Ethics and Decision Making

CHAPTER I WHAT IS ETHICS? – Each society form a set of rules that establishes the boundaries of general accepted behavior. These rules are often expressed in statements about how people should behave, and they fit together to form the MORAL CODE by which a society lives. – The term MORALITY refers to a social conventions about right and wrong that are so widely shared that they become the basis for an established consensus. DEFINITION OF ETHICS: ETHICS – is a set of beliefs about right and wrong behavior within a society.

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Ethical behavior conforms to generally accepted norms-many of which are almost universal. VIRTUES – are habits that incline people to do what is acceptable. VICES – a re habits if Unacceptable behavior. THE IMPORTANCE OF INTEGRITY: – Your moral principles are statements of what you believe to be rules of right conduct. – A person who acts with integrity acts in accordance with a personal code of principles. – One of the cornerstones of Ethical behavior- is to extend to all people the same respect and consideration that you expect to receive from others. THE DIFFERENCE BETWEEN MORALS, ETHICS, AND LAWS MORAL’s are one’s personal beliefs about right and wrong while the term ETHICS describes standards or codes of behavior expected of an individual by a group to which an individual belongs. LAW is a system of rules that tell us what we can and cannot do. ETHICS IN THE BUSINESS WORLD – Ethics has risen to the top of the business agenda because the risks associated with inappropriate behavior have increased, both in their likelihood and in their potential negative impact. Several trends have increased the likelihood of unethical behavior. 1st- greater globalization nd – in today’s necessionary economic climate, organizations are extremely challenge to maintain profits. WHY FOSTERING GOOD BUSINESS ETHICS IS IMPORTANT 1. Gaining the good will of the community. 2. Creating an organization that operates consistently. 3. Fostering good business practices. 4. Protecting the organization and its employees from legal action. 5. Avoiding unfavorable publicity. GAINING THE GOOD WILL OF THE COMMUNITY – Although organization exist primarily to earn profits or provide services to customers, they also have some fundamental responsibilities in a formal statement of their company’s principles or beliefs.

CREATING AN ORGANIZATION THAT OPERATES CONSISTENTLY – Organizations develop and abide by values to create an organizational culture and to define a consistent approach for dealing with the needs of their stakeholders, employees, customers, suppliers and the community. Many companies share the following values: •Operate with honesty and integrity •Operate according to standards of ethical conduct, in words and action •Treat colleagues, customers, and consumers with respect •Strive to be the best at what matters most to the organization •Value diversity •Make decisions based on facts and principles

Protecting the Organization and it’s Employees from Legal Action In a 1909 ruling the U. S. Supreme Court established that an employer can be held responsible for the acts of it’s employees even if the employees act in a manner contrary to corporate policy and their employer’s directions. Avoiding Unfavorable Publicity The public reputation of a company strongly influences the value of its stock, how consumer regard it’s product and services, the degree of oversight it receive from the government agencies, and the amount support and cooperation it receives business partners. Fostering Good business practices

In many cases, good ethics can mean good business and improved profits. Companies that produce safe and effective products avoid costly recalls and lawsuits. Companies that provide excellent service retain their customers instead of losing them to competitors. Improving Corporate Ethics Only one in four organizations has s well-implemented ethics and compliance program. Characteristics of a successful ethics program; •Employees are willing to seek advice about ethics issues •Employees feel prepared to handle situation could read to misconduct •Employees are for ethical behave Employees feel positively about their company

Appointing a Corporate Ethics Officer Provides an organization with vision and leadership in the are of business conduct. Organization send a clear message to employees about the importance of ethics and compliance in their decision about who will be in charge of the effort an to whom that individual will report. Specific responsibilities include; •Responsibility for compliance- that is ensuring the ethical procedures are put into place and consistently adhered to throughout the organization. •Responsibility to creating and maintaining the ethics culture that the highest level of corporate authority. Responsibility for being a key knowledge and contact person on issues relating to corporate ethics and principles. Ethical Standard set by Board of Directors The board of directors is responsible for the careful and responsible management of an organization. The board fulfills some of it’s responsibilities directly and assign others to various committees. Establishing a Corporate Code of Ethics A code ethics is a statements that highlights the organization key ethical issues and identifies the overarching values and principles that are important to the organization and its decision making.

Example; Intel Conducting Social Audits An organization reviews how well it is meeting its ethical and social responsibility, goals, and communicates its new goal for the upcoming year. Requiring Employees to take Ethics Training Today, most psychologists agree that the ancient Greek philosophers believed that personal conviction about right and wrong behavior could be improved through education. Lawrence Kohlberg, the late Harvard psychologist, found that many factors stimulate person’s moral development, but one of the most areas is education. Creating an Ethical Work Environment

Most employees want to perform their jobs successfully and ethically but good employer sometime make bad ethical choices. Including Ethical Consideration in Decision Making Develop a Problem Statement A problem statement is a clear, concise description of the issue that needs to be addressed. One must gather and analyze facts to develop a good problem statement. Seek information and opinions from a variety of people to broaden your frame of reference. Identify Alternatives The stage of decision making, it is ideal to enlist the help of others, including stakeholders to identify several alternatives solutions to the problem.

During brainstorming process tries not to be critical of ideas. Evaluate and Choose Alternatives Evaluating based on numerous criteria such as effectiveness at addressing the issue, the extent of risk associated with each alternatives cost, and time implementation. The alternative selected should be ethically and legally defensible: be consistent with the organization’s policies and codes of ethics; take into account the impact on others; and, of course provide a good solution to the problem. Four common approaches to ethical decision making Approach dealing to moral issues :

Principles Virtue ethics approach the ethical choice best reflects moral virtues in yourself and in your community. Utilitarian Approach the ethical choice produce the greatest excess of the benefits over harm. Fairness Approach the ethical choice treats everyone the same and shows no favor or discrimination. Common Good Approach the ethical choice advances the common goods.

Virtue Ethics Approach The virtue ethics approach to decision making focuses on how you should behave and think about relationship if you are concerned with your daily life I a community. It can also be applied to the business world by equating the virtues of a good businessperson. Utilitarian Approach The utilitarian approach to the ethical decision making states that you should choose the action or the policy that has the best overall consequences for all the people who are directly or indirectly affected. Fairness Approach

The fairness approach focuses o how fairly and policies distribute benefits and burdens among all people affected by the decision. Common Good Approach The common good approach to decision making is based on a vision of society as a community whose member work together to achieve a common set of values and goals. Implement Decision Once the alternatives are selected, it should be implemented in an efficient, effective and timely manner. Evaluate the Results Monitor the results to see if the desire effect was achieved, and observed the impact on the organization and the various stakeholders.

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