Week 1.1 personal integrity and social responsibility

1. Professional Ethics
Week 1
Introduction to the Course
Dr. Russell Rodrigo

2. Week 1 Learning Objectives:
1. Explain why ethics is important to business
2. Distinguish the ethics of personal integrity from the ethics of
social responsibility.
3. Describe ethical decision-making as a form of practical
reasoning.

3. What Contributes to Having a Good
Character?
Honesty
Integrity
Fairness
Responsibility
Respect for
others
Hard work
Positive attitude

4. Think About It…
Would an honest person cheat on a test?
Would a responsible person skip classes?
Does a bully show respect for others?
Are athletes hard working?
Do you know people who are known by
some of these traits? Are they known for
having these traits or, perhaps, for not
having them?

5. What is your personal
credo?
A credo
- is a virtue in action.
- defines you and your ethical boundaries.

6. How do I want to be remembered?
Your personal
credo with
introspection on
two areas of
questions:
1. Who are you?
2. What are the things that you
would never do to get a job? To keep
a job? To earn a bonus?

7. © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website,
in whole or in part.
7
The Power of a Credo
1. Who are you? Without your parents, the money, the
job title, the salary, the car, the house, who are you?
2. What things would you never do to be successful?
What lines would you never cross in order to get a
job? To get results? To meet goals?

8. Examples of Credos
“I would never withhold evidence in a case.” (from a
prosecutor)
“I would never sign a document that I know contains
false information.”
“I would never compromise safety for staying on
schedule.”
© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in
part.

9. Our Legacy
“Fifteen years from now, my son will meet the son or
daughter of one of our people who died that day, and I
will be judged on what that kid tells my son about what
Sandler O’Neill did for his family.”
– Jimmy Dunne III
Sole surviving senior partner from
9/11/01 WTC attacks
One of 17 survivors out of a firm of 83
9
© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in
whole or in part.

10. Are Ethics & Values the Same?
Ethics is the code of conduct that helps determine what is
good, right, and proper.
Values are the principles, goals, or standards held or accepted
by individuals, groups, and societies.

11. How Do Ethics Relate to Business?
Good ethics = Good business!
Business
legally
humanely

12. Important Ethical Questions!
1. Is it against the law? Does it violate company or
professional policies?
2. What if everyone did this? How would I feel if
someone did this to me?
3. Am I sacrificing long-term benefits
for short-term gains?

13. Ethics as Good Business
fined, jailed,
fired, or even
lose license.
Unethical
business
/businessperson

14. How human beings
should properly live
their lives.
It will not change
your capacity to
think, but it could
stimulate your
choices of what to
think about.
Ethics Course?

15. So, what do we mean by
“Ethics?”

16. ETHICS IS NOT THIS:

17. WHAT IS “ETHICS?”
At its most basic level, ethics is concerned with
how we act and how we live
our lives.

18. WHAT IS “ETHICS?”
Practical - having to do with how we act, choose,
behave, do things.
Normative - deals with our reasoning about how
we should act.
HOW SHOULD WE LIVE?

19. Individually
How should I live my life
How should I act
What should I do
What kind of person I
should be
Morality
Value structures
Defined by our moral systems
Personal
Integrity
How should WE
live?

20. Refuse to lie
Personal
Integrity
Moral value of
honesty

21. To know ‘How we should live’
We therefore make a very real choice as to
whether we answer them deliberately or
unconsciously.
Why study
Ethics?
‘The unexamined life is not worth living’.
– Socrates, 2000 years ago

22. How should ‘WE’
live?
Collectively
How we live together in a
community
How corporations and institutions
ought to be structured
Questions justice,
policy, law, philosophy, etc.
Social Ethics
SOCIAL
RESPONSIBILITY

23. Social Responsibility
Businesses’
Obligations
do what is best for
the good of society.
provide safe
products
create jobs
protect the environment
Conflict of interest is when a business is tempted to put profits
before social welfare.
safe working conditions
equal treatment
fair pay

24. Responsibility to Customers
The Food & Drug Administration
(FDA) protects consumers from
dangerous or falsely advertised
products.
 1982 Johnson & Johnson crisis

25. Responsibility to Employees
The Equal Pay Act (passed in 1964) requires
that men and women be paid the same
wages for doing equal work.
The Americans with Disabilities Act bans
discrimination against persons with a
physical or mental disability.
 50 million workers are currently covered
by this law

26. Responsibility to Society
Environmental responsibility
In 1970, the Environmental
Protection Agency (EPA) was
created. It enforces rules that
protect the environment and
control pollution.
Businesses who are
environmentally responsible
have better public relations.
 The Body Shop, The Los Angeles
Times, Honda, and Toyota
incorporate environmental
policies into their business.

27. Personal Integrity Vs. Social
Responsibility?
Responsibility to Customers
Responsibility to Employees
Responsibility to Society
What should I
do? How should
I act?
VS

28. This aspect of business ethics asks us to
examine business institutions from a social
rather than an individual perspective.
We refer to this broader social aspect of ethics
as decision-making for social
responsibility.
Personal Integrity Vs. Social
Responsibility?

29. Group Discussion
Should AARON FEUERSTEIN
rebuild in Malden and Pay His
employees in the meantime?

30. Decision Point: AARON FEUERSTEIN
Group Discussion
1. Should Aaron Feuerstein rebuild in Malden and pay his employees in the
meantime?
2. What facts would be helpful as you make your judgments about Feuerstein?
3. How many different ethical values are involved in this situation?
4. What kind of man is Feuerstein? How would you describe his actions after the
fire? Can you describe the man and his actions without using ethical or
evaluative words?
5. Whose interests should Feuerstein consider in making this decision? How many
different people were affected by the fire and the decision?
6. What other options were available for Feuerstein? How would these
alternatives have affected the other people involved?
7. Were Feuerstein’s actions charitable, or was this something he had a duty or
obligation to do? What is the difference between acts of charity and
obligatory acts?
8. What do you think of Feuerstein’s decision? What would you have done had
you been in his position?

