The 4 Partners Mod 4 Part 4

Summary

The video script emphasizes the importance of ethical management in business, highlighting the four key partners: employees, customers, the environment, and shareholders. It challenges the notion that one's ethics should be determined by others' behavior, advocating for personal integrity regardless of external influences. The script uses examples like the 'Heinz Dilemma' and a factory renovation to illustrate the importance of considering stakeholders' needs and making decisions that align with ethical values. It concludes with a five-step process for ethical decision-making in business, emphasizing the need for clear issue definition, stakeholder identification, factual analysis, and ethical option evaluation.

Takeaways

• 🤝 The critical four partners of a company are employees, customers, the environment (materials and resources), and shareholders.
• 🔍 Ethical management involves asking if one's own honesty depends on the honesty of others, and making decisions that reflect personal integrity regardless of others' actions.
• 🌟 The needs of the many should outweigh the needs of the few, a principle that guides ethical decision-making, as illustrated by the famous 'Star Trek' quote.
• 💡 Ethical leaders don't require others to be ethical first; they lead by example, considering how they want to be perceived in the public eye.
• 🤔 Philanthropy isn't always the ultimate ethical act; it's essential to consider the needs of all partners before making charitable donations that might neglect internal stakeholders.
• 🏭 A real-life example of ethical decision-making in a factory involved consulting with employees about installing air conditioning, showing the importance of considering partners' preferences.
• 💊 The Heinz dilemma highlights the need to consider all stakeholders' perspectives, including asking the wife if she would want her husband to steal the drug to save her life.
• ✋ The importance of defining issues correctly to avoid incorrect solutions, as seen in the Coca-Cola 'New Coke' fiasco, is emphasized.
• 👥 Identifying stakeholders and understanding how they are affected by a situation is crucial for ethical decision-making.
• 📋 Descriptive facts, rather than opinions or feelings, are key to understanding the situation and making informed ethical decisions.
• 🛠️ Ethical management involves evaluating reasonable options and their moral implications to address issues effectively and responsibly.

Q & A

What are the four critical partners of a company according to the speaker?

The four critical partners of a company mentioned by the speaker are the employees, the customers, the environment (materials required for the product or service), and the shareholders.

How does the speaker define an ethical manager?

An ethical manager, according to the speaker, is someone who does not require others to be ethical first. Instead, they lead by example and consider what they would want to be said about them if their actions were reported in the newspaper.

What is the significance of the 'needs of the many outweigh the needs of the few' quote from Star Trek?

The quote signifies the ethical principle of prioritizing the greater good over individual interests, which the speaker relates to the responsibility each person has to make ethical decisions, regardless of others' actions.

Why does the speaker argue that philanthropy might not always be ethical behavior?

The speaker argues that philanthropy might not be ethical if it disregards the needs of the company's partners, such as employees. It's important to consider the impact on all stakeholders before making decisions like donating to charity.

What is the Heinz ethical dilemma mentioned in the script?

The Heinz ethical dilemma is a thought experiment where a man must decide whether to steal a life-saving drug that is prohibitively expensive for his wife, raising questions about the morality of breaking the law for personal gain.

How did the factory owner in Montreal address the issue of installing air conditioning?

The factory owner in Montreal consulted with the female workers and learned they preferred not to have air conditioning installed due to health concerns. Instead, they requested overhead fans for better air circulation.

What is the importance of involving stakeholders in decision-making according to the script?

Involving stakeholders in decision-making is crucial because it ensures that the decisions made consider the needs and preferences of all partners, leading to more ethical and effective outcomes.

What is the role of Starbucks as an example in the context of ethical management?

Starbucks is used as an example to illustrate a company that not only pursues profits but also values ethical management, as demonstrated by their support for farmers, matching donations, and providing health care to part-time employees.

What are the five steps for processing ethical issues in business as outlined in the script?

