The Importance of Business Ethics
Summary
TLDRIn this video, Travis Stewart explores ethical dilemmas in business, such as receiving extra change from a cashier or deciding the fate of individuals on train tracks. He discusses the impact of unethical behavior on employee performance, company culture, and public perception. Stewart points out that despite some companies committing fraud, many maintain ethical practices due to 'protected values.' He emphasizes that ethical business practices enhance employee morale, loyalty, and a company's profitability, urging viewers to reflect on the importance of ethics in their organizations.
Takeaways
- 🤔 Ethical dilemmas are common in daily life and business, often testing our moral compass and decision-making.
- 💸 The choice between personal gain and ethical behavior can have significant consequences for individuals and organizations.
- 🛒 In the example of a cashier giving too much change, considering the potential impact on the cashier is crucial, highlighting the ripple effects of actions.
- 🚂 Classic ethical dilemmas, such as the train track switch scenario, illustrate the complexity of decisions and the difficulty of quantifying human life.
- 🏢 Unethical business practices, like those seen in Wells Fargo, Volkswagen, and Facebook, can lead to severe reputational damage and legal consequences.
- 📉 A lack of ethics within an organization can negatively affect employee performance, leading to increased errors and decreased morale.
- 🤝 Trust and respect within a business are crucial for success, and unethical behavior by managers can erode these foundations.
- 🗣️ Lying to employees can quickly destroy trust, and even 'white lies' can have lasting negative effects on workplace relationships.
- 🌐 Public knowledge of unethical business practices can lead to a loss of credibility and customers, impacting a company's long-term success.
- 🔑 The concept of 'protected values' as described by economist Alexander Wagner suggests that deeply held values can guide individuals to act ethically, even in the face of temptation.
- 🏆 Ethical business practices not only improve employee satisfaction and company culture but also contribute to long-term profitability and a positive public image.
Q & A
What is the main ethical dilemma discussed in the video script?
-The main ethical dilemma discussed is whether to keep extra money given by a cashier in error or to return it, considering the potential consequences for the cashier.
What are the potential consequences for a cashier if they make a mistake with the cash?
-Potential consequences for a cashier making a cash mistake could include having to personally pay back the difference, losing their job, or facing other disciplinary actions.
What is the 'trolley problem' mentioned in the script, and how does it relate to ethical decision-making?
-The 'trolley problem' is a thought experiment in ethics where a person must decide between two unethical options, such as causing the death of one person to save five others. It relates to ethical decision-making by illustrating the complexity and difficulty of making moral choices.
How does the script describe the impact of unethical behavior on large corporations?
-The script describes the impact of unethical behavior on large corporations as leading to fraud, negative public image, loss of customer trust, and potential legal and financial consequences.
What are some examples of unethical business practices mentioned in the script?
-Examples include Wells Fargo employees creating unauthorized accounts, Volkswagen lying about emissions, Enron hiding debt, and Facebook sharing user data without consent.
How does a lack of ethics within an organization affect employee performance?
-A lack of ethics can lead to decreased employee performance by causing tension, mistrust, and demotivation, as well as increasing the likelihood of errors and the need for rework.
What role do 'protected values' play in maintaining ethical behavior according to the script?
-Protected values are deeply held moral principles that resist the temptation to engage in unethical behavior, guiding individuals to act morally even when no one is watching.
How does the script suggest that ethical behavior can improve a company's performance?
-Ethical behavior can improve a company's performance by increasing productivity, employee morale, and loyalty, and by maintaining a positive reputation that attracts investors.
What is the significance of the experiment with coin flips mentioned in the script?
-The coin flip experiment illustrates the concept of protected values by showing that some individuals chose to report honestly despite the anonymity and potential for personal gain, highlighting the strength of their ethical values.
How does the script conclude regarding the importance of business ethics?
-The script concludes that while some companies engage in unethical practices, many more uphold business ethics due to their protected values, which leads to improved employee behavior, company performance, and long-term profitability.
Outlines
🤔 Ethical Dilemmas in Business
The paragraph introduces ethical dilemmas in daily life and business, using the example of a cashier giving back more money than due. It emphasizes the importance of considering the consequences of one's actions and the impact on others. The script discusses the potential negative outcomes for the cashier and extends the discussion to larger ethical issues in corporations, such as fraud and dishonesty, which can lead to severe consequences for both individuals and companies. It also touches on the broader implications of unethical behavior within organizations, including its effects on employee performance, trust, and company reputation.
