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Business Ethics


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Title: Business Ethics

Business Ethics Professional Responsibility
Unethical Behavior
  • Unethical behavior in business is not just a
    recent phenomenon
  • In the sixth century, B.C., the philosopher
    Anacharsis once said, The market is a place set
    apart where men may deceive one another.

Unethical Behavior
  • The Old Testament also talks about false
    balances (Amos 85 Hosea 127 Micah 611)
    despite Gods command against such (Lev. 1936
    Ezek. 4510)

Business Ethics
  • Business Ethics is about
  • Decision-Making
  • By People in Business
  • According to Moral Principles or Standards

  • Conflicting duties, loyalties or interests create
    moral dilemmas requiring decisions to be made

  • Ethical decision-making involves the ability to
    discern right from wrong along with the
    commitment to do what is right.

  • Some factors affecting decision-making (from
    Integrity Management, by D. T. LeClair et al,
    Univ. of Tampa Press, 1998)
  • Issue Intensity
  • (i.e. how important does the decision-maker
    perceive the issue to be?
  • Can be influenced by company/management
  • Decision-Makers Personal Moral Philosophy
  • Decision-Makers Stage of Moral Development
  • Organizational Culture

  • 8 Steps to Sound, Ethical Decision-Making
  • 1. Gather as many relevant material facts as
    circumstances permit.
  • 2. Identify the relevant ethical issues (consider
    alt. viewpoints)
  • 3. Identify, weigh prioritize all the affected
    parties (i.e. stakeholders) (see Johnson
    Johnson Credo, Taking Sides, p.25)
  • 4. Identify your existing commitments/obligations.
  • 5. Identify various courses of action (dare to
    think creatively)
  • 6. Identify the possible/probable consequences of
    same (both short long-term)
  • 7. Consider the practicality of same.
  • 8. Consider the dictates and impacts upon your
    character integrity.

  • Disclosure Test How comfortable would I feel if
    others, whose opinion of me I value, knew I was
    making this decision?

  • The higher the level of a decision-maker
  • the greater the impact of the decision
  • and the wider the range of constituencies that
    will be affected by the decision.

By People In Business
  • The moral foundation of the decision-maker
  • He doesnt have a moral compass. Whistleblower
    Sherron Watkins describing Andrew Fastow, former
    CFO of Enron. (Watkins gets frank about days at
    Enron, Edward Iwata, USA Today, March 25, 2003,
    p. 3B.)

By People in Business
  • Ultimately, one's own motivation for ethical
    behavior must be internal to be effective.
    External motivation has a limited value --
    punishment and fear is only effective in the
    short-run. If people believe that they are above
    the law, they will continue to act unethically.
    Organizations that have a clear vision, and
    support individual integrity are attractive
    places of employment. - Teri D. Egan, Ph.d,
    Associate Professor, The Graziadio School of
    Business at Pepperdine University, Corporate
    Ethics, Washington Post Live Online, Friday, Aug.
    2, 2002

  • Values guiding constructs or ideas, representing
    deeply held generalized behaviors, which are
    considered by the holder, to be of great
  • Morals a system or set of beliefs or principles,
    based on values, which constitute an individual
    or groups perception of human duty, and
    therefore which act as an influence or control
    over their behavior. Morals are typically
    concerned with behaviors that have potentially
    serious consequences or profound impacts. The
    word morals is derived from the Latin mores
    (character, custom or habit)
  • Ethics the study and assessment of morals. The
    word "ethics" is derived from the Greek word,
    ethos (character or custom).

  • The most important human endeavor is the
    striving for morality in our actions. Our inner
    balance and even our very existence depend on it.
    Only morality in our actions can give beauty and
    dignity to life. - Albert Einstein (in a letter

  • The historian Arnold Toynbee observed "Out of 21
    notable civilizations, 19 perished not by
    conquest from without but by moral decay from

Absolutism vs. Relativism
  • Ethical Absolutism What is right or wrong is
    consistent in all places or circumstances. There
    are universally valid moral principles. ( only
    by obedience to universal moral norms does man
    find full confirmation of his personal uniqueness
    and the possibility of authentic moral growth. -
    Pope John Paul II, see also Rom. 122 Heb. 138)
  • History is a voice forever sounding across the
    centuries the laws of the right and wrong.
    Opinions alter, manners change, creeds rise and
    fall, but the moral law is written on the tablets
    of eternity. James A. Forude

Absolutism vs. Relativism
  • Ethical Relativism (also called Situational
    Ethics) What is right or wrong varies according
    to the individual/society/culture or set of
    circumstances. There are no universally valid
    moral principles. (Related Biblical reference
    "everyone did what was right in his own eyes"
    (Deut. 128, Judges 176 2125) (see also Isa.
    520 24, Jer. 213, Rom. 118-32, 1 Cor.
    56-7, 2 Cor. 614-15, 1 John 18)

  • As R.H. Popkin describes relativism in his
    article on the subject in The Encyclopedia of
    Religion, views are to be evaluated relative to
    the societies or cultures in which they appear
    and are not to be judged true or false, or good
    or bad, based on some overall criterion but are
    to be assessed within the context in which they
    occur. Thus, what is right or good or true to one
    person or group, may not be considered so by
    others there are no absolute standards Man
    is the measure of all things (quoting the Greek
    philosopher Protagoras (481-420, B.C.), and
    each man could be his own measure Relativism
    urges suspension of judgment about right and
    wrong. (Ellis Washington, Reply to Judge Richard
    A. Posner on the Inseparability of Law and
    Morality, Rutgers Journal of Law and Religion,
    Vol. 3)

  • As Cardinal Joseph Ratzinger said, Relativism is
    presented as a position defined positively by
    the concepts of tolerance and knowledge through
    dialogue and freedom, concepts which would be
    limited if the existence of one valid truth for
    all were affirmed affirming that there is a
    binding and valid truth in history in the figure
    of Jesus Christ and the faith of the church is
    described as fundamentalism. Such fundamentalism,
    is presented in different ways as the
    fundamental threat emerging against the supreme
    good of modernity i.e., tolerance and freedom.
    - Address to Congregation for the Doctrine of
    Faith, Guadalajara, Mexico, May 1996

Absolutism v. Relativism
  • The demise of Americas legal foundations occur
    when society rejects laws that are based on
    solid, irrevocable, moral, universal, absolute
    values, to a society that bases its laws on an
    arbitrary system of relativism, situational
    ethics, materialism, individualism, hedonism,
    paganism, or in any secularist ideology. This
    secularization of law has influenced all branches
    of knowledge law, philosophy, business,
    religion, medicine, education, science, the arts,
    and mass media. Harold Berman, The Interaction
    of Law and Religion 21 (1974).

