Module 1

Ethical Problems in Business

Employee Behavior
From large corporations to small businesses, individuals involved in all types of business often face ethical issues
stemming from employee behavior. For example, whether an employee can spend work time checking personal
email accounts, how a manager deals with claims of harassment and to what extent a manager can "groom" a certain
employee for a promotion are all examples of ethical issues regarding employee behavior. There are legal
consequences for some unethical employee behavior. For example, if a supervisor discriminated against an
employee based on her gender, religion or ethnicity when making recommendations for a promotion, legal action
could be sought. Small business owners can help to prevent ethical problems stemming from employee behavior by
drafting a clear, attorney-reviewed set of standards that dictate behavior policies for employees at all levels.

Employee Working Conditions

In addition to employee behavior, there are a number of ethical issues business people must consider about
employee working conditions. For example, employers must be aware of the safety of their work environment and if
they have compensated employees for all the time they have worked. The must also consider if they have required
an employee to work an unreasonably long period of time or if they have him doing an unusually difficult task. Just
like there are legal consequences for some unethical issues regarding employee behavior, there are also legal
consequences for unethical working conditions. For example, an employer who requires an employee to work
without pay or who creates an unsafe working environment can face legal action.

Supplier/Customer Relations
In addition employees and business owners must consider the ethical issues involved with their relationships
between suppliers and customers. Business owners in particular must consider whether it is ethical to do business
with suppliers who have unethical practices. When dealing with customers or clients, business people must ensure
that they use their information correctly, do not falsely advertise a product or service, and do not intentionally do
sub-standard work

Fundamental Issues
The most fundamental or essential ethical issues that businesses must face are integrity and trust. A basic
understanding of integrity includes the idea of conducting your business affairs with honesty and a commitment to
treating every customer fairly. When customers perceive that a company is exhibiting an unwavering commitment to
ethical business practices, a high level of trust can develop between the business and the people it seeks to serve. A
relationship of trust between you and your customers may be a key determinate to your company's success.

Diversity Issues
According to the HSBC Group, "the world is a rich and diverse place full of interesting cultures and people, who
should be treated with respect and from whom there is a great deal to learn." An ethical response to diversity begins
with recruiting a diverse workforce, enforces equal opportunity in all training programs and is fulfilled when every
employee is able to enjoy a respectful workplace environment that values their contributions. Maximizing the value
of each employees' contribution is a key element in your business's success.

Decision-Making Issues

According to Santa Clara University, the following framework for ethical decision-making is a useful method for
exploring ethical dilemmas and identifying ethical courses of action: "recognizes an ethical issue, gets the facts,
evaluates alternative actions, makes a decision and tests it and reflects on the outcome." Ethical decision-making
processes should center on protecting employee and customer rights, making sure all business operations are fair and
just, protecting the common good and making sure individual values and beliefs of workers are protected.

Compliance and Governance Issues

Businesses are expected to fully comply with environmental laws, federal and state safety regulations, fiscal and
monetary reporting statutes and all applicable civil rights laws. The Aluminum Company of America's approach to
compliance issues states, "no one may ask any employee to break the law, or go against company values, policies
and procedures." ALCOA's commitment to compliance is underpinned by the company's approach to corporate
governance; "we expect all directors, officers and other Alcoans to conduct business in compliance with our
Business Conduct Policies."

Ethical Choices in Business

Importance of Ethics in Business

The importance of ethics in business

Ethics concern an individual's moral judgements about right and wrong. Decisions taken
within an organisation may be made by individuals or groups, but whoever makes them
will be influenced by the culture of the company. The decision to behave ethically is a
moral one; employees must decide what they think is the right course of action. This
may involve rejecting the route that would lead to the biggest short-term profit.

ethical behavior and corporate social responsibility can bringsignificant benefits to a business. For
example, they may: Attract customers to the firms products, thereby boosting sales andprofitsmake
employees want to stay with the business, reduce laborturnover and therefore increase productivity
Attract more employees wanting to work for the business, reducerecruitment costs and enable the
company to get the most talentedemployees Attract investors and keep the companys share price
high, therebyprotecting the business from takeover.Unethical behavior or a lack of corporate social
responsibility, bycomparison, may damage a firms reputation and make it lessappealing to
stakeholders. Profits could fall as a result.

MODULE 2
Moral Standards
Ethics and Decision Making

making Decisions
Making good ethical decisions requires a trained sensitivity to ethical
issues and a practiced method for exploring the ethical aspects of a
decision and weighing the considerations that should impact our
choice of a course of action. Having a method for ethical decision

making is absolutely essential. When practiced regularly, the

method becomes so familiar that we work through it automatically
without consulting the specific steps.
The more novel and difficult the ethical choice we face, the more we
need to rely on discussion and dialogue with others about the
dilemma. Only by careful exploration of the problem, aided by the
insights and different perspectives of others, can we make good
ethical choices in such situations.
We have found the following framework for ethical decision making
a useful method for exploring ethical dilemmas and identifying
ethical courses of action.
A Framework for Ethical Decision Making

Recognize an Ethical Issue

1. Could this decision or situation be damaging to someone or to
some group? Does this decision involve a choice between a
good and bad alternative, or perhaps between two "goods" or
between two "bads"?
2. Is this issue about more than what is legal or what is most
efficient? If so, how?
Get the Facts
3. What are the relevant facts of the case? What facts are not
known? Can I learn more about the situation? Do I know
enough to make a decision?
4. What individuals and groups have an important stake in the
outcome? Are some concerns more important? Why?
5. What are the options for acting? Have all the relevant persons
and groups been consulted? Have I identified creative options?
Evaluate Alternative Actions
6. Evaluate the options by asking the following questions:

Which option will produce the most good and do the least
harm? (The Utilitarian Approach)
Which option best respects the rights of all who have a stake?
(The Rights Approach)
Which option treats people equally or proportionately? (The
Justice Approach)
Which option best serves the community
as a whole, not just some members?
(The Common Good Approach)
Which option leads me to act as the sort of person I want to
be? (The Virtue Approach)

Make a Decision and Test It

7. Considering all these approaches, which option best addresses
the situation?
8. If I told someone I respect-or told a television audience-which
option I have chosen, what would they say?
Act and Reflect on the Outcome
9. How can my decision be implemented with the greatest care
and attention to the concerns of all stakeholders?
10.
How did my decision turn out and what have I learned
from this specific situation?
- See more at:
http://www.scu.edu/ethics/practicing/decision/framework.html#sth
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