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Lecture 5

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Management Core
MGCR 382
David Schumacher

Nature of Ethics 12/6/2013 8:32:00 AM Ethics and behavior  Revolves around o Beliefs  Individual level o Norms  Country/business level  i.e. laws  try to be clear an unambiguous however their appication and interpretation can lead to ethical ambiguity Nature of ethics and social responsibility in IB  Ethics: individual’s personal belifs about whether a decision, behavior, or action is right or wrong o What constitutes ethical behavior varies from one person to another  Ethical behavior: refers to behaior that conforms to generally accepted social norms  Unethical behaviors: behavior that does not fornform to generally accepted social norms  This that affect individuals ethics: o Children’s experiences o Person’s values o laws General observations of norms:  Personal beliefs o About what constitutes ethical actions/behaviors  Cultural contexts o Those in same contexts are likely to hold similar beliefs as to what constitutes unethical/ethical behaviors  Members of one culture may see behaviors as ethical and perfectly reasonable while others in another may view it as unethical  Circumstances o Can rationalize ethical behavior in certain circumstances  Ex. In Philipines: stealing is wrong, however after their devastating hurricane people were stealing to survive and no legal action was taken  Ethical values o Values = things a person feels to be important  these are strongly affected by national cultures and customs Ethics in Cross-cultural and international contexts Different ethical perspectives:  How an organization treats its employees o Hiring practices  i.e. hiring the best people instead of hiring based on prejudicial or preferential cirteria  Some places its really easy to hire/fire someone  Other places there are logistical complications that make this difficult  Ex. unions, severance packages o Career development  Opportunities Should be fair and attainable for all  However, there exists lots of nepotism (hiring only family members) and family ties  Ex. JP morgan was hiring “princes” in the Chinese market o i.e. relatives of high ranking government officials o Compensation and benefits  Big issue for ethics o Worker’s rights and dignity  How employees treat the organization o Conflict of interest  When a decision potentially benefits the individual to the possible detriment of the organization  Ex. accepting bribes  Ex. Incorporating outside family members so they too can get benefits from the company o Confidentiality o Honesty  Ex. using the work phone for long-distance personal phone calls and lying abou tit  Employees, the organization, and other economic agents o Customers  Must be sensitive to different types of consumers  Ethnic, religious, language differences  Also must not explioit the naivete of customers that are not well educated o Competitors o Stockholders  Use proper accounting standards o Dealers o Suppliers  Give them a fair share of the earnings  Ex. exploiting latin American suppliers because they have a developing country and need all the money they can get  unethical to give them less than they deserve, or less then you would give someone in canada o Labor unions  Stronger/more prominante in certain regions  Less strong in NA compared to EU Managing ethical behavior across borders  Guidelines and codes o Written guidelines  How to treat suppliers, customers, competitors etc o Code of ethics  difference b/w the two:  Written guide lines are specific to situations, wheras code of ethics is a value implication and is more GENERAL You can’t just have guidelines or code in order to ensure ethical behaviors. These must be backed up by organizational practices and the company’s corporate culture o Organizational practices  Means by which you implement the code of ethics and written guide lines o Corporate cultures key to having ethics in a company  Corporate cultures dictate organizational practices which will shape  Standards  Behaviors  If the leaders of the company address ethical issues promptly and appropriately then that sends a message to everyone in that organization that the firm expects them to behave in an ethical manner  Ethics traini
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