Absolutism vs. Relativism
  • According to a recent poll of college seniors,
    73 agreed with the statement that What is right
    or wrong depends on differences in individual
    values and cultural diversity. Only 25 agreed
    with the statement that There are clear and
    uniform standards of right and wrong by which
    everyone should be judged."

Problems with Relativism
  • Relativism undermines moral criticism of
    practices of particular individuals or in
    particular societies where those practices
    conform to their own standards. For instance, it
    could be used to permit slavery in a slave
    society or it could be used to justify trade and
    investment with basically evil regimes, e.g.
    Apartheid governments.
  • But, as Cardinal Ratzinger said, There are
    injustices that will never turn into just things
    (for example, killing an innocent person, denying
    an individual or groups the right to their
    dignity or to life corresponding to that dignity)
    while, on the other hand, there are just things
    that can never be unjust. - Address to
    Congregation for the Doctrine of Faith,
    Guadalajara, Mexico, May 1996

Problems with Relativism
  • Relativism allows for oppression of those with
    minority views by allowing the majority in any
    particular circumstance to define what is morally
    right or wrong.
  • In Germany they first came for the Communists,
  • and I didn't speak up because I wasn't a
  • Then they came for the Jews,
  • and I didn't speak up because I wasn't a Jew.
  • Then they came for the trade unionists,
  • and I didn't speak up because I wasn't a trade
  • Then they came for the Catholics,
  • and I didn't speak up because I was a Protestant.
  • Then they came for me
  • and by that time no one was left to speak up.
  • - German anti-Nazi activist, Pastor Martin

Problems with Relativism
  • Relativists speak in terms that soften harsh
  • "Intelligent, educated, religious people embrace
    illogical absurdities that set aside not only
    God's truth, but also our responsibility for the
    well-being of others. When words are warped and
    twisted perversely, they're eventually emptied of
    their true meaning. When you shine the light of
    common sense on deceptive language couched in
    medical, philosophical or intellectual terms, the
    logic evaporates. Moral choices require that we
    use language to describe reality. - Jean Staker
    Garton, Author/Lecturer, Co-Founder of Lutherans
    for Life

Problems with Relativism
  • Relativists never need bother to examine why
    something is moral or immoral, they merely
    accept/tolerate alternative determinations, so
    that none are held to account
  • Over the years I have found that those who call
    themselves atheists actually have a strong sense
    of the absolute truth they know exists. They just
    dont want to acknowledge that its true -
    because if they did, they would have to change
    the way they live. They flee on moral grounds
    refusing to submit themselves, they exchange the
    truth for a lie. - Chuck Colson -Being the Body,

Problems with Relativism
  • Commenting on the idea that legal reforms can
    compel corporate morality, Michael Prowse, in
    the Financial Times, stated that "The underlying
    problem is that we are living in times that might
    aptly be called 'post-ethical.'" People are now
    "emotivists," who relativize moral judgments and
    "obey the law, help others and respect customs
    and mores only if they calculate that this will
    benefit them personally in some way. ... The root
    problem is a loss of belief in objective ethical

Problems with Relativism
  • Jesus said in John 831-32, If you continue in
    my word, then are you my disciples indeed And
    you shall know the truth, and the truth shall
    make you free. It would seem follow then that,
    people cannot experience ultimate and true
    freedom unless and until they come to terms with
    the absolute truth revealed by God.

Absolutism vs. Relativism
  • Most ethicists reject the theory of ethical
    relativism. Some claim that while the moral
    practices of societies may differ, the
    fundamental moral principles underlying these
    practices do not. -Markkula Center for Applied

  • To ensure that employees can and will act with
    integrity organizations need a strong and
    consistent set of values that dictate appropriate
    individual actions. - Conclusion of study
    conducted by Professor Pratima Bansal, cited in
    Rebuilding trust, The integral role of leadership
    in fostering values, honesty and vision,by Carol
    Stephenson in the Ivey Business Journal, Jan/Feb.
    2004, Vol. 68, Issue 3.

  • Navigating the complexities of a situation ...
    requires a reliable compass. We can plot that
    "north" by determining clearly our own core
    values. We have to identify - and articulate -
    what we believe is important to us and to our
    companies. Our core values drive our behaviors,
    and our behaviors tell the world who we are and
    what we stand for. ...Identifying and adhering to
    a core-values compass point provides a standard
    that will make decisions easier, consistent and
    justified. - Parkinson, J. Robert, Thinking
    clearly, remembering values key to making the
    call, Milwaukee Journal Sentinel, March 22, 2004.

  • Without commonly shared and widely entrenched
    moral values and obligations, neither the law,
    nor democratic government, nor even the market
    economy will function properly.- (Vaclav Havel
    Politics, morality, and Civility, Summer

  • What are the core values that are fundamental to
    the success of any individual or organization?

  • Honesty
  • Respect
  • Responsibility
  • Fairness
  • Compassion
  • Perseverance
  • Courage

Values - Honesty
  • Honesty - Being straightforward, sincere,
    truthful, free of fraud, deception or
  • Transparency - To be open, honest and available,
    to provide clear, accurate, and understandable
    information (e.g. in the context of financial
    disclosures). Some ethicists have argued that
    ethical business practices are best measured by a
    company's character and commitment to
    transparency than by their social vision or
    rhetoric (e.g. Jon Entine)

Values - Honesty
  • Honesty
  • Builds/Maintains Trust
  • Fosters Community
  • Makes Communication more Efficient Effective
  • Demonstrates Respect for the Dignity of Others

Values - Honesty
  • Moral Leaders welcome transparency and truth as
    opposed to secrecy and deception.
  • Respondents to a recent Victor James ethical
    leadership survey, by a wide margin, cited
    honesty as the quality most admired in a leader.

