Review Ethics Exam V Part 1
Summary
TLDRIn this review, Mary Schecter Butler discusses the importance of business ethics and the Sarbanes-Oxley Act. She explains the distinction between law and ethics, emphasizing that legality is the minimum standard while ethics guide moral behavior in business. The Exxon Valdez case illustrates the consequences of unethical decisions. Butler introduces deontological and utilitarian ethical philosophies, highlighting their impact on business decisions. She stresses the significance of corporate social responsibility and the role of stakeholders in ethical decision-making, concluding with the necessity for corporate leaders to uphold ethical standards.
Takeaways
- 📚 Business ethics help make better decisions by understanding previous decisions and applying moral principles in a business setting.
- ⚖️ Law is considered the moral minimum in business decisions, and ethics come into play after determining legality.
- 💼 Ethical decisions in business involve evaluating legal implications, public relations, safety risks, and financial impacts.
- 🛢️ The Exxon Valdez case illustrates how ethical lapses can lead to severe environmental and financial consequences, with Exxon punished for ignoring known risks.
- 🔨 Punitive damages in legal cases serve as a punishment and deterrent, as seen with Exxon's reduced $2.5 billion penalty for reckless actions.
- 🤝 Two main ethical frameworks in business are Kantian (duty-based) and utilitarian (outcome-based), which focus on fulfilling duty and maximizing happiness, respectively.
- 🌍 Stakeholders in ethical business decisions include not only the company, employees, and customers but also communities, countries, and the global environment.
- 🏢 Corporate social responsibility means businesses must act ethically and be accountable to all stakeholders, beyond just pursuing profit.
- 👔 Ethical leadership starts at the top of organizations, with directors, officers, and managers expected to make responsible decisions.
- 📝 The Sarbanes-Oxley Act of 2002 was enacted to ensure ethical behavior in publicly traded companies, adding accountability for corporate leadership.
Q & A
What is the primary reason for studying business ethics?
-The primary reason for studying business ethics is to make better decisions and to understand the decisions people have made previously within a business context.
How does law relate to business ethics?
-Law represents the moral minimum, and it is the first step in deciding whether or not to undertake an action. If an action is legal, the next question is whether it is ethical.
Why is it important to make ethical decisions in business?
-It is important to make ethical decisions in business to evaluate the legal implications, public relations impact, safety risks for consumers and employees, and financial implications.
What are the consequences of ethical lapses in the judiciary?
-Ethical lapses in the judiciary can lead to findings of bad faith and the award of punitive damages.
Can you provide an example of punitive damages from the script?
-The Exxon Valdez case is an example where punitive damages were awarded. Originally, it was $5 billion against Exxon, which was later reduced to $2.5 billion.
What are the two basic kinds of ethics discussed in the script?
-The two basic kinds of ethics discussed are deontological ethics (Kantian ethics) and utilitarian ethics.
What is deontological ethics and how does it relate to business?
-Deontological ethics is based on duty, regardless of the consequences. It generally arises from religious beliefs or philosophical reasoning. In business, if a corporation fulfills its duty to its customers, it is considered ethical according to deontological ethics.
How does utilitarian ethics differ from deontological ethics?
-Utilitarian ethics focuses on the consequences of actions, without regard to the underlying concept of duty. It is outcome-based and considers the greatest good for the greatest number.
What is the concept of utility in utilitarian ethics?
-In utilitarian ethics, utility is equated to happiness. Every unit of happiness and unhappiness is considered, and decisions are justified when they create the most utility for the most people.
What is corporate social responsibility as discussed in the script?
-Corporate social responsibility means that corporations and businesses are citizens of the communities they are in and should act ethically and be accountable to stakeholders for their actions.
What are stakeholders in the context of business ethics?
-Stakeholders include the corporation itself (stockholders or owners), the people who work in the business, directors, officers, customers, suppliers, and communities.
Why did Congress enact the Sarbanes-Oxley Act of 2002?
-Congress enacted the Sarbanes-Oxley Act of 2002 to ensure that officers and directors of publicly traded companies are ethical and to prevent corporate and accounting fraud.
