This document outlines key concepts from a chapter on business ethics. It discusses how public perception of business ethics has changed over time and provides definitions of business ethics. It also presents three models of management ethics: immoral management which lacks ethical principles, moral management which conforms to high ethical standards, and amoral management which does not consider ethics intentionally or unintentionally. Additionally, it covers frameworks for analyzing ethical situations and developing moral judgment.

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Business
Ethics
Fundamentals
Search the Web
Ethics Officers Association is a professional
association of managers of corporate ethics
and compliance. Visit EOA’s web site at::
www.eoa.org

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Chapter Six Objectives
• Describe how the public regards business ethics
• Provide a definition of business ethics
• Explain the conventional approach to business ethics
• Analyze economic, legal, and ethical aspects of
business
• Identify four important ethics questions
• Describe three models of management ethics
• Discuss Kohlberg’s three levels of moral judgment
• Identify the elements of moral judgment

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Chapter Six Outline
• Business Ethics and
Public Opinion
• Define business ethics
• Ethics, Economics,
and Law: Venn Model
• Four Important Ethics
Questions
• Three Models of
Management Ethics
• Making Moral
Management Actionable
• Developing Moral
Judgment
• Elements of Moral
Judgment
• Summary

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Introduction to Chapter Six
Business Ethics
• Public’s interest in business ethics
increased during the last four decades
• Public’s interest in business ethics is
spurred by the media

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Introduction
Ethical Issues in Business
• Employee-Employer Relations
• Employer-Employee Relations
• Company-Customer Relations
• Company-Shareholder Relations
• Company-Community/Public Interest

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Public’s Opinion of Business Ethics
• Gallup Poll finds that only 17 percent to 20
percent of the public thought the business
ethics of executives to be very high or high
• To understand public sentiment ask:
– Has business ethics really deteriorated?
– Has reporting become more frequent and vigorous?
– Are past acceptable practices becoming no longer
socially acceptable?

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Business Ethics: What Does It
Really Mean?
Ethical Problem
Ethical
Problem
Society’s
Expectations
Actual
Business
Ethics
1950s Early 2000s
Time
Ethics Today vs. The Past

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Business Ethics:
What Does It Mean?
Definitions
• Ethics involves business practices and
moral duty
• Moral conduct is behaviour that is right
or wrong
• Business ethics include practices and
behaviours accepted by society

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Business Ethics
Two Key Branches of Ethics
• Descriptive ethics involves describing,
characterizing and studying morality
– “What is”
• Normative ethics involves supplying
and justifying moral systems
– “What should be”

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Conventional Approach to
Business Ethics
• Conventional approach to business ethics
involves a decision or practice to
prevailing societal norms
– Pitfall: ethical relativism
Decision or Practice Prevailing Norms

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Sources of Ethical Norms
Fellow Workers
Family
Friends
The Law
Regions of
Country
Profession
Employer
Society at Large
Fellow Workers
Religious
Beliefs
The Individual
Conscience

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Ethics and the Law
• Law often represents an ethical minimum
• Ethics often represents a standard that
exceeds the legal minimum
Ethics Law
Frequent Overlap

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Making Ethical Judgments
An act that
has been
committed
Prevailing
norms of
acceptability
Value
judgments of
the observer
compared with

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Ethics, Economics, and Law

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Four Important Ethical
Questions
• What is?
• What ought to be?
• How to get from what is to what should
be?
• What is our motivation for acting
ethically?

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3 Models of Management Ethics
1. Immoral Management—A style devoid of
ethical principles and opposes what is
ethical.
2. Moral Management—Conforms to, too
high standards of ethical behaviour.
3. Amoral Management
– Intentional - does not consider ethical factors
– Unintentional - casual or careless about ethical
considerations and the results to business

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3 Models of Management Ethics
Three Types Of Management Ethics

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Three Models of Management
Morality and Emphasis on CSR

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Moral Management Models and
Acceptable Stakeholder Thinking

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Making Moral Management
Actionable
Important Factors
• Senior management
• Ethics training
• Self-analysis

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Developing Moral Judgment

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Developing Moral Judgment
External Sources of a Manager’s
Values
• Religious values
• Philosophical values
• Cultural values
• Legal values
• Professional values

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Developing Moral Judgment
Internal Sources of a Manager’s
Values
• Respect for the authority structure
• Loyalty
• Conformity
• Performance
• Results

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Elements of Moral Judgment
• Moral imagination
• Moral identification
• Moral evaluation
• Tolerance of moral disagreement
and ambiguity
• Moral obligation

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Elements of Moral Judgment
Amoral Managers Moral Managers
Moral Imagination
Moral Identification
Moral Evaluation
Tolerance of Moral Disagreement
and Ambiguity
Integration of Managerial and Moral
Competence
Moral Obligation

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Selected Key Terms
• Amoral management
• Business ethics
• Compliance strategy
• Conventional approach
to business ethics
• Descriptive ethics
• Ethical relativism
• Ethics
• Feminist Ethics
• Immoral management
• Integrity strategy
• Intentional amoral
management
• Kohlberg’s levels of
moral development
• Moral development
• Moral management
• Normative ethics
• Unintentional amoral
management