Values - Honesty
  • Richard Searsfounder of Sears Roebuck and
    Companystarted the modern mail order industry,
    supplying a burgeoning nation with innovative
    products and building a business that gave
    employment to hundreds of thousands of people. In
    his zeal to sell merchandise, Sears occasionally
    would get carried away with catalogue
    descriptions, praising products far beyond the
    literal truth. This in turn led to returned
    merchandise and reduced profits. But Sears
    learned his lesson. In later years, he was fond
    of saying, "Honesty is the best policy. I know
    because I've tried it both ways. - from
    Integrity at Work, ed. By Ken Shelton.

Values - Honesty
  • Honesty and transparency make you vulnerable. Be
    honest and transparent anyway. - Mother Teresa
  • Contra "Speech was given to man to disguise his
    thoughts." - Charles-Maurice de Talleyrand

Values - Honesty
  • Some scriptural references regarding honesty in
  • (Exodus 2210 2313 Leviticus 191112, 35-36,
    Deuteronomy 251316, Proverbs 616-19, 111,
    1217-19 22, Ephesians 425)

Values - Respect
  • Respect To give particular attention to, show
    consideration for, or hold in high or special
    regard (Merriam-Webster's Online Dictionary, 10th
  • Should respect be given or must respect be earned?

Values - Respect
  • Every man is to be respected as an absolute end
    in himself and it is a crime against the dignity
    that belongs to him as a human being, to use him
    as a mere means for some external purpose. -
    Immanuel Kant, Prussian geographer and
    philosopher (1724-1804)

Values - Respect
  • Human Dignity is the intrinsic worth that
    inheres in every human being. From the Catholic
    perspective (among other Christian perspectives),
    the source of human dignity is rooted in the
    concept of Imago Dei, in Christs redemption and
    in our ultimate destiny of union with God. Human
    dignity therefore transcends any social order as
    the basis for rights and is neither granted by
    society nor can it be legitimately violated by
    society. In this way, human dignity is the
    conceptual basis for human rights. While
    providing the foundation for many normative
    claims, one direct normative implication of human
    dignity is that every human being should be
    acknowledged as an inherently valuable member of
    the human community and as a unique expression of
    life, with an integrated bodily and spiritual
    nature. In Catholic moral thought, because there
    is a social or communal dimension to human
    dignity itself, persons must be conceived of, not
    in overly-individualistic terms, but as being
    inherently connected to the rest of society. -
    from the Ascension Health Code of Ethics

Values - Respect
  • Civilizations should be measured by "the degree
    of diversity attained and the degree of unity
    retained. - W.H. Auden, English poet
  • Never look down on anybody unless you're helping
    him up. - Jesse Jackson, American political
    activist and preacher

Values - Respect - Tolerance?
  • What about tolerance?

Values - Respect - Tolerance?
  • "Our culture has fallen into a kind of moral
    vertigo we value tolerance so much that we
    don't know how to talk to each other about what
    is right and good, - Rev. Kevin Phillips,
    director of the Business Leadership and
    Spirituality Network (BLSN) quoted in Competing
    Values, by Jane Lampman, Christian Science
    Monitor, August 1, 2002.

Values - Respect - Tolerance?
  • Did you know that the term tolerance (or in
    some translations sufferance Gk. eao) is
    rarely used in the New Testament, and that where
    it is used it is generally used in a negative
    sense? For example
  • Notwithstanding I have a few things against
    thee, because you tolerate that woman Jezebel,
    who calls herself a prophetess, to teach and to
    seduce my servants to commit fornication, and to
    eat things sacrificed unto idols. Rev. 220
  • By contrast, the New Testament uses the term
    love Gk. agapeo nearly 150 times in a positive
  • So whats the difference between love and

Values - Respect - Tolerance?
  • Tolerance Demonstrating sympathy for,
    indulging, or making allowances for, beliefs or
    practices differing from, or conflicting with,
    one's own.
  • Love In the Christian context, from the Gk.,
    agapeo, an active and beneficent interest in,
    and concern for, the well-being of another. It is
    given unconditionally and unselfishly. It
    involves a clear determination of will and
    judgment (i.e. a responsible choice). A loving
    person, honestly (Rom. 129) gives respect and
    demonstrates compassion. Demonstrating such love
    often requires courage. The source of such love
    comes from above (James 117).
  • Would you rather be loved or tolerated?

Values - Compassion
  • Compassion "sympathetic consciousness of
    another's distress together with a desire to
    alleviate it" Webster's 7th New Collegiate
    Dictionary, fellow feeling, the emotion of
    caring concern the opposite of cruelty, in
    Hebrew rahamanut, from the word rehem, 'womb',
    based on the idea of sibling love (coming from
    from the same womb).

Values - Compassion
  • "The word 'care' finds its roots in the Gothic
    'Kara' which means lament. The basic meaning of
    care is to grieve, to experience sorrow, to cry
    out with.. . . A friend who cares makes it clear
    that whatever happens in the external world,
    being present to each other now is what really
    matters." Henri Nouwen, Here and Now, p. 105

Values - Compassion
  • Southwest Airlines CEO Herb Kelleher has openly
    demonstrated a willingness to go the extra mile
    for Southwest employees. He has made it a
    priority to learn their names and to chip in and
    work alongside them when the situation has
    demanded his help. He has been observed lugging
    baggage and greeting customers in an Easter Bunny
    costume. He has repeatedly demonstrated a truly
    exceptional level of caring and compassion for
    his employees, and his employees have responded
    in kind. Perhaps the most dramatic example of
    their commitment to their beloved leader occurred
    when they pooled their own money and ran a
    60,000 ad in USA Today recognizing him on Bosses
    Day. In the ad they thanked Kelleher for being a
    friend, not just a boss. - from The Leadership
    Wisdom of Jesus, Charles C. Manz, 1998.

