Fluent Essays

This assignment is intended to improve your understanding of the concepts presented in Chapters 1 and 2, as well as help you understand the application of these concepts to leadership effectiveness. Answer the 3 questions on the Chapter 1 PDF and the 3 questions on the Chapter 2 PDF. Total of six (6) questions. Use attached PDF Chapter12.pdf for reference. chap12.pdf chapter_1.pdf chapter_2.pdf Unformatted Attachment Preview CHAPTER OBJECTIVES CHAPTER 1 • Explore conceptualizations of business ethics from an organizational perspective • Examine the historical foundations and evolution of business ethics • Provide evidence that ethical value systems support business performance • Gain insight into the extent of ethical misconduct in the workplace and the pressures for unethical behavior CHAPTER OUTLINE Business Ethics Defined Why Study Business Ethics? A Crisis in Business Ethics Specific Issues The Reasons for Studying Business Ethics The Development of Business Ethics Before 1960: Ethics in Business The 1960s: The Rise of Social Issues in Business THE IMPORTANCE OF BUSINESS ETHICS The 1970s: Business Ethics as an Emerging Field The 1980s: Consolidation The 1990s: Institutionalization of Business Ethics The Twenty-First Century of Business Ethics Developing an Organizational and Global Ethical Culture The Benefits of Business Ethics Ethics Contributes to Employee Commitment Ethics Contributes to Investor Loyalty Ethics Contributes to Customer Satisfaction Ethics Contributes to Profits Our Framework for Studying Business Ethics © ZoranKrstic/Shutterstock.com Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. AN ETHICAL DILEMMA* Sophie just completed a sales training course with one of the firm’s most productive sales representatives, Emma. At the end of the first week, Sophie and Emma sat in a motel room filling out their expense vouchers for the week. Sophie casually remarked to Emma that the training course stressed the importance of accurately filling out expense vouchers. Emma replied, “I’m glad you brought that up, Sophie. The company expense vouchers don’t list the categories we need. I tried many times to explain to the accountants that there are more expenses than they have boxes for. The biggest complaint we, the salespeople, have is that there is no place to enter expenses for tipping waitresses, waiters, cab drivers, bell hops, airport baggage handlers, and the like. Even the government assumes tipping and taxes them as if they were getting an 18 percent tip. That’s how service people actually survive on the lousy pay they get from their bosses. I tell you, it is embarrassing not to tip. One time I was at the airport and the skycap took my bags from me so I didn’t have the hassle of checking them. He did all the paper work and after he was through, I said thank you. He looked at me in disbelief because he knew I was in sales. It took me a week to get that bag back.” “After that incident I went to the accounting department, and every week for five months I told them they needed to change the forms. I showed them the approximate amount the average salesperson pays in tips per week. Some of them were shocked at the amount. But would they change it or at least talk to the supervisor? No! So I went directly to him, and do you know what he said to me?” “No, what?” asked Sophie. “He told me that this is the way it has always been done, and it would stay that way. He also told me if I tried to go above him on this, I’d be looking for another job. I can’t chance that now, especially in this economy. Then he had the nerve to tell me that salespeople are paid too much, and that’s why we could eat the added expenses. We’re the only ones who actually generate revenue and he tells me that I’m overpaid!” “So what did you do?” inquired Sophie. “I do what my supervisor told me years ago. I pad my account each week. For me, I tip 20 percent, so I make sure I write down when I tip and add that to my overall expense report.” “But that goes against company policy. Besides, how do you do it?” asked Sophie. “It’s easy. Every cab driver will give you blank receipts for cab fares. I usually put the added expenses there. We all do it,” said Emma. “As long as everyone cooperates, the Vice President of Sales doesn’t question the expense vouchers. I imagine she even did it when she was a lowly salesperson.” “What if people don’t go along with this arrangement?” asked Sophie. “In the past, we have had some who reported it like corporate wants us to. I remember there was a person who didn’t report the same amounts as the co-worker traveling with her. Several months went by and the accountants came in, and she and all the salespeople that traveled together were investigated. After several months the one who ratted out the others was fired or quit, I can’t remember. I do know she never worked in our industry again. Things like that get around. It’s a small world for good salespeople, and everyone knows everyone.” “What happened to the other salespeople who were investigated?” Sophie asked. “There were a lot of memos and even a 30-minute video as to the proper way to record expenses. All of them had conversations with the vice president, but no one was fired.” “No one was fired even though it went against policy?” Sophie asked Emma. “At the time, my conversation with the VP went basically this way. She told me that corporate was not going to change the forms, and she acknowledged it was not fair or equitable to the salespeople. She hated the head accountant because he didn’t want to accept the reality of a salesperson’s life in the field. That was it. I left the office and as I walked past the Troll’s office—that’s what we call the head accountant—he just smiled at me.” This was Sophie’s first real job out of school and Emma was her mentor. What should Sophie report on her expense report? QUESTIONS | EXERCISES 1. Identify the issues Sophie has to resolve. 2. Discuss the alternatives for Sophie. 