Business Ethics
1. Ethical misconduct is a major business
concern, and organizations are under
greater scrutiny than ever by stakeholders.
2. Misuse of company resources, abusive
behavior, harassment, accounting fraud,
conflicts of interest, defective products,
bribery, and employee theft are all
problems cited as evidence of declining
ethical standards in business and in other
areas like government or sports.
Misconduct can occur in any organization.
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II. Why Study Business Ethics?

3. Regardless of what an individual
believes about a particular action, if
society judges it to be unethical or wrong,
whether correctly or not, that judgment
directly affects the organizations ability
to achieve its business goals.

.
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II. Why Study Business Ethics?

B. Reasons for Studying Business Ethics
1. Studying business ethics is valuable for
several reasons.
a. Business ethics is not merely an extension
of an individuals own personal ethicsan
individuals personal values and moral
philosophies are only one factor in the
ethical decision-making process.
b. Being a good person with sound personal
ethics is not sufficient to handle the ethical
issues that arise in a business organization.
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II. Why Study Business Ethics?

c. Business strategy decisions involve
complex and detailed discussions. A high
level of personal moral development
may not prevent an individual from
violating the law in an organizational
context.
d. The values people learn from family,
religion, and school may not provide
specific guidelines for complex business
decisions.
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II. Why Study Business Ethics?

B. Reasons for Studying Business Ethics
2. Studying business ethics helps
businesspeople begin to identify ethical
issues, recognize the approaches
available to resolve them, learn about
the ethical decision-making process and
ways to promote ethical behavior, and
begin to understand how to cope with
conflicts between personal values and
organizational values.
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Americans Trust in Business Sectors

(% of respondents who say they trust the following business

categories)

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A Timeline of Ethical and Socially

Responsible Concerns
1960s

1970s

1980s

1990s

2000s

Environmental
issues

Employee
militancy

Bribes and
illegal
contracting
prices

Sweatshops and unsafe

working conditions in
third-world countries

Cybercrime

Civil rights
issues

Human rights
issues

Influence
peddling

Rising corporate liability

for persona damages
(for example, cigarette
companies)

Financial
misconduct

Source: Adapted from Business

Increasing
employeeemployer
tension

Covering up
rather than
correcting
issues

Deceptive
advertising

Financial
mismanagement and
fraud

Global issues,
Chinese
product safety

Changing work
ethic

Disadvantaged
consumers

Financial fraud
(for example,
savings and
loan scandal)

Organizational ethical
misconduct

Sustainability

Rising drug use

Transparency
issues

Intellectual
property theft

Ethics Timeline, Ethics Resource Center, http://www.ethics.org/resources/business-ethics-timeline.asp (accessed May 27, 2009). Copyright
2006, Ethics Resource Center (ERC). Used with permission of the ERC, 1747 Pennsylvania Ave. N.W., Suite 400, Washington, DC, 2006, www.ethics.org.

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Before 1960: Ethics in Business

Theological discussions of ethics emerged

Catholic social ethics included a concern for
morality in business, workers rights, and living
wages
Protestants developed ethics courses in their
seminaries and theology schools
The Protestant work ethic encouraged hard work

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The 1960s: The Rise of Social Issues

in Business
Social consciousness emerged
Increased anti-business sentiment
JFKs Consumer Bill of Rights a new era of
consumerism
Right to safety, to be informed, to choose, and to
be heard

Consumer protection groups fought for

legislation changes
Ralph Nader
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The 1970s: Business Ethics as an

Emerging Field
Business professors began to write about
social responsibility
An organizations obligation to maximize
positive impact and minimize negative impact
on stakeholders

Philosophers involved
Businesses concerned with public image
Conferences held and centers developed
Issues:
Bribery
Price collusion
Environment

Deceptive advertising
Product safety

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The 1980s: Consolidation

Increased membership in business ethics
organizations
Ethics centers provided publications, courses,
conferences, and seminars
Firms established ethics committees
Defense Industry Initiative on Business Ethics
and Conduct (DII)
The foundation for the Federal Sentencing
Guidelines for Organizations

Corporate support for ethics

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The 1990s: Institutionalization of

Business Ethics
Continued support for self-regulation,
deregulation, and free trade
Health-related issues more regulated
The Federal Sentencing Guidelines for
Organizations (FSGO) in 1991
Set tone for compliance
Preventative actions against misconduct
A company could avoid/minimize potential
penalties
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The Federal Sentencing Guidelines

for Organizations
Standards and procedures for preventing
misconduct

High level of oversight

Care in delegation of authority
Effective communication
Employee training
Systems to monitor, audit, and report
misconduct
Consistent enforcement and continuous
improvement
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The 21st Century: A New Focus

Continued issues with corporate non-compliance
Public/political demand for improved ethical standards
Sarbanes-Oxley Act (2002)

Most extensive ethics reform

Increased accounting regulations

FSGO reforms (2004, 2008, 2010)

Requires governing authorities to be informed of business

ethics programs

Dodd-Frank Wall Street Reform and Consumer

Protection Act (2009)

Aimed at making the financial industry more

transparent/responsible

A firms greatest danger is not discovering

misconduct early
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Organizational Ethical Culture

Ethical culture: The component of
corporate culture that captures the values
and norms that an organization defines as
appropriate
Creates shared values

Goal is to:
Minimize need for enforced compliance
Maximize utilization of principles/ethical reasoning
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Global Ethical Culture

Nations working together to establish
standards of ethical behavior

NAFTA (North American Free Trade Agreement)

EU (European union)
MERCOSUR (Southern Common Market)
WTO (World Trade Organization)

Companies can demonstrate their

commitment to social responsibility through
adopting international standards
Global Sullivan Principles
Coalition for Environmentally Responsible Economies
(CERES)
United Nations Global Compact
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The Role of Organizational Ethics in

Performance

Source: Adapted from Business

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Ethics Contributes to Employee

Commitment
Commitment comes from employees who
are invested in the organization
Employees willing to make personal sacrifices
for the organization
The more company dedication to ethics, the
greater the employee dedication
Concerns include a safe work environment,
competitive salaries and benefits packages, and
fulfillment of contractual obligations
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Ethics Contributes to Investor

Loyalty
Companies perceived by their employees as
being honest are more profitable
Ethical climates in organizations provide a
platform for
Efficiency
Productivity
Profitability

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Ethics Contributes to Customer

Satisfaction
Consumers respond positively to socially
concerned businesses
Being good can be profitable

Customer satisfaction dictates business success

A strong organizational ethical climate places
customers interests first
Research shows a strong relationship between
ethical behavior and customer satisfaction
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Ethics Contributes to Profits

Corporate concern for ethical planning is being
integrated with strategic planning
Maximizes profitability

Corporate citizenship is positively associated

with
Return on investment and assets
Sales growth

Studies have found a positive relationship

between corporate citizenship and
performance
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