Values - Compassion
  • I expect to pass through the world but once. Any
    good therefore that I can do, or any kindness I
    can show to any creature, let me do it now. Let
    me not defer it, for I shall not pass this way
    again. - Stephen Grellet, French/American
    religious leader (1773-1855)
  • "Men are only great as they are kind. - Elbert
    Hubbard, American entrepreneur and philosopher
    (founder of Roycroft) (1856-1915)

Values - Compassion
  • "No act of kindness, no matter how small, is ever
    wasted." - Aesop, 6th Century B.C. Writer of
    Greek fables
  • "If the world seems cold to you, kindle fires to
    warm it. - Lucy Larcom, American poet
  • "The individual is capable of both great
    compassion and great indifference. He has it
    within his means to nourish the former and
    outgrow the latter.- Norman Cousins, American
    essayist editor (1912-1990)

Values - Compassion
  • "There are two ways of spreading light to be the
    candle or the mirror that reflects it. - Edith
    Wharton, American novelist (1862-1937) -
  • Compassion is the basis of morality.'' - Arthur
    Schopenhauer, German philosopher (1788-1860)
  • All we need in order to be moral human beings is
    compassion. - Nina Rosenstand summarizing the
    view of David Taylor in Good and Evil, from The
    Moral of the Story An Introduction to Ethics,
    McGraw-Hill, 2004.

Values - Compassion
  • Some scriptural references regarding compassion
  • (Matthew 1827, Luke 1030-37, (Parable of the
    Good Samaritan), 1 John 317, Jude 122)

Values - Responsibility
  • Responsibility/Accountability/Reliability Moral
    Leaders take responsibility for their own
    actions/failures and those of their companies and
    they demand accountability from their
    subordinates. (e.g. at Dell theres no The dog
    ate my homework. Dell ruthlessly exposes weak
    spots during grueling quarterly reviews and execs
    know they had better fix the problem before the
    next meeting. What You Dont Know About Dell,
    Business Week, Nov. 30, 2003, p.79) Involves a
    commitment to competent quality performance.
    Implies fidelity to promises and other
    commitments and not making promises that cannot
    be kept, such as committing to unrealistic
    delivery dates. Also calls for acknowledgment of
    implicit commitments, such as the protection of

Values - Responsibility
  • I am only one, but still, I am one. I cannot do
    everything but I can do something. And, because I
    cannot do everything, I will not refuse to do
    what I can. - Edward Everett Hale, American
    clergyman and writer (1822-1909)
  • The question for each man to settle is not what
    he would do if he had the means, time, influence
    and educational advantages, but what he will do
    with the things he has. - Hamilton Wright Mabee

Values - Responsibility
  • Any mans life will be filled with constant and
    unexpected encouragement if he makes up his mind
    to do his level best each day. - Booker T.
    Washington, American educator (1856-1915)
  • I long to accomplish some great and noble task,
    but it is my chief duty to accomplish small tasks
    as if they were great and noble. - Helen
    Keller, American social activist, public speaker
    and author (1880-1968)

Values - Fairness
  • Fair just, equitable, impartial, unbiased,
    objective. Involves a elimination (or at least a
    minimalization) of one's own feelings, prejudices
    and desires, so as to achieve a proper balance of
    conflicting interests. Implies an equitable
    distribution of burdens and benefits. John Rawls
    argues in A Theory of Justice that rules are fair
    if they are rules that the people operating under
    them would have agreed to, had they been given an
    opportunity to accept or reject them beforehand.

Values - Fairness
  • Justice demonstrating fairness, equity,
    impartiality, righteous action,
  • To some, justice is about conformity to truth. To
    others, its about conformity to law
  • But law and justice are 2 different concepts.
  • The law is something we must live with. Justice
    is somewhat harder to come by. - Sherlock
    Holmes, in The Case of the Red Circle.
  • This is a court of law, young man, not a court
    of justice.  Oliver Wendell Holmes, Jr.
  • justice occurs on earth when power and
    authority between people are exercised in
    conformity with Gods standards of moral
    excellence. - Gary Haugen, in The Good News
    About Injustice, InterVarsity Press, 1999.

Values - Perseverance
  • Perseverance/Fortitude - steadfast determination
    to continue on despite adversity usually over a
    long period of time.

Values - Perseverance
  • Nothing in the world can take the place of
    perseverance. Talent will not nothing is more
    common than unsuccessful men with talent.
    Education will not the world is full of educated
    derelicts. Genius will not unrewarded genius is
    almost a proverb. Persistence and determination
    alone are omnipotent. - Calvin Coolidge

Values - Perseverance
  • Some Biblical References Job 179a, the
    righteous one holds fast to his way Hos. 126b,
    endure to the end, John 831-32, 2 Cor. 135,
    keep proving yourself Gal. 514, stand fast
    Gal. 69, do not give up in doing what is fine
    Phil. 127, stand firm, striving side by side
    Phil. 41, stand firm 1 Thes. 521, hold fast to
    what is fine 2 Thes. 21517, stand firm,
    maintain your hold 1 Tim. 61112, pursue
    endurance 2 Tim. 212, go on enduring 2 Tim.
    314, continue in the things you have learned 2
    Tim. 478, fight the fine fight, finish the
    course Heb. 21, pay attention to what you have
    heard that you not drift away Heb. 314, make
    fast your hold to the end Heb. 1023, 3536,
    hold fast to the declaration of our hope, you
    have need of endurance James 12-4, perseverance
    must finish its work, 2 Pet. 317, do not fall
    from steadfastness.
  • God helps those who persevere. - The Koran

  • Which of the core values is the most important?