31. SOME FACTS:
2003 Malden Mills lost customers while the new mill was being built, and
three warm winters have hurt sales of Polartec. The company is also $140
million dollars in debt.
In January 2007, current CEO Michael Spillane announced that Malden
Mills would file for bankruptcy again and would be sold to the Gordon
Brothers Group of Boston.[2][3]
However, in February 2007, the assets of Malden Mills were purchased by
a newly formed company called Polartec, LLC which is owned by Chrysalis
Capital Partners of Philadelphia, Pennsylvania.[4]
June 28, 2007, the federal Pension Benefit Guaranty Corporation said it
would take over the underfunded (by 49%) Malden Mills pension plan,
which covers about 1500 employees. PBGC said the sale of Malden Mills
assets meant that the pension plan would be abandoned because the
company missed a $1.7 million pension payment.[7]

32. Decision Point: AARON FEUERSTEIN
1. Should Aaron Feuerstein rebuild in Malden and pay
his employees in the meantime?
Sample Answer:
Malden Mills was the last major textile manufacturer in town and, with 2,400
employees, it supplied the economic lifeblood for its surrounding communities.
Considering both its payroll and taxes, Malden Mills contributed approximately
$100 million a year into the local economy. Feuerstein could have used the fire
as an opportunity to follow his local competitors and to relocate to a more
economically attractive area or he could have simply taken the insurance
money and decided not to reopen the business at all. Feuerstein opted to
rebuild the plant at the same location and to retain the jobs in the local
community. He also committed to continue paying his employees and
extended their medical coverage until such time as they could return to work.

33. 2. What facts would be helpful as you make your
judgments about Feuerstein?
Sample answer:
It would be helpful to know;
 the business’ financial situation before the fire
 Feuerstein’s management style prior to the fire
 any contractual obligations the company had to its
employees what alternatives were available and how
feasible each would be.
 Did the firm have a mission statement
 What are other possible sources of “obligations?”

34. 3. How many different ethical values are involved in this
situation?
Sample Answer:
There are a number of different ethical values involved in this situation.
 What Feuerstein should consider as CEO of the company
 what are his contractual obligations
 his social responsibilities, his rights/duties and the rights/duties of the
employees
 What is the fair thing to do, what is the loyal and kind thing to do in this
situation
 and what might a person of “virtue” do under these circumstances?

35. 4. What kind of man is Feuerstein? How would you describe
his actions after the fire? Can you describe the man and his
actions without using ethical or evaluative words?
Sample Answer:
 Feuerstein seems to be a loyal man, dedicated to his employees and his company,
 He is compassionate toward others. After the fire, Feuerstein displayed his
compassion by promising to pay his employees and extend their medical benefits
until the mill could be reopened.
 He demonstrated courage in deciding to undertake a massive rebuilding effort for
the mill.
 He also showed personal integrity by keeping the jobs in the community instead of
moving them somewhere else just to save some money, and offering to continue
to pay for medical coverage made him seem extremely caring and generous in
spirit. He is aware of the needs of the people in the area and is willing to do
whatever it takes to make sure their needs are attended to, to the extent possible.

36. 5. Whose interests should Feuerstein consider in making this
decision? How many different people were affected by the
fire and the decision?
Sample Answer:
Feuerstein considered the business interests of the company
(which decision made the most financial sense) and its
stockholders, as well as consider the interests of the
employees, the managers, the community, the apparel
companies to whom Malden Mills supplied Polartec fabric,
and even the end-use customers who purchased clothing
made of Polartec fabric. Ultimately, there were many
different groups of people affected by the fire and the
decision - stakeholders at every level would feel the effects.

37. 6. What other options were available for Feuerstein? How
would these alternatives have affected the other people
involved?
Answer:
i. He could have relocated the company to a location with cheaper taxes
and cheaper labor;
ii. He could have simply taken the insurance money and chosen not to
reopen the business;
iii. He could have vowed to rebuild the company and allowed all current
employees to keep their jobs;
iv. He could have reopened the business but not have paid his workers in
the interim and simply hired available workers at the time of the
reopening.

38. 7. Were Feuerstein’s actions charitable, or was this something he
had a duty or obligation to do? What is the difference between
acts of charity and obligatory acts?
Answer:
Feuerstein’s actions were considered by society to be
charitable, since he did not have any contractual or other legal
obligation or duty to keep the factory open in Malden or to pay
the employees’ salaries until it had reopened. He had several
other options that he could have taken which might have still
been considered to have been reasonable choices; but his
choice was to do what he thought was appropriate, equitable,
and a demonstration of his loyalty to his employees.

39. 8. What do you think of Feuerstein’s
decision? What would you have
done had you been in his
position?
Decision-making:
 What options are available to Feuerstein?
 How would he decide?
 What factors are relevant to the decision?
 What is a rational decision?
Perspectives of ethics:
 What is the difference between doing
something ethically required and doing
something heroic and charitable? On what
grounds do you reach your own opinion
about Feuerstein?
Sample Answer:
His decision remarked that
what he did is what he
considered to be “right” for his
employees and for the
community as a whole.
Knowing the mill was the hub
of the community’s economy,
he considered that, without
these jobs, his employees
would have no way of
supporting themselves. It was
important for him to keep the
business going and keep it in
the local community.