Outlines
💼 Introduction to Business Ethics and Legal Implications
This paragraph introduces the topic of business ethics, explaining its purpose to help individuals make better decisions and understand past choices. It distinguishes between law and ethics, stating that while the law provides a moral minimum, ethics requires a deeper evaluation of actions beyond legality. Businesses need to consider legal implications, public relations, consumer safety, and financial impacts when making decisions. The example of Exxon Valdez oil spill in 1989 illustrates the severe consequences of unethical behavior, with Exxon being penalized for its role in an environmental disaster.
📜 Kantian Ethics and Duty-Based Decision Making
This paragraph discusses Kantian ethics, which emphasizes duty-based ethics. In this approach, fulfilling one's duty is considered ethical, regardless of the outcome. The example of Apple refusing to release customer data during a terrorism investigation illustrates this philosophy. Despite the controversy, Apple upheld its duty to protect customer privacy. Stakeholders, including the company, employees, communities, and nations, all play a role in ethical decision-making. Kantian ethics supports the idea that as long as duties are fulfilled, ethical behavior is achieved.
⚖️ Utilitarianism and Outcome-Based Ethics
This section explores utilitarianism, a form of outcome-based ethics that evaluates the consequences of actions to determine their ethical value. The philosophy is guided by the principle of 'the greatest happiness for the greatest number,' even extending to animals. The example of building housing for people versus saving frogs demonstrates utilitarianism's focus on overall happiness. Additionally, the idea of distributing happiness to more people, even if the individual impact is minimal, is explored. The philosophy contrasts with older corporate practices that prioritized profits over social responsibility.
🌍 Corporate Social Responsibility and Ethical Leadership
This paragraph covers the importance of corporate social responsibility (CSR), emphasizing that businesses are part of the communities they operate in and must act ethically, considering all stakeholders. Corporations are no longer solely focused on maximizing profits but are also responsible for societal interests. Ethical leadership starts with corporate officers, directors, and managers, and their actions set the tone for the entire organization. Laws like the Foreign Corrupt Practices Act and Sarbanes-Oxley Act were enacted to ensure corporate accountability and ethical behavior in global business practices.
Mindmap
Keywords
💡Business Ethics
💡Sarbanes-Oxley Act
💡Moral Minimum
💡Punitive Damages
💡Stakeholders
💡Utilitarianism
💡Duty-based Ethics
💡Corporate Social Responsibility
💡Foreign Corrupt Practices Act
💡Exxon Valdez Oil Spill
Highlights
Business ethics is about understanding right and wrong behavior in a business setting, involving the application of moral principles.
Law serves as the moral minimum in business decisions—businesses first check if an action is legal, and then determine if it is ethical.
Four important factors to consider when making ethical decisions: legal implications, public relations impact, safety risks for consumers and employees, and financial implications.
Exxon Valdez case: An oil spill that led to massive environmental damage and punitive damages, demonstrating corporate responsibility for ethical behavior.
Kantian ethics (duty-based ethics) focuses on fulfilling duty regardless of the outcome, like in the case of Apple refusing to release private data despite government pressure.
Utilitarianism (outcome-based ethics) assesses decisions based on the greatest happiness for the greatest number, without considering duty.
Stakeholders in business ethics include not only customers, employees, and shareholders but also communities, society, and the world at large.
Corporate social responsibility (CSR) requires businesses to act ethically, considering the impact on society and stakeholders rather than just focusing on profits.
The importance of ethical leadership in corporate behavior: Ethical decision-making starts with corporate leadership, including officers and directors.
Congress enacted the Sarbanes-Oxley Act of 2002 to ensure corporate transparency and accountability, particularly in publicly traded companies.
Punitive damages, such as in the Exxon Valdez case, are designed to punish and prevent future reckless behavior by corporations.
The Foreign Corrupt Practices Act prohibits bribery of foreign officials, holding corporations accountable for ethical behavior abroad.
The Exxon Valdez case highlighted how corporate negligence can lead to severe environmental and economic consequences, serving as a warning to other companies.
Utilitarianism in business ethics also considers the impact on animals, treating them as part of the 'units of happiness' when making decisions.
Sarbanes-Oxley was a response to unethical practices by corporate directors and officers, aimed at restoring trust in corporate governance.
