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CHAPTER ONE

Bus iness Ethics , The

Chang ing Env ironment,

And Stakeholder

Management

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Environmental Dimensions

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Economic Factors

Increasingly global context for trade, markets,

resources

Business expansion, product expansion

Stock & bond market volatility and

interdependency across international regions

The rise of China and India

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Technological Environment

Internet and telecommunication innovations

Change in jobs, financial transactions, marketoperations

Access to information

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Political Environment

Rise of global terrorism

Change in international coalitions

Increased awareness of issues via electronic

technology

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Governmental and Regulatory

Environment

Constantly changing/updating laws andprocedures

Changing standards for products, processes

(e.g., ISI approval)

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Legal Environment

Judicial actions against anticompetitive

practices(MRTP act, competition act)

Consumer protection (tobacco )

Corporate copyright protection

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Demographic Environment

Globalization

Workforce diversity and accompanying issues

Sexual harassment

Discrimination

Downsizing and outsourcing work force

Aging workforce

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Stakeholders

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Secondary Stakeholders

Local community groups

Special Interest groups

Consumer groups

Environmental groups Media

Society-at-large

Should managers pay attention to the needs of thesegroups?

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What is Business Ethics?

Laura Nash has defined business ethics as the

study of how personal mora l norms apply to

the act iv i t ies and goals of commercia l

enterpr ise, as dealing with three basic areasof managerial decision making:

1. Choices about what the laws should be and

whether to follow them

2. Choices about economic and social issues outsidethe domain of law

3. Choices about the priority of self-interest over the

companys interests

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Unethical Business Practices

Showing respect to those who act unethically

Abusive or intimidating behavior

Misrepresentation of hours worked

Lying

Withholding information

Sexual harassment

Invasion of privacy on the internet

Employee rights and issues

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Why does business ethics

matter?

Financially and Economically

Relationships and Reputation

Morale and Productivity

Integrity and the Common Good

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Five Levels of Business Ethics

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Key Questions if Faced with an Ethical

Dilemma

What are my core values and beliefs?

What are the core values and beliefs of myorganization?

Whose values, beliefs, and interests may be at risk

in this decision? Why? Who will be harmed or helped by my decision or by

the decision of my organization?

How will my own and my organizations core values

and beliefs be affected or changed by this decision? How will I or my organization be affected or by the

decision?

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Figure 1.5:

5 Business Ethics Myths

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Why Use Ethical Reasoning In

Business?

Laws are insufficient

Free-market and regulated-market

mechanisms are insufficient Complex moral problems require an

intuitive or learned understanding

and concern for fairness, justice,

and due process to people, groups,and communities

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Kohlbergs Levels and Stages Of

Moral Development

Level 1: Preconventional level (self-orientation) Stage 1: Punishment

Stage 2: Reward seeking

Level 2: Conventional level (othersorientation) Stage 3: Good person

Stage 4: Law and order

Level 3: Postconventional level(universal, humankind orientation) Stage 5: Social contract

Stage 6: Universal ethical principles

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Stakeholder management

approach

Ethical principles can result in significant

competitive advantage

Provides a framework that enables users to

map and, ideally, manage corporationrelationships (present and potential) with

groups to reach win-win collaborative

outcomes.

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Stakeholder Management

Approach

Six Steps to developing win/win strategies:

1. Identifying and prioritizing issues, threats, oropportunities

2. Mapping who the stakeholders are

3. Identifying their stakes, interests, and power sources

4. Showing who the members of coalitions are or maybecome

5. Showing what each stakeholders ethics are and shouldbe

6. Developing collaborative strategies and dialogue from ahigher ground perspective to move plans andinteractions to the desired closure for all parties