💼 The Power of Protected Values in Ethical Business Practices
This paragraph explores the concept of 'protected values' as a driving force behind ethical behavior in individuals and businesses. It references an experiment by economist Alexander Wagner, which demonstrates how individuals with strong ethical values are less likely to engage in unethical behavior, even when no one is watching. The discussion highlights how companies that uphold ethical standards can foster a positive work culture, leading to increased productivity, employee morale, and loyalty. The paragraph concludes by emphasizing the importance of business ethics in building a company's reputation and attracting investors, and it invites viewers to share their thoughts on the topic.
Mindmap
Keywords
💡Ethical Dilemmas
💡Moral Code
💡Cause and Effect
💡Ethical Behavior
💡Fraud
💡Employee Performance
💡Protected Values
💡Corporate Social Responsibility (CSR)
💡Reputation
💡Productivity
💡Investors
Highlights
Ethical dilemmas are a common part of daily life and can have significant consequences.
Some individuals prioritize personal benefits over ethical actions, leading to a lack of moral code.
The example of a cashier giving too much change raises questions about personal responsibility versus company error.
Consideration of the potential personal impact on cashiers for their mistakes is crucial.
Ethical dilemmas like the 'trolley problem' illustrate the complexity of decision-making.
Adding personal relationships to ethical dilemmas can drastically change decision outcomes.
Fraudulent activities in large corporations are more common than one might think.
Examples of unethical behavior in知名企业 include Wells Fargo, Volkswagen, Enron, and Facebook.
Unethical decisions can stem from ego, pressure to meet financial goals, or a lack of regulation enforcement.
A lack of ethics at all levels of an organization can negatively impact employee performance and morale.
Ethical breaches can lead to a toxic work environment with decreased trust among employees.
Managerial ethical behavior is key to maintaining respect and a positive company culture.
Lying to employees can quickly erode trust and damage the employer-employee relationship.
Public knowledge of unethical business practices can lead to long-lasting damage to a company's reputation.
Despite unethical practices, many companies maintain high ethical standards due to 'protected values'.
Ethical behavior in business is linked to increased productivity and employee morale.
Business ethics directly impacts a company's profitability and reputation in the eyes of investors.
The video concludes by encouraging reflection on the importance of ethical decision-making in business.
Transcripts
what would you do if you're in a store
paying for an item and the cashier gives
you back more money than you are
supposed to receive
would you walk away happy that you got a
better deal than you're supposed to or
would you correct the cashier and give
the money back
hey guys travis stewart here and welcome
back to the business mindset
we are faced with ethical dilemmas
almost on a daily basis
and unfortunately some people don't
always follow the moral code of doing
what is right
they don't consider the cause and effect
of their actions putting their own
benefits before anyone else
going back to the example of the cashier
if you walked away with the extra cash
thinking well they should do their job
better or
it's fine the company factors in for
human errors what if that wasn't the
case
what if the cashier had to personally
pay back any differences when cashing
out at the end of the day
or worse what if they lost their job as
a result let's do another classic
example of an ethical dilemma
let's say that you controlled a switch
on a set of train tracks the train is
currently going to hit and kill
five people on that track if you switch
it it'll only kill one person
but here's the dilemma you are now
responsible for the death of that person
what do you choose not an easy choice is
it likely most of you would save the
five over the one but let me add another
factor to the trained dilemma
what if that one person on the other
track was someone that you knew if that
person was your mother your spouse or
your child
is your answer still the same each year
one in seven large corporations commit
some sort of fraud where they put their
personal gains before those who would be
impacted by the unethical action taken
we've seen this in the banking industry
with wells fargo where employees created
millions of savings accounts for people
without their permission
car companies like volkswagen lying
about their car's emission results
oil and gas companies such as enron that
had billions of dollars in debt from
their financial statements
as well as facebook who provided users
personal data to cambridge analytics
without their users consent so why is it
there are some companies putting the
cart before the horse when it comes to
ethical behavior
is it ego they don't want to show
weakness was it the pressure from
shareholders to meet or exceed quarterly
or annual results
despite the ever-growing regulations to
stop unethical decisions from being made
these type of unethical business
decisions are still happening today
of course the examples i gave are from a
general outside perspective of large
companies
but consider the impact of a lack of
ethics within all levels of an
organization
not only at the executive level a lack
of ethics has a negative effect on
employee performance
there are cases when employees are so
concerned about getting ahead and making
money
they ignore protocols of their work
which can lead to errors that impact
various departments in the organization
because
the work has to be done again the right
way there are also times when employees
have the mindset that acting ethically
and following the rules will not get
them ahead
so they're demotivated which also leads
to a decrease in performance
a lack of ethical behavior can also
