Professional Documents
Culture Documents
Ethics 2 Module
Ethics 2 Module
Ethics 2 Module
STRATEGIC MANAGEMENT,
TERMS & CONCEPTS,
BUSINESS ETHICS
Strategy Implementation
Profit?
Revenue?
Jobs?
Meet societys needs?
Something else?
THE CONCEPT OF
Old view:STAKEHOLDER
maximize stockholder value
neighbors
stockholders
vendors
competitors
& more . . .
Some examples . . .
STRATEGIC DECISION
MAKERS
Boards of Directors
Senior management
Roles, skills, tasks Elected by shareholders
Mission:
Protect interests of owners
Hire -- and fire -- top manageme
Approve management initiative
Trends:
Codetermination-GER/SWED
Board responsibility-CONFLICT OF INTER
Board activism-Share Activisim-Carl Ich
Strong owners, e.g., mutual funds(FIDE
BUSINESS ETHICS
The stories are always slightly different; but they have a lot in com
theyre full of the oldest questions in the world, questions of huma
human judgment applied in ordinary day-to-day situations.
Mark Hurd
CEO of HP after Carly Fiorina
Low profile, no-nonsense, strategy execution
forte
Highly successful
Increasing market shares for computers and
printers
Stock rose 110% (well above that of NASDAQ)
128
Manville Corporation
A few years ago, Manville (then Johns
Manville) was solid enough to be included
among the giants of American business.
Manville turned over 80%of its equity to a
trust representing people who have sued or
plan to sue it for liability in connection with
one of its principal former products,
asbestos.
For all practical purposes, the entire
company was brought down by
questions of corporate ethics.
WHY BE ETHICAL?
four rationalizations that people have relied on through
the ages to justify questionable conduct:
believing that the activity is not really illegal or
immoral;
that it is in the individuals or the corporations best
interest;
it will never be found out; or
1. that
Moral
reasons
that because it helps the company the company will
condone it.
2. Self-interest
3. Financial well-being
4.Retain autonomy
An ethical strategy is a strategy,
or course of action, that does
not
violate
these
accepted
principles.
)-
vary-American
Schools of Thought
Ethical Universalism
Ethical Relativism
Self-dealing
Information manipulation
Anticompetitive behavior
Opportunistic exploitation
Environmental degradation
Corruption
Rights Theories:
Recognizes that human beings have fundamental rights and privileges that transcend
national boundaries and cultures. These rights establish a minimum level of morally
acceptable behavior
Justice Theories
Focus on the attainment of a just distribution of economic goods and services that is
considered to be fair and equitable. It is a decision is just and ethical if people would allow
for it when designing a social system under a veil of ignorance
Behaving Ethically
To make sure that ethical issues are considered
in business decisions, managers should:
1.
2.
3.
4.
5.
6.
7.
1220
Stakeholders Approach
Lessons
1221
EXHIBIT 12.2
1
ly
n
O
5%
of
e
tiv
u
ec
x
e
h
g
hi
1222
Ethical Universalism
Ethical Universalism
The most important concepts of what is
right and wrong are universal and
transcend culture, society, and religion
Results in a set of universal ethical
standards that apply to members of all
societies, all companies, and all
businesspeople
Sets limits and puts boundaries on ethical
behavior
Ethical Relativism
Ethical Relativism
Differing religious beliefs, customs and
behavioral norms across countries and
cultures give rise to multiple sets of standards
concerning what is ethically right or wrong
What is ethical or unethical depends on the
prevailing local ethical standards and can vary
from one nation to another
There can be multiple sets of ethical standards
There is no one-size-fits-all set of ethical
norms
Immoral Managers
Are actively opposed to or have no
regard for ethical standards in
business behavior
Amoral Managers
Do not pay attention or are blind to
business ethics or believe that
business and ethics dont mix
Compliance approach
Put a compliance system in place to control ethical
behavior
E EFFECT
as a SUPERMAJOR in its industry has
oved from the highest earnings p
arrel to the lowest falling
hind Shell,exxon And Chevron Corp.
Freemans Stakeholders
theory
The core idea of stakeholder theory is that
organizations that manage their stakeholder
relationships effectively will survive longer and
perform better than organizations that don't.
Freeman suggests that organizations should develop
certain stakeholder competencies. These include:
Making commitment to manage stakeholders
interest
Developing strategies to effectively deal with
stakeholders and their interest.
Dividing and categorising interest into manageble
segments.
Ensuring that the organisations function address
the needs of the stakeholders
Approaches to Stakeholders
Win-Win
Approachcollaborative
outcomes making moral decisions that
benefit the common good of all
constituencies with the constraints of
justice, fairness and economic interest.
Possible???
Zero-Sum Approach: Winners and
losers in complex situations where the
perceived zero-sum game due to
limited resources
Clutter buck's
institutional
and
control
Set a clear example
Publish a codeapproach
of ethics
oriented
Prudential case!!
High ethics /success /survival- no
guaranteed.
PROFIT STILL COME FIRST
sometimesdo well economically too
with low ethics.
Carmichael and Drummond says.
High-ethics, low-profit organization
do no survie.High profit and low ethics
organization should not survive