The five steps for processing ethical issues in business are: defining the issue, identifying stakeholders, developing key descriptive facts, considering reasonable options, and understanding the moral implications.

How does the speaker relate the Coca-Cola formula change to the importance of defining issues correctly?

The speaker uses the Coca-Cola formula change as an example of how defining the issue incorrectly can lead to disastrous consequences. Coca-Cola changed their formula in response to taste tests favoring Pepsi, but this decision led to significant financial loss when consumers rejected the new formula.

What is the difference between descriptive and normative facts in the context of the script?

Descriptive facts are observable and objective pieces of information obtained from a situation, while normative facts are based on opinions, feelings, or beliefs. The speaker emphasizes the importance of focusing on descriptive facts to make ethical business decisions.

Outlines

00:00

🤝 The Four Partners of a Company

The speaker emphasizes the importance of considering four key partners in a company: employees, customers, the environment, and shareholders. They argue that being an ethical manager is crucial and involves asking whether one's honesty depends on others' honesty. The speaker uses the example of the movie 'Star Trek' to illustrate the ethical dilemma of balancing individual needs with the needs of many. They also discuss the importance of personal responsibility and ethical leadership, suggesting that one should consider how they would want to be portrayed in the media if their actions were publicized. The speaker challenges the notion of philanthropy as the ultimate ethical act, suggesting that it might be more ethical to prioritize the needs of company partners over charitable donations.

05:00

🏭 Ethical Decision-Making in a Factory

The speaker tells a story about a factory owner who, while renovating and adding a fourth floor to his factory, faced the decision of whether to install an air conditioning system. Despite the common assumption that employees would want air conditioning, the owner chose to consult with his employees. The workers, mostly women sewing garments, decided against air conditioning due to health concerns and the potential impact on their income if they fell sick. Instead, they requested overhead fans for better air circulation. This decision saved the company significant costs and respected the workers' preferences, highlighting the importance of considering the needs and opinions of all partners in ethical decision-making.

10:01

☕️ Starbucks as an Ethical Company Model

The speaker uses Starbucks as an example of a company that balances profit with ethical practices. They mention that Starbucks matches donations, supports farmers, and provides health care to part-time employees, demonstrating a commitment to nurturing a culture that values its employees as key partners in the company's success. The speaker argues that ethical management often leads to more successful outcomes and aligns with a manager's responsibility to maximize profits. They introduce a five-step process for ethical decision-making in business: defining the issue, identifying stakeholders, developing key descriptive facts, evaluating reasonable options, and considering the moral implications of each option.

15:02

🔍 Steps for Ethical Problem Solving

The speaker outlines a five-step process for addressing ethical dilemmas in business. The first step is to accurately define the issue to avoid incorrect solutions. The second step involves identifying stakeholders and understanding how they are affected. The third step is to gather key descriptive facts, which are observable and not based on opinions or feelings. The fourth step is to consider the reasonable options for resolving the issue. The final step is to evaluate the moral implications of each option to make an ethical decision. The speaker emphasizes that this structured approach can be applied to any business problem to achieve wise and ethical outcomes.

Keywords

💡Ethical Manager

An 'Ethical Manager' refers to a leader who makes decisions based on principles of right and wrong, considering the impact on all stakeholders. In the video, the concept is central as it discusses the importance of ethical leadership in business, emphasizing that a true ethical leader does not require others to be ethical first but leads by example. The speaker challenges the notion that one must respond in kind to dishonesty, suggesting instead that ethical behavior is a personal choice that should guide decision-making.

💡Stakeholders

Stakeholders are individuals or groups who have an interest or stake in a company's actions and decisions. The video underscores the importance of considering all stakeholders, including employees, customers, the environment, and shareholders, in ethical decision-making. The speaker uses the example of a factory renovation to illustrate how involving stakeholders in decisions can lead to more considerate and effective outcomes.