3. What should Sophie do if company policy appears to conflict with the firm’s corporate culture? *This case is strictly hypothetical; any resemblance to real persons, companies, or situations is coincidental. Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Chapter 1: The Importance of Business Ethics 3 T he ability to anticipate and deal with business ethics issues and dilemmas has become a significant priority in the twenty-first century. In recent years, a number of wellpublicized scandals resulted in public outrage about deception, fraud, and distrust in business and a subsequent demand for improved business ethics, greater corporate responsibility, and laws to protect the financially innocent. The publicity and debate surrounding highly publicized legal and ethical lapses at well-known firms highlight the need for businesses to integrate ethics and responsibility into all business decisions. On the other hand, the majority of ethical businesses with no or few ethical lapses are rarely recognized in the mass media for their conduct, mainly because good companies doing business the right way do not generate media interest. Highly visible business ethics issues influence the public’s attitudes toward business and destroy trust. Ethically charged decisions are a part of everyday life for those who work in organizations at all levels. Business ethics is not just an isolated personal issue; codes, rules, and informal communications for responsible conduct are embedded in an organization’s operations. This means ethical or unethical conduct is the province of everyone who works in an organizational environment, from the lowest level employee to the CEO. Making good ethical decisions are just as important to business success as mastering management, marketing, finance, and accounting. While education and training emphasize functional areas of business, business ethics is often viewed as easy to master, something that happens with little effort. The exact opposite is the case. Decisions with an ethical component are an everyday occurrence requiring people to identify issues and make quick decisions. Ethical behavior requires understanding and identifying issues, areas of risk, and approaches to making choices in an organizational environment. On the other hand, people can act unethically simply by failing to identify a situation that has an ethical issue. Ethical blindness results from individuals who fail to sense the nature and complexity of their decisions.1 Some approaches to business ethics look only at the philosophical backgrounds of individuals and the social consequences of decisions. This approach fails to address the complex organizational environment of businesses and pragmatic business concerns. By contrast, our approach is managerial and incorporates real-world decisions that impact the organization and stakeholders. Our book will help you better understand how business ethics is practiced in the business world. It is important to learn how to make decisions in the internal environment of an organization to achieve personal and organizational goals. But business does not exist in a vacuum. As stated, decisions in business have implications for investors, employees, customers, suppliers, and society. Ethical decisions must take these stakeholders into account, for unethical conduct can negatively affect people, companies, industries, and society as a whole. Our approach focuses on the practical consequences of decisions and on positive outcomes that have the potential to contribute to individuals, business, and society at large. The field of business ethics deals with questions about whether specific conduct and business practices are acceptable. For example, should a salesperson omit facts about a product’s poor safety record in a sales presentation to a client? Should accountants report inaccuracies they discover in an audit of a client, knowing the auditing company will probably be fired by the client for doing so? Should an automobile tire manufacturer intentionally conceal safety concerns to avoid a massive and costly tire recall? Regardless of their legality, others will certainly judge the actions in such situations as right or wrong, ethical or unethical. By its very nature, the field of business ethics is controversial, and there is no universally accepted approach for resolving its dilemmas. Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. 4 Part 1: An Overview of Business Ethics All organizations have to deal with misconduct. Even prestigious colleges such as Harvard and Dartmouth are not exempt. Students at Dartmouth were disciplined for cheating on their attendance and participation in an undergraduate ethics course. Because the course used hand clickers registered to each student as a sign of attendance and participation, students who wanted to cut class would give their hand clickers to other classmates.2 Two administrators at the University of North Carolina at Chapel Hill oversaw courses where the students—often athletes—did not have to show up. The courses included lectures that never met spanning back to the 1990s. 3 Before we get started, it is important to state our approach to business ethics. First, we do not moralize by stating what is right or wrong in a specific situation, although we offer background on normative guidelines for appropriate conduct. Second, although we provide an overview of group and individual decision-making processes, we do not prescribe one approach or process as the best or most ethical. However, we provide many examples of successful ethical decision making. Third, by itself, this book will not make you more ethical, nor will it give you equations on how to judge the ethical behavior of others. Rather, its goal is to help you understand, use, and improve your current values and convictions when making business decisions so you think about the effects of those decisions on business and society. Our approach will help you understand what businesses are doing to improve their ethical conduct. To this end, we aim to help you learn to recognize and resolve ethical issues within business