Ethics and C.

Governance
chapter 3 & 4
Maureen N ; Matthew R
Topic : EDM Philosophy &
EDM framework
Why Individuals Needs to be Ethical?
Views about Religion Maintain Relationship with People Perception about Ourselves

Religion Golden Rule Sympathetic Identification Morality & Self Interest

The Ethical Reasoning Process
Ethics, Business, and The Law

1. Business act without law/ethics

2. Unrelated laws with business/ethics
3. Ethics unrelated to business/ethics and not illegal
4. Rules that business have to follow
5. Business activity and ethical norms
6. Similar Law and Ethics
7. Intersection of business, law and ethics
 EDM Theories / Philosophy
UTILITARIANISM DEONTOLOGY VIRTUE JUSTICE/
FAIRNESS
holds that an act is morally Some actions are Virtue ethics emphasizes
Procedural: concern on how
right if and only if that act inherently right or wrong, the development of a good
the justice is administered;
maximizes regardless of their moral character as central
following law is the
the net good. outcomes. to ethical behavior.
application. Business
application example is
an act is ethical if its “Don't lie. Don't steal. "How would a fair person
SOP.
favorable Don't cheat.” act?"
Distributive: Equal treated
consequences outweigh its
equally, unequals treated
negative consequences motives >> consequences What character is best?
unequally. Judgement is
important to determine.
EDM Framework
 Apple Case 2007 (pg. 173)

Case Overview:

In 2007, Steve Jobs reduced the iPhone price by $200 from $599 which cause a
breakout of anger from the customer whom paid the initial price of $599.
 EDM Theories Applied
UTILITARIANISM
h There is no product
dissatisfaction to whoever
bought the iPhone at any
prices available, but, there
is dissatisfaction to the
price
DEONTOLOGY
The only relevant
aspect is that the decision
maker knows
the difference between
overcharging and
production efficiencies and
that the decision
maker makes a rebate in
the former
case but not in the latter.
VIRTUE JUSTICE/
FAIRNESS
Virtue ethics focuses on If the customer only buy it
the moral character for one time, it is not equal
of the decision maker in the side of justice and
fairness.
depending on which On the other hand, it has to
characteristic you’re be seen from other side
viewing this case your that the initial product
answer will be different cost differences can
produce the iPhone more
efficient or not.
Stakeholder
Impact Analysis
Stakeholder Impact Analysis (contd.)
 Just Make the
Numbers! (pg. 233)
The CEO, Don Chambers, and the CFO, Ron Smith, were in a heated
discussion due to disappointing sales and margins. Pressure from stock
market analysts intensified as other companies faced scrutiny for not
meeting expectations. In frustration, Don urged Ron to manipulate
financial assumptions or capitalize expenses to meet quarterly targets,
despite knowing that the situation would likely improve next year. Don
abruptly left Ron's office after issuing the directive
 Things to Consider :
• Consequences of manipulation on all the stakeholders.

•Professional standards regarding accounting manipulation - including

legal, and reputation impact.

• Legal and other risks as demonstrated by the impact on other companies

that chose to manipulate data in order to meet investor "expectations."

a disregard for ethical and legal standards. By not being transparent about the company's true financial performance and
attempting to manipulate the numbers, stakeholders may be misled and the company's credibility can be compromised.
 EDM Philosophies applied
UTILITARIANISM DEONTOLOGY VIRTUE
weigh the potential what is morally right Honesty: Being truthful
...................
benefits of avoiding regardless of the outcome. and transparent in
immediate negative Therefore, even though financial reporting.
consequences against the refusing the instruction
substantial risks of long- might have negative Integrity: Maintaining
term harm and loss of consequences, it would be strong ethical
trust, ultimately deciding considered the ethically principles and doing
which course of action correct action because it what you believe is
would create the greatest aligns with the identified right, even when
good for the largest duties. pressured.
number of people.
Thank you
very much!