What is ethics3?
Simply stated, ethics refers to standards of behavior that tell us how human beings ought to act in the many situations in which they find themselves-as friends, parents, children, citizens, businesspeople, teachers, professionals, and so on.
Potter Stewart – U S Supreme Court Justice says “Ethics is knowing the difference between what you have a right to do and what is right to do”1
Business ethics focuses on right or wrong behavior in the business world and has to do with:
• Rightness or wrongness of actions.
• How businesses apply moral and ethical principles to situations that arise in the workplace.
• More complicated than personal ethics.
Some of the examples involved in class discussion:
Atlanta Beltline CEO, Brian Leary4 got fired after Beltline employees used taxpayer money for wedding gifts, a parking ticket and a dry cleaning bill.
Emory University score misrepresentation10,11 - Instead of reporting only the scores of enrolled students, it included data from students who were admitted, but decided to attend college elsewhere. The university also didn't include data from the bottom 10% of its students.
Delta Airlines official who was leading “process optimization” was asked to resign when the board of directors found that he had set up different transaction accounts.
Why this is a problem?
I personally think one of the main problems is the tendency in business world for short-term profit maximization. People tend to think about making quick & easy money and increase the shareholder value.
What are the classic ethical decision-making frameworks?
Below are the 5 sources of ethical standards9:
Utilitarian Approach: The ethical action is the one that will produce the greatest balance of benefits over harms
Rights Approach: The ethical action is the one that most dutifully respects the rights of all affected.
Fairness or Justice Approach: The ethical action is the one that treats people equally, or if unequally, that treats people proportionately and fairly.
Common Good Approach: The ethical action is the one that contributes most to the achievement of a quality common life together.
Virtue Approach: The ethical action is the one that embodies the habits and values of humans at their best.
Why do good people make bad ethical decisions?
I think a variety of factors are involved in good people making bad ethical decisions. The article “Psychology of Fraud: Why Good People Do Bad Things” posted in NPR6 nicely describes these factors with a sample real life illustration:
• According to the research most of us are capable of behaving in profoundly unethical ways. And not only are we capable of it — without realizing it, we do it all the time.
• The first lie always sets the tone – it is that unethical act that will open the door to all the other unethical acts. People often tend to do what is most convenient.
• People often fail to see the “Ethical Big picture” because they are frequently blind to the ethics of a situation.
• Concept of “bounded ethicality": - The notion that cognitively, our ability to behave ethically is seriously limited, because we don't always see the ethical big picture. One can argue that certain cognitive frames make us blind to the fact that we are confronting an ethical problem at all.
• Depending on the frame we are in (business or ethical) it activates a different set of goals - the business frame cognitively activates one set of goals — to be competent, to be successful; the ethics frame triggers other goals. And once you're in, say, a business frame, you become really focused on meeting those goals and other goals can completely fade from view.
• One other possible explanation is - We like to help each other, especially people we identify with. And when we are helping people, we really don't see what we are doing as unethical. People feel empathetic