The Importance of Business Ethics

Summary

In 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

00:00

🤔 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.

05:01

💼 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.

Keywords

💡Ethical Dilemmas

Ethical dilemmas are situations in which a person faces a difficult choice between two or more options that are, or seem, equally unfavorable or mutually exclusive. In the video, the example of receiving more money than due from a cashier illustrates an everyday ethical dilemma, where one must decide between personal gain and honesty. The video emphasizes the importance of considering the consequences of one's actions, such as the potential negative impact on the cashier.

💡Moral Code

A moral code refers to a set of principles or rules that guide an individual's or group's behavior. The video discusses how some individuals may not adhere to a moral code, prioritizing personal benefits over ethical behavior. This concept is central to the video's exploration of how ethical decisions affect individuals and organizations.

💡Cause and Effect

Cause and effect is a principle that describes how an action or event leads to another event or outcome. The video script uses this concept to discuss the potential consequences of unethical actions, such as a cashier having to compensate for their mistake or losing their job, which are direct effects of the cause of not handling transactions correctly.

💡Ethical Behavior

Ethical behavior refers to actions that are guided by moral principles and values. The video highlights the importance of ethical behavior in business, contrasting it with the negative outcomes of unethical actions. It suggests that companies with a strong ethical culture are more likely to succeed in the long term and maintain a positive reputation.

💡Fraud

Fraud is the use of deceit, trickery, or intentional dishonesty to gain an unfair advantage, typically to make a profit. The video cites examples of corporate fraud, such as Wells Fargo's unauthorized account creation and Volkswagen's emissions scandal, to demonstrate how unethical practices can damage a company's reputation and legal standing.

💡Employee Performance

Employee performance refers to the efficiency, productivity, and quality of work done by employees. The video script discusses how a lack of ethics can negatively impact employee performance by creating a culture of dishonesty and mistrust, leading to decreased productivity and increased errors.

💡Protected Values

Protected values are deeply held principles that individuals adhere to, even in the face of temptation or pressure to act unethically. The video uses the concept of protected values to explain why some individuals and companies maintain ethical behavior, despite the potential for personal gain through unethical actions.

💡Corporate Social Responsibility (CSR)

Corporate Social Responsibility (CSR) is a self-regulatory mechanism whereby a company spends time, effort, and resources to ensure that its operations are beneficial to society and the environment. The video mentions CSR in the context of how a company's ethical behavior can impact its public image and the trust of consumers and investors.

💡Reputation

Reputation refers to the beliefs or opinions that are generally held about someone or something. In the video, reputation is highlighted as a critical factor for businesses, as unethical actions can lead to long-lasting damage to a company's image, making it difficult to regain the trust of customers and investors.

💡Productivity

Productivity is the measure of the efficiency of production, typically in terms of the amount of work produced within a given period. The video argues that when businesses prioritize ethical behavior, it can lead to increased productivity, as employees are more motivated and make better decisions when guided by ethical principles.

💡Investors

Investors are individuals or entities that put money into financial assets or real estate, potentially funding businesses. The video script mentions that investors are less likely to invest in companies perceived as unethical, as it could reflect poorly on their own reputation and financial interests.

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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