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RSM100Y1 (431)
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Chapter 3


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Rotman Commerce
John Oesch

RSM100Y Midterm 2 Notes Yefan Chen RSM Review (Chp. 3 & 6) Chapter Three: Business Ethics Ethical Behaviour conforms to individual beliefs and social norms about what are right. Business Ethics refers to the behaviour of employees of an organization. Problem: Individual ethics differ, thus laws must be made. It is the ambiguity of certain cases that motivate people to take advantage of ethics. Jeitinho Get the job done, by whatever means necessary. Deontology ethics depends on the duty, rights, and justice involved. The duty involves vows and responsibilities, while right involves the freedom of association. Virtue ethical if an act parallels the virtues expected by stakeholders (Societal norms, owners, employees, members, community, institutions) Consequentialism ethical decisions must have good consequences The 3 Categories of Managerial Ethics 1. Behaviour towards employees a. Hiring and Firing b. Wages and Conditions c. Privacy and Respect 2. Behaviour towards the organization a. Conflict of interest (When an activity benefits the employee at the expense of the employer, e.g. giftsbribes from more expensive suppliers) b. Confidentiality and Honesty (Stealing office items, Selling secrets to competitors) 3. Behaviour towards other economic agents a. Advertising, Financial Disclosure, Ordering, Negotiation b. Relationship with customers, competitors, suppliers, etc. c. International practices (in some countries, its customary to receive bribes) The 3-Step Model to Distinguish Unethical Behaviour 1) Gather the relevant factual information 2) Determine most appropriate moral values 3) Make an ethical judgment based on the rightnesswrongness of the activity [Ethical Norms to Consider]: Utility does the act optimize what is best for those who are affected? Rights does it respect the rights of the people involved? Justice is it fair? Caring is it consistent with our responsibilities toward each other? If the answer is no to all four, its unethical. 1 P a g e www.notesolution.com
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