💡Integrity

Integrity in the context of the video means being honest and having strong moral principles. It is linked to the ethical manager's ability to make decisions that are not only honest but also consistent with one's values. The speaker poses the question of whether one's honesty is dependent on others' honesty, suggesting that true integrity is demonstrated through one's own actions, regardless of others' behavior.

💡Responsibility

Responsibility here refers to the obligation or duty to act in a way that is accountable and considerate of the impact on others. The video discusses how each individual has the capacity to be responsible and must choose whether to honor this responsibility. The speaker uses the example of philanthropy to argue that ethical behavior involves considering the needs of all partners before making decisions, such as donating to charity versus improving workplace conditions.

💡Partnership

Partnership, as used in the video, signifies the relationship between a company and its stakeholders, emphasizing mutual respect and consideration. The speaker argues that treating employees as partners, rather than mere workers, leads to a more ethical and successful business. The factory renovation story illustrates how involving employees as partners in decision-making can result in choices that benefit everyone involved.

💡Ethical Dilemma

An 'Ethical Dilemma' is a situation that requires a choice between options that involve conflicting ethical principles or values. The video presents the Heinz Dilemma as an example, where a man must decide whether to steal a life-saving drug for his wife. The speaker emphasizes the importance of considering all stakeholders' perspectives, including the wife's, in resolving ethical dilemmas.

💡Philanthropy

Philanthropy is the act of donating to or supporting good causes, often involving charitable giving. In the video, the concept is discussed in the context of ethical behavior, where the speaker questions whether philanthropy is always ethical. The example given is whether a company should donate to charity or invest in improving its employees' working conditions, suggesting that ethical decisions should prioritize the needs of all stakeholders.

💡Starbucks

Starbucks is mentioned in the video as an example of a company that balances profit with ethical practices. The speaker highlights how Starbucks matches donations, supports farmers, and provides healthcare to part-time employees, demonstrating a commitment to ethical management and recognizing employees as key partners in the company's success.

💡Ethical Leadership

Ethical Leadership is the practice of leading with integrity and ethical principles. The video discusses how ethical leaders do not rely on others to be ethical first but instead lead by setting an example. The speaker suggests that ethical leadership is not only about personal integrity but also about considering the needs and values of all stakeholders in decision-making.

💡Decision-Making

Decision-Making in the video is portrayed as a process that should be guided by ethical considerations and an understanding of all stakeholders' needs. The speaker outlines a five-step process for dealing with ethical dilemmas in business, emphasizing the importance of defining the issue correctly, identifying stakeholders, gathering factual information, considering reasonable options, and evaluating moral implications.

Highlights

The critical four partners of a company are employees, customers, the environment, and shareholders.

An ethical manager must answer the question of whether they need others' honesty to be honest themselves.

The famous 'Star Trek' quote 'The needs of the many outweigh the needs of the few' is used to illustrate ethical decision-making.

Ethical leadership is about personal responsibility and not relying on others' ethics.

Philanthropy can be questioned as ethical behavior if it neglects the needs of company partners.

A real-life example of a factory owner prioritizing employee needs over installing air conditioning.

The Heinz ethical dilemma is discussed to highlight the importance of considering all stakeholders' perspectives.

The importance of asking stakeholders their preferences before making ethical decisions.

Starbucks is cited as a company that values ethical management and recognizes employees as key partners.

Ethical management often leads to more successful results and aligns with a manager's responsibility to maximize profit.

Five steps for ethical decision-making in business are outlined.

Defining the issue correctly is crucial for finding the right solution.

Identifying stakeholders and understanding how they are affected by an issue is key in ethical decision-making.

Descriptive facts, as opposed to normative facts, are essential for making informed ethical decisions.

Developing reasonable options and understanding their moral implications is part of the ethical decision-making process.

Ethical dilemmas should be approached by considering the needs and wishes of all partners involved.

