Chapter 1

An Overview of Ethics

Chapter 1 - An Overview of Ethics

Chapter 1 - Objectives
1.
2.
3.
4.
5.
6.

To understand ethics and why they are important

in ways that are consistent with a code of
principles.
Understand why business ethics are becoming
increasingly important.
Identify what actions corporations are taking to
reduce business ethics risks.
Understand why corporations are interested in
fostering good business ethics.
Identify different approaches to ethical decision
making.
Discuss the risk of negative impact due to the
unethical use of information technology.

Chapter 1 - An Overview of Ethics

Ethics Defined
Moral codes are the rules that
establish the boundaries of
generally accepted behavior.
Morality refers to social
conventions about right and
wrong human conduct.
Ethics are beliefs regarding right
and wrong behavior.
Chapter 1 - An Overview of Ethics

Ethics Defined
Virtues are habits that incline us
to do what is acceptable.
Vices are habits that incline us
to do what is unacceptable.
Value System is the complex
scheme of moral values that we
choose to live by.
Chapter 1 - An Overview of Ethics

The Importance of Integrity

Integrity is used to refer to people
who act in ways that are consistent
with their own code of principles.
You often reflect on your principles
when you consider what you
ought to do in different
situations.
Chapter 1 - An Overview of Ethics

Ethics in the Business

World
Globalization of organizations
has created a complex business
world.
Risk is the likelihood of a
negative event times the impact
of the event.

Chapter 1 - An Overview of Ethics

Why Business Ethics are

Important
Protect the organization and its
employees from legal action.
Create an organization that
operates consistently.
Produce good business.
Avoid unfavorable publicity.
Gain the goodwill of the community.
Chapter 1 - An Overview of Ethics

Legal Overview
Bribes involve providing money,
property, favors, or anything else
of value to someone in business or
government in order to obtain a
business advantage.
Gifts are made openly and publicly
as a gesture of friendship or
goodwill with no expectation of a
future favor for the donor.
Chapter 1 - An Overview of Ethics

Improving Corporate Ethics

Appoint a corporate ethics officer.
Ethical standards should be set by a
board of directors.
Establish a corporate code of conduct.
Conduct social audits.
Require employees to take ethics
training.
Include ethical criteria in employee
appraisal/reward systems.
Chapter 1 - An Overview of Ethics

Code of Conduct
A guide that highlights an
organizations key ethical issues and
identifies the overarching values and
principles that are important to the
organization and that can help in
decision making.
The code of conduct helps ensure that
employees:
Abide by the law.
Follow necessary regulations.
Behave in an ethical manner.
Chapter 1 - An Overview of Ethics 10

Ethical Decision Making

1. Get the facts.
2. Identify the stakeholders and their
positions.
3. Consider the consequences of your
decision.
4. Weigh various guidelines and principles
(Virtue, Utilitarian, Fairness, Common
Good).
5. Develop and evaluate options.
6. Review your decision.
7. Evaluate the results of your decision.
Chapter 1 - An Overview of Ethics 11

Four Common Approaches Used

in Ethical Decision-Making
Approach to
Dealing with
Moral Issues

Principle

Virtue Approach

The ethical choice is the one that best

reflects moral virtues in ourselves and our
community.

Utilitarian Approach

The ethical choice is the one that produces

the greatest excess of benefits over harm.

Fairness Approach

The ethical choice is the one that treats

everyone the same and does not show
favoritism or discrimination.

Common Good
Approach

The ethical choice is the one that

advances the common good.

Table 1.5

Chapter 1 - An Overview of Ethics 12

Ethics in Information
Technology

The increased use of information

technology has raised many
ethical issues for todays IT
professional.

Licensing of IT professionals
Internet communication
Intellectual property
Employee/employer issues
Chapter 1 - An Overview of Ethics 13

Summary
Ethics are beliefs regarding right and
wrong behavior.
Business ethics are becoming increasingly
important because the risks associated
with inappropriate behavior have grown.
Corporations are interested in fostering
good business ethics:
1.
2.
3.
4.
5.

Protect the company and employees from legal action.

Create an organization that operates consistently.
To produce good business.
To avoid negative publicity.
To gain the good will of the community.

Chapter 1 - An Overview of Ethics 14

Summary
Ethical decision making process:
1.
2.
3.
4.
5.
6.
7.

Get the facts

Identify shareholders and their positions
Consider the consequences
Weigh guidelines and principles
Develop and evaluate options
Review your decision
Evaluate the results of your decision

The growth of use in IT has also

increased the risk of unethical
uses of IT.
Chapter 1 - An Overview of Ethics 15

Case 1
Missing White House Email

E-mail problems in the Clinton

White House became public in
February 2000 through a $90
million class-action suite filed by
Judicial Watch, a conservative
group that had dogged the
Clinton administration with a
number of lawsuits since 1994.
Chapter 1 - An Overview of Ethics 16

Case 2
McKesson HBOC Accused
of Accounting Improprieties
HBOC delivered cost effective
patient information and hospital
data collection systems.
Accounting irregularities and
questionable business practices
resulted in a loss in stock prices
and many other legal problems.
Chapter 1 - An Overview of Ethics 17