Values - Courage
  • The first place to start is for every individual
    to become aware of their core values and to have
    the courage and discipline to live out of them in
    all aspects of their lives. (The rising tide
    won't lift this economy Unless we're willing to
    confront the trust problem we've helped to
    create, Bill Grace, Founder Executive
    Director, Seattle's Center for Ethical
    Leadership, Guest Columnist, Seattle
    Post-Intelligencer, June 16, 2003.)

Values - Courage
  • Courage is the greatest of all virtues because,
    unless a man has that virtue, he has no security
    for preserving any other. - Samuel Johnson
  • Courage is the ladder on which all the other
    virtues mount. - Clare Booth Luce (1903 - 1987),
    in Reader's Digest, 1979
  • Courage is the footstool of the virtues, upon
    which they stand. - Robert Louis Stevenson
  • Courage is not simply one of the virtues, but
    the form of every virtue at the testing point.
    - C.S. Lewis
  • Courage is strength of mind, capable of
    conquering whatever threatens the attainment of
    the highest good. - St. Thomas Aquinas

Values - Courage
  • Courage is a perfect sensibility of the measure
    of danger and a mental willingness to endure it.
    - General William T. Sherman (for whom the
    Sherman tank was named).
  • Courage is being scared to death . . . and
    saddling up anyway. - John Wayne

Values - Courage
  • Whenever you see a successful business, someone
    once made a courageous decision. - Peter
  • We must constantly build dykes of courage to
    hold back the flood of fear. - Martin Luther
    King, Jr.
  • One isn't necessarily born with courage, but one
    is born with potential. Without courage, we
    cannot practice any other virtue with
    consistency. We can't be kind, true, merciful,
    generous, or honest. - Maya Angelou (1928 - )

Values - Courage
  • The credit belongs to the man who is actually in
    the arena... who strives valiantly... who spends
    himself for a worthy cause who, at the best,
    knows, in the end, the triumph of high
    achievement, and who, at the worst, if he fails,
    at least he fails while daring greatly, so that
    his place shall never be with those cold and
    timid souls who knew neither victory nor defeat.
    - Theodore Roosevelt

Values - Courage
  • Courage the ability to disregard fear bravery.
    The Latin root of this word is cur, which means
    heart. Courage literally means to take heart.
    Fear exists along a continuum. Courage involves
    recognizing a reasonable amount of fear or
    nervousness, facing it and then taking an
    intelligent risk.
  • Moral courage involves standing up for ones
    principles, in spite of possible adverse
    consequences to such things as reputation or
    emotional well-being.

Values - Universal Rule?
  • The Golden Rule , i.e. to do unto others as
    you would have them do unto you is an example of
    a value common to many cultures/religions
    (Mahabharata 51517, Hinduism, Talmud, Shabbat
    31a Levitcus 1918, Judaism, Matthew 712,
    Christianity, Udana-Varga 518, Buddhism,
    Analects 1523, Confucianism, Number 13 of Imam
    "Al-Nawawi's Forty Hadiths.", Islam)
  • Note Several Corporations have directly
    incorporated some form of this rule in their
    codes of ethics including Coachman, Mary Kay,
    Progressive, Merrill Lynch and USAA

Corporate Culture
  • Both individuals and organizations hold values
  • A corporation is said to manifest its values in
    its corporate culture
  • Corporate culture is loosely defined as the
    attitudes, behaviors and personalities that make
    up a company and that shape its behavior and
    reputation, or as Elizabeth Kiss of the Kenan
    Institute for Ethics puts it, corporate culture
    is how we perceive, think, feel and do things
    around here.
  • Most employees take their cues from the company
    culture and behave accordingly.
  • A business derives its character from the
    character of the people who conduct the business.
    - Ricky W. Griffin, Management, Boston
    Houghton Mifflin Company (2002)

Corporate Culture
Corporate Culture
  • "Moral behavior is concerned primarily with the
    interpersonal dimension of our behavior how we
    treat one another individually and in groups
    and, increasingly, other species and the
    environment." The key here is that morality
    brings us into contact with others and asks us to
    consider the quality of that contact. -
  • Quote from The Leadership Compass, John Wilcox
    and Susan Ebbs, as quoted in Everyday Ethics, by
    Thomas Shanks, S.J., Markkula Center for Applied

Corporate Culture
  • "The first step in the evolution of ethics is a
    sense of solidarity with other human beings."
    Albert Schweitzer, early 20th-century German
    Nobel Peace Prize-winning mission doctor and

Corporate Culture
  • The Pressure to Conform
  • We are all a kind of Chameleon, taking our hue -
    the hue of our moral character, from those who
    are about us. - John Locke (1632 - 1704)

Corporate Culture
  • The Pressure to Conform
  • Some years ago, a social scientist named Solomon
    Asch wanted to see how people dealt with social
    pressure so he designed an experiment to measure
    the results. He came up with a simple test that
    showed a series of lines on a board in front of
    the room, with one of the lines matching another
    in being the same length. The others were either
    much shorter or much longer. A person was brought
    into the room, along with others in a group,
    which unbeknown to the subject, were helpers to
    the professor. The whole group was asked to match
    the two lines that were the same length together.
    The helpers intentionally gave the wrong answer
    and it was found that in almost 75 of the time,
    the subjects would go along with the wrong
    answer, knowing full well it was wrong, but not
    wanting to stand out. - Opinion and Social
    Pressure, Scientific American, Nov. 1955, 31-35.

Corporate Culture
  • The Pressure to Conform
  • Culture shapes behavior. There are plenty of
    perfectly decent people who go astray because
    they're in a culture that creates an environment
    in which they can't get their jobs done unless
    they engage in unethical activities. - Harvard
    Business School professor and business ethicist
    Barbara Toffler, former partner at Arthur
    Andersen. Toffler left Andersen in 1999, well
    before the Enron and Global Crossing scandals
    destroyed the company. Her book, Final
    Accounting Ambition, Greed, and the Fall of
    Arthur Andersen (Random House/Broadway Books,
    2003), describes the process of ethical erosion
    in grim detail. Postcards from an Ethical
    Wasteland, CIO, June 1, 2003

Corporate Culture
  • In Moral Man and Immoral Society, Reinhold
    Niebuhr proposed that individual persons are
    always more moral functioning alone than when
    they function in a social group. -
    Institutional Ethics An Oxymoron, By Joe E.
    Trull, Editor, Christian Ethics Today, Journal of
    Christian Ethics, Issue 035 Volume 7 No 4 August
    2001 .
  • Do you agree with this?