organizations. As a manager, you will be responsible for your decisions and the conduct of the employees you supervise. For this reason, we provide a chapter on ethical leadership. The framework we developed focuses on how organizational decisions are made and on ways companies can improve their ethical conduct. This process is more complex than many think. People who believe they know how to make the “right” decision usually come away with more uncertainty about their own decision skills after learning about the complexity of ethical decision making. This is a normal occurrence, and our approach will help you evaluate your own values as well as those of others. It also helps you to understand the nature of business ethics and incentives found in the workplace that change the way you make decisions in business versus at home. In this chapter, we first develop a definition of business ethics and discuss why it has become an important topic in business education. We also discuss why studying business ethics can be beneficial. Next, we examine the evolution of business ethics in North America. Then we explore the performance benefits of ethical decision making for businesses. Finally, we provide a brief overview of the framework we use for examining business ethics in this text. BUSINESS ETHICS DEFINED To understand business ethics, you must first recognize that most people do not have specific definitions they use to define ethics-related issues. The terms morals, principles, values, and ethics are often used interchangeably, and you will find this is true in companies as well. Consequently, there is much confusion regarding this topic. To help you understand these differences, we discuss these terms. For our purposes, morals refer to a person’s personal philosophies about what is right or wrong. The important point is that when one speaks of morals, it is personal or singular. Morals, your philosophies or sets of values of right and wrong, relate to you and you alone. Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Chapter 1: The Importance of Business Ethics 5 You may use your personal moral convictions in making ethical decisions in any context. Business ethics comprises organizational principles, values, and norms that may originate from individuals, organizational statements, or from the legal system that primarily guide individual and group behavior in business. Principles are specific and pervasive boundaries for behavior that should not be violated. Principles often become the basis for rules. Some examples of principles could include human rights, freedom of speech, and the fundamentals of justice. Values are enduring beliefs and ideals that are socially enforced. Several desirable or ethical values for business today are teamwork, trust, and integrity. Such values are often based on organizational or industry best practices. Investors, employees, customers, interest groups, the legal system, and the community often determine whether a specific action or standard is ethical or unethical. Although these groups influence the determination of what is ethical or unethical for business, they also can be at odds with one another. Even though this is the reality of business and such groups may not necessarily be right, their judgments influence society’s acceptance or rejection of business practices. Ethics is defined as behavior or decisions made within a group’s values. In our case we are discussing decisions made in business by groups of people that represent the business organization. Because the Supreme Court defined companies as having limited individual rights,4 it is logical such groups have an identity that includes core values. This is known as being part of a corporate culture. Within this culture there are rules and regulations both written and unwritten that determine what decisions employees consider right or wrong as it relates to the firm. Such evaluations are judgments by the organization and are defined as its ethics (or in this case their business ethics). One difference between an ordinary decision and an ethical one lies in “the point where the accepted rules no longer serve, and the decision maker is faced with the responsibility for weighing values and reaching a judgment in a situation which is not quite the same as any he or she has faced before.”5 Another difference relates to the amount of emphasis decision makers place on their own values and accepted practices within their company. Consequently, values and judgments play a critical role when we make ethical decisions. Building on these definitions, we begin to develop a concept of business ethics. Most people agree that businesses should hire individuals with sound moral principles. However, some special aspects must be considered when applying ethics to business. First, to survive and contribute to society, businesses must earn a profit. There is no conflict or trade-offs between profits and business ethics. For instance, Google, Texas Instruments, and Starbucks are highly profitable companies that have earned a reputation for ethical conduct.6 Second, to be successful businesses must address the needs and desires of stakeholders. The good news is the world’s most ethical companies often have superior stock performance.7 To address these unique aspects of the business world, society has developed rules—both legal and implicit—to guide businesses in their efforts to earn profits in ways that help individuals or society and contribute to social and economic well-being. WHY STUDY BUSINESS ETHICS? A Crisis in Business Ethics Business ethics has become a major concern in business today. The Ethics Resource Center conducts the National Business Ethics Survey (NBES) of more than 6,000 U.S. employees Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. 6 Part 1: An Overview of Business Ethics FIGURE 1–1 Global Trust in Industry Sectors 78\% Technology Automotive 71\% Food and Beverage 67\% Consumer Packaged Goods 66\% Telecommunications 63\% Pharmaceut ... Purchase answer to see full attachment