Transcripts
hi everyone this is Mary Schecter Butler
and this is the review for exam 5
business ethics sarbanes-oxley so why do
we study ethics in business to make
better decisions to understand the
decisions people have made previously
and business ethics is a consensus of
what constitutes right and wrong
behavior and the application of moral
principles in a business setting now
we're no law what does business ethics
have to do with law well law is the
moral minimum moral principles and
values applied to social behavior but
law is the moral minimum that means if
you are a corporation and you're
deciding whether or not to do an action
you look to see is it illegal that's the
first step is it legal or illegal if
it's legal then there's another question
to ask is it ethical it's important to
make ethical decisions for 4 different
reasons
when doing it you need to evaluate the
legal implications of every decision the
public relations impact the safety risks
for consumers and employees and the
financial implications as well for
example ethical lapses in the judiciary
create findings of bad faith and the
award of punitive damages now we've
discussed punitive damages those are
damages that are meant to punish a
defendant from doing the same thing
again for example an in Ray Exxon Valdez
the Exxon Valdez case is a 1989 case
where an oil tanker ran aground off the
coast of Alaska spilling millions of
gallons of oil into the Prince William
Sound the oil tanker spilled 20% of its
cargo into the water off of a layout
Alaska's Coast which was 11 million
gallons of oil thousands of animals and
hundreds of birds died and tourism
suffered the people who fish
I had oil all over their boats their
fish a property and wildlife were
destroyed why did it run aground while
well the ship's captain Joseph Hazelwood
left the bridge and instructed the third
mate Gregory Cousins to take the wheel
cousins guided the ship incorrectly and
hit a reef one of the questions was
whether captain Hazelwood who was an
alcoholic was under the influence of
alcohol when he left the bridge and the
problem was the captain had a history of
alcohol abuse which was known to Exxon
but Exxon permitted him to maintain his
position originally the plaintiffs were
awarded 287 million dollars in
compensatory damages compensatory to
compensate them for their actual
injuries the courts later reduced that
to 20 million and both captain Hazelwood
and Exxon were determined to have been
reckless and they awarded punitive
damages to the plaintiffs 5,000 and
punitive against Hazelwood and 5 billion
against Exxon now that 5 billion was
reduced to 2.5 billion later on but you
can see the problem for a corporation
when a corporation ignores environmental
concerns ignores issues with their
employees and as a result drastic
economic and environmental effects were
caused now they punished Exxon but in
punishing Exxon they also sent a signal
to all the other oil companies beware we
are not going to let permit you to ruin
our environment to ruin our businesses
along the coasts you better follow the
laws that you part of me that apply to
your industry otherwise we're going to
hold you accountable now we're going to
learn about two different basic kinds of
ethics and I'm not going to go into all
the details of these ethical
philosophies this is not a philosophy
class but you do need to know these two
canto nyan philosophy can Tony and
ethics and utilitarian is our now again
I'm going to go into just certain
aspects of these philosophies those of
you who are philosophy majors can add a
great deal to this but these are the
basics that we need to know for this
class there are Duty based ethics which
is Ken Tony and philosophy ethics based
on an underlying concept of duty
regardless of the consequences
they generally arise from religious
beliefs or philosophical reasoning and
basically this would be the law is a as
long as we follow the law then we are
doing the ethical thing the outcome
doesn't matter as long as you have
fulfilled the duty so if a corporation
has a duty to their customers and they
fulfill the duty then that's all they
need to do to comply with can Tony and
ethics an example of this would have
been the recent Apple case where there
were terrorists who had Apple phones and
Apple would not release the information
on their phones to the United States
government Apple claimed that had
privacy contracts with its Apple
ultimately gave up the information but
not without a fight
based on can't only and can't own Ian's
philosophy Apple had the right to refuse
to give out its customers private
information however you could see why
people would be up in arms about that
because these stakeholders that were
involved and stakeholders include the
customers the company the employees but
it also includes the communities the
world because in this case we were
talking about terrorism terrorism
affects not only the people who were
killed or hurt by the terrorists but
also the communities and the United
States
and the world community so when we look
at state stakeholders we look at all
things the company the company's
employees the customers the communities
the United States the world and see if
they apply and then we look and we go to
what we call ethics part of me outcome
based ethics which includes and in this
case we're going to talk about