Corporate Culture
  • Rarely do the character flaws of a lone actor
    fully explain corporate misconduct. More
    typically, unethical business practice involves
    the tacit, if not explicit, cooperation of others
    and reflects the values, attitudes, beliefs,
    language, and behavioral patterns that define an
    organizations operating culture. - Lynn Sharp
    Paine, Harvard Business School

Corporate Culture
  • A strong corporate culture founded on ethical
    principles and sound values is a vital driving
    force behind strategic success. - Thompson
  • One company stressed its commitment to RICE
    respect, integrity, communication, and
    excellence. The words have been on T-shirts,
    paperweights, and on signs. The firm printed a
    61-page booklet with its code of ethics and every
    employee had to sign a certificate of compliance.
    That company was Enron!

According to Ethical or Moral, Values, Principles
or Standards
  • Whose Values?

According to Ethical or Moral, Values, Principles
or Standards
  • Personal
  • Family
  • Peers
  • Religious
  • Company
  • Community, Regional, National, International

According to Ethical or Moral, Values, Principles
or Standards
  • Learned Where?

According to Ethical or Moral, Values, Principles
or Standards
  • Home
  • School
  • Church (or other place of worship)
  • Life Experience
  • Work Experience
  • Books
  • News Media
  • Entertainment Media

According to Ethical or Moral, Values, Principles
or Standards
  • The average American, by the age of 65, will have
    spent the equivalent of 15 years of their life
    watching television.
  • By contrast, over the same time period, the
    average weekly church-going American will have
    spent only 8 months of their life receiving
    spiritual instruction.
  • American children will take in 63,000 hours of
    media (television, radio, internet, i-pods,
    etc.) input between the ages of 5 and 17. 
  • By contrast, if they go to church once a week for
    an hour, over the same number of
    years, that's 600 hours. 

According to Ethical or Moral, Values, Principles
or Standards
  • In the middle of an interview for acceptance to a
    prestigious Ivy League school back east, the
    interviewer asked his sure of himself
    candidate, If no one would ever find out, and no
    one got hurt, would you lie for 1M? The young
    man thought for a moment and said, If no one
    found out, and no one was hurt? Sure, I think I
    would! The interviewer then asked, Would you
    lie for a dime? The young man shot back, No
    way, what kind of man do you think I am? The
    interviewer responded, I have already determined
    that, I am just trying to determine your price.

According to Ethical or Moral, Values, Principles
or Standards
  • So fearful were the ancient Chinese of their
    enemies on the north that they built the Great
    Wall of China, one of the 7 wonders of the
    ancient world. It was so high they knew no one
    could climb over it, so thick that nothing
    could break it down. Then they settled back to
    enjoy their security. But during the first 100
    years of the walls existence, China was invaded
    3 times. Not once did the enemy break down the
    wall or climb over its top. Each time they bribed
    a gatekeeper marched right through the gates.
    According to the historians, the Chinese were so
    busy relying upon the walls of stone that they
    forgot to teach integrity to their children.

According to Ethical or Moral, Values, Principles
or Standards
  • In the 1950s a psychologist, Stanton Samenow, and
    a psychiatrist, Samuel Yochelson, sharing the
    conventional wisdom that crime is caused by
    environment, set out to prove their point. They
    began a 17-year study involving thousands of
    hours of clinical testing of 250 inmates here in
    the District of Columbia. To their astonishment,
    they discovered that the cause of crime cannot be
    traced to environment, poverty, or oppression.
    Instead, crime is the result of individuals
    making, as they put it, wrong moral choices. In
    their 1977 work The Criminal Personality, they
    concluded that the answer to crime is a
    "conversion of the wrong-doer to a more
    responsible lifestyle." In 1987, Harvard
    professors James Q. Wilson and Richard J.
    Herrnstein came to similar conclusions in their
    book Crime and Human Nature. They determined that
    the cause of crime is a lack of proper moral
    training among young people during the morally
    formative years, particularly ages 1 to 6.

According to Ethical or Moral, Values, Principles
or Standards
  • 33 of teens would act unethically to get ahead
    or to make more money if there was no chance of
    getting caught, according to a new Junior
    Achievement/Harris Interactive Poll of 624 teens
    between the ages of 13 and 18. 25 said they were
    not sure and only 42 said they would not.
    These results confirm our belief that ethics
    education must begin in elementary school. said
    Barry Salzberg, U.S. Managing Partner of Deloitte

According to Moral Principles or Standards
  • Does society require a moral code to survive and

According to Moral Principles or Standards
  • 17th Century Philosopher Thomas Hobbes postulated
    that life in an amoral society would be poor,
    nasty, brutish and short, lacking in industry
    and commerce, as well as knowledge and arts, and
    that its people would live in a constant state of
    fear and insecurity.

According Moral Principles or Standards
  • Men qualify for freedom in exact proportion to
    their disposition to put moral chains on their
    own appetites. Society cannot exist unless a
    controlling power is put somewhere on will and
    appetite, and the less of it there is within, the
    more of it there must be without. - Edmund Burke

According to Moral Principles or Standards
  • The institutions of our society are founded on
    the belief that there is an authority higher than
    the authority of the State that there is a moral
    law which the state is powerless to alter that
    the individual possesses rights, conferred by the
    Creator, which government must respect And the
    body of the Constitution as well as the Bill of
    Rights enshrined those principles. Justice
    William O. Douglas, in McGowan v. Maryland, 366
    U.S, 420 (1961)

According to Moral Principles or Standards
  • Without civic morality communities perish
    without personal morality their survival has no
    value. Bertrand Russell, 20th-century British
    mathematician and philosopher

According to Moral Principles or Standards
  • Martin Luther King, Jr. once noted, " The most
    dangerous criminal may be the man gifted with
    reason but with no morals."