Transcripts

this week we're going to talk about

the four partners i've mentioned this

subject

a number of times i just wanted to

elaborate

on it a little bit more

as far as i'm concerned the critical

four

partners of a company

are the employees

the customers

the environment that we're in and by

that i mean the materials

that we require in order to make our

product or if there's a service

and finally and not unimportantly

the shareholders so those are the four

partners that i talk about integrating

all the time

now in order to act as an ethical

manager there is a singular

basic question that every one of us

needs to answer

and that is do we need the

honesty

of another person or another individual

in order for us to be honest

by that i mean if

the other person is deceptive or

dishonest

or tricky does that mean that i have to

now become

deceptive tricky and dishonest

and that's at the core of many decisions

that type of question you know in the

movie star trek

famous scene where spock is

sacrificed his life in order to save

the crew the famous line that he says to

kirk from behind this glass wall that

has him in this totally polluted chamber

is the needs of the many

outweigh the needs of the few

the needs of the many

outweigh the needs of the few

each of us is given the ability to be

responsible

we have a choice as to whether we

take that need to be responsible

and honor it or cast it aside

as an ethical leader

if you need other people to be ethical

first

you'll never be an ethical leader

because there always will be

some common denominator that is less

ethical than you

so the best model that you can adopt is

if the newspaper we're going to come out

tomorrow with my picture on the front

page

what do i want it to say about me

not about the other person because i

don't care about what it says about the

other person

i care about what it says about

me

for example many people believe that

philanthropy is the ultimate ethical

behavior

you're giving away money to charity star

foundation the children's wish

foundation cancer research

let's give money to all these different

organizations

and many many more

is that ethical behavior that may

totally be unethical behavior

why because if i am to consider

the needs of my partners

before the needs of this charity which

is not my partner

i would have to at the least

ask them what they think

maybe they don't want me to give money

to the wish foundation maybe the

employees need to have

bathrooms that are updated and instead

of giving

a hundred thousand dollars to the cancer

research

i should be giving a hundred thousand

dollars to fix the toilets

i have to conduct my decision making

in that way i'll just tell you a quick

story a friend of mine had a big factory

um in montreal three floors

they were renovating the factory they

were putting on a fourth floor because

business

was exceptional

so when it came to a building the fourth

floor

i mean they knew what they had to put in

in terms of production and equipment and

everything of that sort

but now there was an opportunity

to install an air conditioning system

which they did not have before because

the building when it was originally

built

there was no air conditioning put in so

now they have the opportunity to put air

conditioning in

approximately a thousand women

worked in this factory

sewing different garments

what would you do would you put in

the uh the air conditioning

most people ask them that questions like

of course

sure let me give the employees something

but they didn't do that they didn't do

that

i'll give you another question

it's a famous ethical dilemma called the

heinz ethical dilemma

man's wife

is suffering from an incurable disease

well it's curable but it's a horrible

disease

that'll kill her

he hears that there's a pharmacist in

town

who has discovered what appears to be

the cure

he goes to the pharmacist and he says

i'd like to buy this pill from my wife

because she's got

this disease the pharmacist says it's

eight thousand dollars for the pill

the guy says whoa that's a lot of money

i don't have eight thousand dollars

can i write you um

five checks over the next five months

for the eight thousand dollars nope

i need the eight thousand dollars up

front or don't bother

asking for the pill don't let the door

hit you on the way out

guy walks in what can he do

comes back goes to his family tries to

get the money

he can't come up with more than four

thousand dollars goes back to the

pharmacist and look i got four grand

let me give you a chat let me give you

five checks eight hundred dollars

and you'll have and you'll have the

other four grand over the next five

months

i need to save her life

no you got the eight grand come back and

see me

so the ethical question is should he

should he steal

the drug now most people have this whole

discussion about this

should he steal the drug yes no

yes all kinds of conditions come in

about this question the one thing that

nobody mentions in any of the classes is

ask the wife

what does she want she's a partner in

this

if he steals the drug and he gets caught

so she doesn't get the drug

