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Chapter

MGMT 1040 Chapter Notes -Groupthink


Department
Management
Course Code
MGMT 1040
Professor
William(bill) Woof

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MORAL ISSUES IN BUSINESS
Chapter 1: The Nature of Morality
ETHICS (moral philosophy) (3)
The individual character and the moral rules that govern and limit our conduct
Questions of:
Right and wrong
Fairness and unfairness
Good and bad
Duty and obligation
Justice and injustice
Business Ethics
Business Ethics is the study of what constitutes right and wrong, or good and bad, human conduct in a
business context
MORAL VERSUS NON-MORAL STANDARDS (4)
Moral standards concern behavior that is of serious consequence to human welfare that can profoundly
injure of benefit people
* Standards that govern or conduct in these matters are moral standard
Moral standards take priority over other standards, such as self -interest
Morality and Etiquette
Etiquette refers to the norms of correct conduct in polite society or any special code of social behavior and
courtesy
* Observance of rules of etiquette does not make one moral
Morality and Law
Types of law:
Statutes: Law enacted by legislative bodies. Statutes make up a large part of the law and are what
many of us mean when we speak of laws. Ex. The law that defines and prohibits theft is a statute.
Common Law: laws applied in the English-speaking world when there are few statutes.
Constitutional Law: refers to court ruling on the requirement of the Constitution
Legality and morality are different.
An action can be illegal but morally right
An action that is legal can be morally wrong

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Law is not sufficient
Professional Codes
Professional codes of ethics are the rules that are supposed to govern the conduct of members of a given
profession
RELIGION AND MORALITY (7)
Religion involves a formal system of worship and prescriptions for social relationships.
Singular vision- avoiding hell
Golden Rule (found most religions): Do to others what you would want done to you
Divine command theory- if something is wrong the only reason it is wrong is because God commands us not
to do it.
Religion definitely influences us, but differs too widely to be the basis for morality, if anything, it will only
persuade those who already agree with your particular interpretation of your particular religion.
ETHICAL RELATIVISIM (9)
Everything is relative to culture
What a particular society believes.
What is right or wrong is determined by society.
Business has its own standards and should be judged only by those standards? – Business activity affects
others (i.e. Consumers)
- ^ Idea of going to other countries, what ethical standards should be followed?
- Ex: sweatshops
Logically absurd
HAVING MORAL PRINCIPLES (10)
When a principle is part of a persons moral code, that person is strongly motivated toward the conduct
required by the principle, and against behavior that conflicts with it.
Most morally responsible companies are usually the most profitable
Having moral principles and not being selfish will lead to a happier life
MORALITY AND PERSONAL VALUE (12)
Narrow sense: Morality functions as an internal monitor of our own behaviors and as a basis for accessing
actions of others
Broad sense: Morality is not just the principles of conduct that we embrace but also the values, ideas, and
aspirations that shape our lives.

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There is more to living a morally good life than being a good businessperson or being good at your job.
INDIVIDUAL INTEGRITY AND RESPONSIBILITY (13)
Sometimes pressures of various sorts make it difficult to stick with our principles.
Organizational Norms
One’s degree of commitment is a measure of ones loyalty to the “team”
Experience pressure from the top to meet corporate goals and comply with corporate norms.
The need to meet corporate objectives, to be team player, and to conform to organizational norms can lead
otherwise honorable individuals to engage in unethical conduct.
Conformity
There is pressure to conform.
Example in the text showed how easily people switched their answers from being correct to incorrect
because of the pressure of not conforming with the rest of the group even though they knew their answer was
right.
Groupthink
Happens when pressure for unanimity within a highly cohesive group overwhelms its members desire or
ability to examine a situation realistically and consider alternative courses of action
Members of the group:
Close their eyes to negative information
Ignore warnings that the group may be mistaken
Discount outside ideas that might contradict the thinking or the decisions of the group
Diffusion of Responsibility
Many people in a group leads to no single individual seeing himself or herself as responsible for what
happens, no one accountable. This diffusion of responsibility inside an organization leads individuals to have
a diluted or diminished sense of their own personal moral responsibilities.
The greater the number of people observing the even, the less likely any of them will feel obliged to do
anything about it.
MORAL REASONING (15)
It’s useful to view moral reasoning in the context of an argument. An argument is a group of statements, one
of which (called the conclusion) is claimed to follow from the others (called the premises).
Not accepting the conclusion while accepting the premises would result in a contradiction.
Premises logically entail its conclusion = valid
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