According to Moral Principles or Standards
  • We have grasped the mystery of the atom and
    rejected the Sermon on the Mount. The world has
    achieved brilliance without wisdom, power without
    conscience. Ours is a world of nuclear giants and
    ethical infants. --General of the Army, Omar

According to Moral Principles or Standards
  • There are seven sins in the world Wealth without
    work, Pleasure without conscience, Knowledge
    without character, Commerce without morality,
    Science without humanity, Worship without
    sacrifice and politics without principle. -
    Mahatma Gandhi (1869 - 1948)

  • R. H. Tawney, the British historian, once wrote
    ''To argue, in the manner of Machiavelli, that
    there is one rule for business and another for
    private life, is to open the door to an orgy of
    unscrupulousness before which the mind recoils.''

  • Truett Cathy, founder of Chick-fil-A, argues
    there is no such thing as business ethics - only

  • Duty-Based v. Outcome-Based Ethics
  • Duty (Deontology)
  • Duty is an act done simply for the sake of what
    is right.
  • Duty is determined by revealed truths and
    involves universal principles
  • Often religion-based
  • e.g. Kants Categorical Imperative
  • "Everyone is obligated to act only in ways that
    respect the intrinsic value, human dignity and
    moral rights of all persons."
  • Places High Value on Individual Rights
  • Outcome (Consequentialism)
  • Ethical if best outcome for the majority
  • Involves cost-benefit analysis
  • e.g. Bentham Mills Utilitarianism
  • "Of any two actions, the most ethical one is that
    which will produce the greatest balance of
    benefits over harms."
  • De-emphasizes individual rights

  • Strategic v. Real Ethics
  • What is the motivation/purpose for acting

  • Integrity from the Latin integritas, meaning
    wholeness, completeness, or purity. To
    courageously hold to what one believes is right
    and true, without compromise. To stand undivided,
    immovable, consistent in both heart and action,
    word and deed. Involves the maintenance of virtue
    and the pursuit of moral excellence. Integrity is
    demonstrated by not only espousing your values,
    but by living according to them. Integrity
    describes both who you are and what you do.
    People of integrity are conscientious,
    trustworthy, accountable, committed and
    consistent. A key to maintaining integrity is
    counting the cost before committing yourself.

  • Psychologists have found integrity to be
    essential to an individual's sense of identity
    and self-worth, enabling the successful
    navigation of change and challenge. Links between
    integrity and the ability to gain and maintain
    the trust of others have often been noted. Many
    purveyors of practical advice, including Cicero
    and Benjamin Franklin, have counseled that
    integrity is the cornerstone of worldly success.
    According to Franklin, "no Qualities are so
    likely to make a poor Man's Fortune as those of
    Probity Integrity" (quoted in Beebe, 1992, p.
    8) - from Blackwells Encyclopedic Dictionary of
    Business Ethics.

  • In Living a Life That Matters Rabbi Harold
    Kushner describes the kind of people who are able
    to overcome the negativity in their lives as
    shalem, people who are whole, united within
    themselves, their internal conflicts ended.
    Because of this, he says, they are persons of
    integrity. Integrity, says Kushner, is a quality
    just as essential to human well-being as is the
    pursuit of peace and justice.

  • The Bible/Talmud says that
  • The man of integrity walks securely, but he who
    takes crooked paths will be found out. (Prov.
  • The integrity of the upright guides them, but the
    unfaithful are destroyed by their duplicity.
    (Prov. 113)
  • Integrity brings peace (i.e. a clear conscience)
    and marks the perfect man (Hebrew Word Tam Man
    of Integrity) (Ps. 3737, 1 Kings 94)
  • The just man walketh in his integrity his
    children are blessed after him. (Prov. 207)
  • A good name is better than precious ointment.
    (Ecc. 71)

  • Some Biblical Examples of Integrity
  • Joseph, Gen. 391-12
  • Jacob/Israel (Gen 3229) known as a simple man
    (tam, Gen 2527) that is to say, that his mouth
    was like his heart.
  • Job (Book of Job, see in particular description
    of Job at 23, 275)
  • Daniel, Shadrach, Meshach Abednego (Daniel
    Chapters 3 6)
  • David (Ps. 78)
  • Solomon (1 Kgs. 94)
  • Contrast Ananias Sapphira, Acts 51-11 and
    Acts 2016-36

  • According to Michael Useem, Director of the
    Center for Leadership and Change Management,
    Warren Buffett's influence derives from his
    moral stature and integrity. In the aftermath of
    scandals that have rocked U.S. companies in the
    past few years, it is difficult to overemphasize
    the importance of ethics as a factor in
    leadership. -Leadership and Change Becoming
    the Best What You Can Learn from the 25 Most
    Influential Leaders of Our Times , Knowledge _at_
    Wharton Newsletter, Jan.28-Feb.4, 2004

  • Character The notable/conspicuous/
    distinguishing moral/ethical traits or
    characteristics of a person that give evidence of
    their essential nature and which ultimately shape
    their reputation.

  • President Harry Truman used to say "Fame is a
    vapor, popularity an accident, riches take wings,
    those who cheer today may curse tomorrow, only
    one thing endures -- character.

  • "What you are stands over you... and thunders so
    that I cannot hear what you say to the contrary.
    - Ralph Waldo Emerson

  • In his book The Death of Character, James Hunter,
    a noted sociologist from the University of
    Virginia, concludes that while Americans are
    innately as capable of developing character as
    they ever were in the past, there are now few
    cultural or institutional guidelines in our
    society that call for its cultivation or
    maintenance. The reason, he suggests, is because
    there is no consensus of moral authority.
  • Do you agree with this?