utilitarianism outcome based ethics look
at the consequences of the action
without any regard to the underlying
concept of duty
so sometimes it's recall called as
situational ethics or the end justifies
the means
the end justifies the means and for the
APPL example people argued that the end
was getting rid of terrorists and
terrorism and the government needed the
information on those terrorist cell
phones because they needed to find out
if there was a terrorist cell still
working if these people worked by
themselves with other groups where they
connected nationally or internationally
so according to utilitarianism
well according to outcome based ethics
the information should have been given
up specifically utilitarian
to utilitarianism sorry states that a
decision is justified when it creates
the most utility for the most people
utility is equated to happiness so for
every unit of happiness we look at every
unit of unhappiness utilitarianism is
unique because it counts people and
animals as part of that count so for
example if there were a thousand frogs
and a sow and five hundred people
in a community and the community needed
more housing but in order to build more
housing for 500 people a thousand frogs
would be killed
based on utilitarianism each frog counts
as a unit so that's a thousand units of
happiness if if the buildings are not
built and then we have 500 people which
each one is a unit of happiness so that
would be 500 units of unhappiness if the
housing was not built well under
utilitarian utilitarian ethics the
housing unit would not be built because
the thousand frogs create a thousand
units of happiness and the people only
have 500 units of unhappiness so the
frogs outweigh the people as well if Joe
gets a million dollars or a million
people get $1 okay what would be better
do we give Joe the million dollars or do
we give a million people one dollar now
one dollar to a million people is not
that much happiness
well utilitarianism doesn't take into
account the amount of happiness only
that there's a positive reaction so if
we give a million dollars to Joe he's
gonna be a static but he's only one
person if we give a million million
people one dollar each each person will
be happy to have the dollar but not a
static in any case utilitarianism says
give a million people one dollar and we
have a million units of happiness again
you may ask why do we care you know in
the old days corporations did what was
best for the corporation and what gave
them the most profit back in the oil
baron days we had that but nowadays
people care about corporate social
responsibility and corporate social
responsibility means that corporations
and business
our citizens of the communities that
they are in and that they should act
ethically and be accountable to the
stakeholders for their actions now I
said earlier on that stakeholders are
the corporation itself and that means
the stockholders so those are two
different s words stockholders are the
people who own stock in the corporation
it may be a business that doesn't have
stock and we'll talk about that we've
talked about different types of
businesses so the people who own the
business whether it be stockholders or
family members sole proprietorship and
then we need to talk about the people
who work in the business they are share
they are stakeholders as well and then
the directors and officers in a
corporation also a part of this we have
the customers we have the suppliers we
have the communities all of these people
are stakeholders and when we're talking
about ethics we need to take all of them
into account so consumers the United
States if that applies the world if that
applies society as a whole we need to
the corporations or the businesses need
to consider how they should act and they
need to act in furtherance of society
societal interests at the expense of the
corporation's own profit maximizing
behavior and that's what social
responsibility is we don't just get to
create whatever we want and ruin the
environment or create products that are
harmful corporations now have duties now
the ethics of the corporations start at
the top starts with the corporate
leadership with the officers directors
the managers and the behavior of the
managers and owners is important so
these are the people these are the
people you will be and you need to learn
to make ethical decisions now we've
heard of cases where people or
corporations or directors are not making
ethical
decisions so Congress has decided that
we have some laws that will take care of
those things for example we have the
Foreign Corrupt Practices Act that
prohibits bribery of high-ranking
foreign officials that means we don't
get to go into a third world country and
pay off the officials and do whatever we
want now to make sure that officers and
directors of publicly traded companies
are on the up-and-up
Congress enacted the sarbanes-oxley Act
of 2002
تصفح المزيد من مقاطع الفيديو ذات الصلة
Lec 09- Understanding the Marketing Environment, Ethical Behavior, and Social Responsibility- 2
TOPIC 5 ETHICS, CSR AND SUSTAINABILITY
Podcast Management Days 2024 || Etika dalam Bisnis : Kejujuran atau Keuntungan?
Business Ethics - Sustainability Short
Ethical theories | Egoism theory | Utilitarianism theory | Teleological Theories
Why do ethics matter? | Shefali Roy | TEDxOxbridge
5.0 / 5 (0 votes)