she may die alone he goes to jail

what if they have kids now their kids

are basically orphaned

ask the wife that's what an

ethical person would do similarly

with my buddy and his factory he called

all the women or he called

a group of the women together he said

look this is what we're doing

this is what we'd like to do for you is

that what you want

they talked about it they thought about

it they came back to him

a month later they said you know what

we've all talked about it we voted on it

we would rather you did not put in the

air conditioning system

why because if

you put the air conditioning system in

it's possible that

when we come from the hot summer weather

into the cold air-conditioned

temperature we'll get sick

and if we get sick we won't be able to

come to work and if we can't come to

work

then we won't get paid as much money so

we'd rather be able to come here and

come to work and do our jobs

than sit in air-conditioned comfort

however

what we would like that would be very

helpful are if you could install the

overhead fans and maybe some other fans

to just circulate the air so at least

it's not

um sort of sitting on us that's what he

did

saved him 250 000 for the air

conditioning which he was willing to

spend

because they were his employees and he

loved them

when we have partners that's what we're

talking about

i've mentioned the company starbucks

before

starbucks is not a company that says you

know we're not we're not interested in

making any money

oh my gosh they have

uh profit gold that they

expect to meet but they also want

quote unquote everybody to live their

values they want people to be able to

come

to work and be the same people that were

sitting at home in the suburbs of

seattle

with the same values and the same

beliefs and the same ability to help

people

that's why they match the donations

they support the farmers they report

uh in a social utility format they give

health care to the part-timers and et

cetera et cetera

they're doing that in order to nurture a

culture

and to nurture an environment

that recognizes their employees as a key

partner

in the success of the company

now there's no such thing as a perfect

system there's

always going to be bad apples that's

without a doubt

but there is absolutely no question if

you look

at the data and if you look at

all the different companies that i'm

going to be talking to about

if you look at them

and understand

that ethical management creates more

successful results on many levels

most of the time and since your

responsibility as a manager

is to approach the ethical dilemma

and the corporate challenge as making

the most amount of money

being an ethical manager just plain and

simple

makes sense now one of the things i want

to talk

to you about is as an ethical manager

how do you actually process

wise deal with those issues

so there are five steps that apply to

every single problem you can you can

encounter in the business world and you

just have to apply the same five steps

and you'll come up with wise results

you must be able to define what the

issue is

defining the incorrect issue

leads to the incorrect solution

obviously

if you recall the story with coca-cola

and the taste tests with pepsi in the

late 1980s

and the fact that coca-cola as a as a

response

to the fact that every taste test gave

pepsi the number one slot changed their

formula

and then found out that they lost 300

million dollars in less than a month

because people didn't want the new

coca-cola that was sweeter

they wanted their same old coke

otherwise they could drink pepsi

so you have to be able to define the

issue properly

we've just been talking about

stakeholders

you have to be able to now identify

stakeholders

the partners and how they are

affected by

the situation that you've just defined

as the issue

so if you recall the story that we did

with the um with the sadhu

i think it's actually coming up so the

sadhu

is a character who could die

on the top of the mountain that's how

he's affected

so that's what we're talking about how

are you affected

the third thing you have to develop are

what are the key

descriptive facts and why are they

important

now a descriptive fact is not a

normative fact

it's not an opinion or a feeling or an

insight or no matter what you think

it's observable information that you get

from the particular situation that

you're in

text messages emails video camera

footage

whatever you've got as a descriptive

information in fact once you have these

three bits of information

you have the entire story what's wrong

who's involved

what what happened then you have two

management issues to deal with

what are the reasonable options because

you may have

two or three different choices or four

or five

that can resolve this issue

and which one are you going to do

from an ethical perspective ethics as

you know

is a study of morality so you will have

had to have figured out what the moral

implication is

of this particular issue that you're

dealing with

once you've done that you then can

tackle any company

any problem any issue

and give an ethical response to that

situation