  • Compartmentalization Many people believe that
    what individuals do in their private lives is
    their own business as long as it does not
    adversely impact the performance of their duties
    to the organization and they are able to deliver
    the goods professionally. Under this way of
    thinking even serious moral failures may be
    excused. Some refer to this kind of thinking as
    compartmentalization. (e.g. President
    Clinton/Monica Lewinsky situation, where, despite
    the scandal, President Clinton maintained between
    a 60 and 70 approval rating with the American
  • Do you agree with this?
  • Contrast Find God in all things, St. Ignatius

  • Character vs. Reputation It has been said that
    an individuals character can be illustrated by a
    barrel of apples. The apples seen on top by all
    represent ones reputation, and the apples that
    lie hidden underneath are his character.

  • Eli Lily introduced a drug, fialuridine, intended
    to treat hepatitis B. However, 15 patients who
    submitted to trials of the drug suffered liver
    toxicity and 6 died. Rather than follow the
    companys long-standing no comment policy, the
    new Chairman and CEO, Randall Tobias openly
    acknowledged the failure. His view was that
    communication stands at the top of the list in
    the elements of good leadership. In addition, he
    believed that if a company leaves a
    communications void, others will fill it with
    misinformation. (Put the Moose on the
    TableLessons in Leadership from a CEOs Journey
    Through Business and Life, Randall and Todd
    Tobias, Indiana University Press)

  • A railroad executive burst into Arthur Andersens
    office one day in 1914, demanding that the firms
    founder approve the railroads books. Accountants
    had discovered that the railroad was inflating
    its profits by failing to properly record
    expenses. Andersen refused, saying that there
    wasnt enough money in the city of Chicago to
    make him approve the fraudulent accounting.
    Andersens independence cost him the client, but
    it gained him something far more valuable, a
    reputation for integrity that gave investors
    confidence in Arthur Andersen audits, a
    reputation that helped the firm become one of the
    top 5 accounting firms in the U.S. After nearly
    90 years in business, Andersen imploded in 2002
    after acknowledging that its auditors had
    shredded documents relating to its audits of

  • Warren Buffett, CEO of Berkshire Hathaway, warns
    his executives once a year not to do anything
    that year they would be ashamed to read about in
    their local newspaper. You can lose a reputation
    that took 37 years to build in 37 seconds. And it
    might take more than 37 years to build it back.

  • VirtueThe quality of doing what is right and
    avoiding what is wrong.
  • "Virtue develops from a habitual commitment to
    pursue the good. - Ronald F. Thiemann, a
    professor of religion and society at Harvard
    Divinity School
  • Wisdom is know what to do next virtue is doing
    it. - David Starr Jordan (1851 - 1931), American

The Role of Leadership in Developing a Culture of
  • According to Marshall Schminke, who teaches
    business ethics at the University of Central
    Florida, A persons individual moral framework
    is only the third-most important factor in
    deciding what theyll do. The most important is
    what does their boss do. Workers look to their
    boss first for cues on what constitutes moral
    behavior. Second, they look at their peers, and
    finally at their own moral code. -Experts
    Ethics not Just Codes, Marshall Schminke, Raleigh
    News Observer, June 8, 2003, p.12E, based on an
    article by Harry Wessel in the Orlando Sentinel.)

The Role of Leadership in Developing a Culture of
  • A company's commitment to integrity flows from
    the commitment, action, and credibility of its
    leaders. - Responsibility Lies In Leadership ,
    By Ruettgers, Mike, Chairman of the Board of EMC
    Corporation, Vital Speeches of the Day, 0042742X,
    12/15/2003, Vol. 70, Issue 5, Delivered to The
    Fall 2003 Raytheon Lectureship in Business
    Ethics, Bentley College, Center for Business
    Ethics, Waltham, Massachusetts, October 8, 2003

Role of Leadership in Developing a Culture of
  • A leaders integrity is probably the single most
    important factor in an organizations ability to
    develop a culture of integrity
  • Numerous business leaders have described the
    development and maintenance of a culture of
    integrity as the very purpose of leadership?

The Role of Leadership in Developing a Culture of
  • Edgar Schein argues that leaders shape culture
    through what they notice, measure, reward and
  • e.g. At Enron and Worldcom, executives and Board
    members elevated growth and short-term profits
    above all other considerations and nurtured a
    culture of cut-throat competition within the

The Role of Leadership in Developing a Culture of
  • President George W. Bush observed recently,
    "Ultimately the ethics of American business
    depend on the conscience of America's business

The Role of Leadership in Developing a Culture of
  • A report by former U.S. Attorney General Richard
    Thornburg explained how the corporate culture
    created by CEO Bernie Ebbers and CFO Scott
    Sullivan fostered an environment that led to the
    largest ever bankruptcy in U.S. history. Ebbers
    resisted efforts to establish a company code of
    conduct calling it a colossal waste of time. He
    also made numerous, often highly emotional
    demands for results. (ReportsEbbers knew of
    gimmickry, Matthew Barakat, Raleigh News
    Observer, June 10, 2003, p.1)

The Role of Leadership in Developing a Culture of
  • The closer the enterprise the greater the
    correlation between the corporate culture and the
    personal ethics of its leaders (e.g. small,
    family business (note Malden Mills was a family
    business), contrast a multinational corporation)

The Role of Leadership in Developing a Culture of
  • In a recent study by the Southern Institute for
    Business and Professional Ethics, 97 of
    respondents said that the leader of an enterprise
    must also be the moral leader, but many
    executives dont see or appreciate their power as
    role models in this regard. Employees take their
    cue from superiors on how to conduct themselves,
    and written codes of conduct rarely carry as much
    weight as the actual actions of those in command.

Role of Leadership in Developing a Culture of
  • Perhaps Skilling and Lay couldn't know all the
    goings-on at Enron, as they claim. However,
    "people at the top tend to set the target, the
    climate, the ethos, the expectations that fuel
    behavior," says Thomas Donaldson, a business
    ethics professor at the Wharton School at the
    University of Pennsylvania. (Corporate Ethics
    Right Makes Might, Business Week, 4/11/02)

Role of Leadership in Developing a Culture of
  • Business ethics is integral to effective
    leadership. It is not something that can be
    delegated to othe
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