cause tension among employees
if some employees are breaking the rules
to get ahead it creates a culture where
you can't trust
anyone out of the fear that they take
advantage of you to satisfy their own
desires
this is incredibly damaging to a
business since most businesses rely on
teams or departments
collaborating to make the company
successful worse yet
if a manager shows a lack of ethical
behavior he'll likely lose the respect
from his staff
as i'm sure you know it's difficult to
run a successful business without
leaders who are well respected within
the organization
it's far too common when managers and
supervisors use their position and power
to mistreat and disrespect others
there's little protection against
abusive behavior in the workplace
unless the situation you're in involves
race gender or ethnic origin and even
this will vary depending on the country
you're working in
the quickest way to lose trust with your
employees is to lie to them but
employers do this all the time one out
of every five employees reported that
their manager or supervisor has lied to
them within the past year
i don't know the severity of the lies
from the statistics some consider white
lies as being acceptable in cases where
you're protecting someone's feelings
but in the end lies always reveal
themselves and at some point the
employee will still lose trust with you
for not being honest and straightforward
with them and if a lack of business
ethics becomes known by the public
the business will lose credibility and
trust which is very difficult to
overcome because
the brand will be associated with that
negative action for years into the
future
especially today when there's an
increased focus on corporate social
responsibility
and their impact on labor practices the
environment discrimination etc
some businesses are able to overcome a
negative public image however
it comes at a price the time and the
money spent on advertising campaigns to
rebuild the image in a positive way
most companies still lose a large amount
of their customers and in many cases
never win back the customers that they
lost
for example nike was faced with a
negative public backlash about child
labor in developing countries
starbucks was hit with a negative
headline for violating fair trade
agreements on coffee beans
this kind of media can have detrimental
consequences for a brand because
even if they rectify the problem the
brand has still been associated with
that unethical action which
remains in the minds of consumers
despite the several cases of unethical
business practices there's still hope
at the beginning of the video i
mentioned that there's one in seven
companies that commit some sort of
unethical business action
what about the other six companies what
keeps them on the path of ethical
business practices
according to economist alexander wagner
the driving force of ethical behavior of
individuals is what he calls protected
values
where these values are so deeply rooted
in the individual they can resist the
temptation to giving in to unethical
behavior
and do what's morally right the reason
for this is because
acting according to your protected
values holds more meaning intrinsically
if you find ways to earn money that's
consistent with your protected values
rather than
finding shortcuts or taking some sort of
unethical actions to make a quick gain
mr wagner conducted an experiment where
individuals would flip a coin
four times in a private room
participants were instructed that they
would receive five dollars for every
coin flip that landed on tails
because the experiment was anonymous the
participants could provide any answers
they wanted
although the probability of flipping
tails four times in a row is very low
forty percent of participants reported
flipping tails four times which
is still higher than the probability
however what was interesting was the
other sixty percent of participants who
didn't report flipping tales four times
they could have
no one was watching them and there was
no penalty or disciplinary action for
falsely reporting
these individuals hold much stronger
regards for their ethical values than
the other 40
which is mr wagner's conclusion although
that one in seven companies commits some
sort of fraud there are six
companies that follow ethical business
practices because they're protected
values which is
a part of their organization's culture
when management is leading an
organization ethically
employees will follow accordingly
because they're holding those protected
values
employees make better decisions in less
time with business ethics as their
guiding principles
this results in an increase in
productivity and a much higher employee
morale and pride in the company they
work for when employees can work in a
way that is based on honesty and
integrity the whole company benefits
employees who work for a corporation
that demands high standards of business
ethics in all areas of operation
they're more likely to perform tasks at
a higher level and are more likely to
have loyalty to an organization
business ethics doesn't only improve
employee morale loyalty and culture
it directly impacts the company's
short-term and long-term profitability
a company's reputation in the public
also plays a major role when looking for
investors
if a company is perceived as operating
unethically investors are less likely to
purchase stocks because
the reputation will then be associated
with them as well i hope this video gave
you a lot to think about when it comes
to ethical
decisions in your organization and the
effects it has on your employees
customers and your reputation
if you like this video let me know by
hitting that like button and subscribe
if you haven't already
let me know your thoughts on business
ethics if you have examples positive or
negative
on ethics in your workplace let me know
in the comments section below
that's all for today see you in the next
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