Chapter 7- The Ethics
Ethics are our individual and moral standards
How Do we Define “Business Ethics”?
“… the study of business situations, activities, and decisions where issues of right and wrong are
“rules, standards, codes or principals which provide guidelines for morally righ behaviour and
truthfulness in specific situations”
Basically the dos and don‟ts of how to conduct Business
o “the application to business activity of ethics, the study of morals or principles of
what is right or wrong in human behaviour” (Edmund Marshall, “Business and
Society”, Routledge, 1993)
o “…concerned with the beliefs that determine what is acceptable (and what is not)
in business” (Wheelen, Hunger and
o Wicks, “Concepts in Strategic Management”, Canadian Edition, Pearson Prentice
o “applies a group‟s standards of right and wrong to the decisions and actions of
business organizations, managers, and employees” (Marian Burk Wood,
“Business Ethics in Uncertain Times”, Prentice Hall, 2004)
Common Themes Emerging From Definitions of Business Ethics
Right and wrong
o based on law
o sets standard on what is right and wrong
o Holistic standards
o The company performance is set against these standards
o Values are subjective preference of what is right and what is wrong
Where do our ethical values come from? : The Sources of Ethics
Ethics are learned through a variety of channels:
o Reflections of social values (as expressed through the media, for example)
reinforce cultural beliefs of right and wrong that were first addressed through the
following three channels:
o Family groups
o Educational institutions
o Religious beliefs
In different cultures, people have different expectations of ethical values. Influences on Ethical Behaviour
o This is very influential
o It is based on our own choice of what we believe to acceptable and what is not
o Personality plays an important role in shaping our individual morals
National and ethnic cultures
o Culture is the collective programmed way of behaving
Government legislation and regulation
o Gov‟t regulation plays an important role in influencing ethical behaviour
The legal system
Colleagues or peers
o Studies have shown that people who you interact with on a daily basis affect our
behaviour a lot.
o People with different educational backgrounds have different ways of thinking of
Corporate mission, vision, and values statements
Activist or advocacy groups
o Only have impact on behaviour if you have something to do with this group
Business or industry organizations
Note: it is important to remember that what is considered right in business practices may not be
considered ethical. Ex. using third world labour forces at a fraction of a cost of a Canadian
Global work theory: used a lot in moral dilemmas to…
Two Key Branches of Ethics
Descriptive ethics involves describing, characterizing and studying morality
o “What is”
i.e. of you do this and that you would be ethical
Normative ethics involves supplying and justifying moral systems
o “What should be”
Theory based on educating someone in a moral way so that they can make
ethical decision on their own. Making Ethical Judgements
Making ethical judgements: Deciding what is ethical
o Situations where a decision must be made between two equally valid but mutually
exclusive courses of action
What approaches exist to help make defensible ethical decisions
o Otto Bremer: Four Questions
o Josephson: Bell, Book, Candle
o Integrated Ethical Decision Model
Otto Brewmer: 4 ethics Questions
Model tells you what to do when you‟re in a situation of moral dilemma.
1. What is (descriptive ethics)?
What is actually going on in an ethical sense (what is the real situation)
2. What ought to be (normative ethics)?
What managers should do
3. How do we get from What Is to What Ought to Be?
How is the gap closed? May actually not be able to fully close the gap!
4. What is Our Motivation?
What is the motive for being ethical?
Making ethical decisions- Josephson‟s “bell, book, candle” approach
“Listen for the bells warning you of an ethical decision (the „bell‟); o try to keep your ears open
o if there are warning signs, pay attention to them
Check to see if there are any laws, regulations or rules which restrict your choices (the
o Try and see if there are any procedures to follow
How will your decision look in the light – could a reasonable, fair-minded person
conclude you acted improperly? (the candle).”
 Michael Josephson cited in West, Andrew. 2007. Sartrean Existentialism and Ethical
Decision-Making in Business. Journal of Business Ethics, Springer 2007.
Nash: Some Plainly Worded Questions
1. Have you defined the problem accurately?
2. How would y