Business Ethics: - Andrew C. Wicks R.Edward Freeman Patricia H. We...

Business Ethics:

A Managerial Approach Andrew C. Wicks R.Edward Freeman Patricia H. Werhane Kirsten E. Martin Manual with Case Notes Andrew C. Wicks Chen Song 1 / 4

Table of Contents

Preface ..................................................................................................................... iv

Part I: Ethics and Business

Chapter 1: The Language of Ethics ..................................................................................1

Chapter 2: A Look at the Sources of Ethical Problems in Business

and How to Prevent Them ...........................................................................12 Chapter 3: Ethics, Stakeholders, Corporate Strategy, and Value Creation .....................20 Chapter 4: Business Ethics in the Global Marketplace ...................................................27

Part II. Ethics in the Functional Areas of Business

Chapter 5: Leadership .....................................................................................................41 Chapter 6: Marketing and Operations .............................................................................49 Chapter 7: Finance and Accounting ................................................................................59 Chapter 8: Management ..................................................................................................68

Part III. Special Topics in Ethics Chapter 9: Environmental Sustainability and Its Challenges to Management ...............77 Chapter 10: Managing on the Ethical Frontier ...............................................................86

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Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall 1

Chapter 1: The Language of Ethics

Sample Discussion Answers

These answers should be treated as supplemental to your own thoughts and analysis and are by no means comprehensive. Feel encouraged to include your own experiences and points of disagreement with the chapter should you find any.

• Why are managers uncomfortable discussing ethics? Relate both the answers

provided in the chapter and your own ideas based on your experiences. (Page 2)

There are many reasons why managers may feel uncomfortable discussing ethics – see p.

• for the list summary of the findings of Bird and Waters: i) managers believe they lack

the technical ability to discuss ethics; ii) managers see ethics as about blaming and they don’t want to blame others; iii) managers see ethics as soft and idealistic when they need to be hard-nosed and focused on results. All these factors mitigate against discussing ethics.

Whether or not managers are uncomfortable discussing “ethics” may depend on how one defines the term. Many people may actually feel quite comfortable discussing certain ethical issues without realizing that they are talking about ethics. This brings us to our next question.

• What is ethics, and what does it mean to “put business and ethics together”?

From your vantage point, what would it mean for a company to do this well? (Page 4)

Ethics is about human welfare, both our own and that of others, Ethics in this sense includes not only an imperative to not inflict harm upon others, but also entails a prescription for excellence. Such excellence may be manifested in any number of ways (actions, goals, codes conduct, etc), and those manifestations may likewise have any number of justifications.

Whether we admit or not, we all “do” ethics; the real challenge is whether or not we can do ethics well. In this sense, business and ethics are necessarily linked – all businesses allocate harms and benefits for stakeholders, take actions that both express and shape their character, and observe certain standards of conduct. This fact is true both for our personal life and for activity in business. The key question in both cases is whether one can justify their behavior. This is a major challenge and it will involve getting into more detail about the nature of business to better understand points of tension within and across each of the decision-guides.

Students will have their own ideas about how much of a tension exists between business and ethics and where these tensions are most prominent.

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Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall 2

• What are the three traditions of ethics, and how do they provide guidance to help

inform your managerial decision making? (Page 5)

There is a tremendous amount of literature from throughout history exploring issues of

ethics. That literature can be broadly categorized into three large themes:

• The actions or “means” people use to achieve their goals. This dimension of

ethics is concerned with identifying the intrinsic moral value of particular actions.For example, many philosophers will agree that the act of lying, by itself, is morally wrong while the act of halting the exploitation of small children for sweatshop labor can be considered morally virtuous.

• The agents or “persons” who are acting in the situation. This tradition of

thought sees ethical behavior and ethical people as one in the same: people who

behave ethically and virtuously are people of good character. This branch of ethics explores what it means to be a good person – to not only practice ethics, but to live it.

• The ends or “goals” that are outcomes of actions. This branch of ethics

evaluates the moral value of an action in terms of the consequences of that action.Under this analysis, for example, lying to a mass-murderer may be considered a virtuous act if lives are saved as a consequence of the lie; and banning child labor in sweatshops may be considered a deplorable act if the lack of sweatshop employment forces the children to work in mines or prostitution.

These three themes are each facets of ethics that can be considered when evaluating ethical justifications. Each tradition brings with it certain insights that can help guide managerial decision making.

The actions-based tradition is probably the tradition of thought most people immediately associate with ethics, possibly because it is a constant presence in daily life. Social norms, standards of conduct, legal systems, and religious beliefs all shape what people believe to be virtuous or immoral actions. Very likely, these institutions have already shaped your own beliefs as to what constitutes ethical actions – beliefs that guide your decisions on a daily basis. Do you apply those same precepts within the workplace as you do in life outside of work? Why or why not?

The agent-based tradition can further help one evaluate an ethical decision by considering how the decision will affect one’s character. One way to benefit from this tradition is to ask oneself what kind of manager one wants to become and what kind of actions will lead to becoming that kind of manager. (i.e. what would do in this situation?) Likewise, some could argue that, just as the actions of an individual determine that individual’s character, the actions of a company determine that company’s ethical culture. As a manager, what kind of corporate culture do you wish to foster? How is that

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