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Ethics and Professional Responsibility

Ethics and Professional Responsibility. Chapter 2. What does ethics have to do with the Law? . Ethics - Moral principles and values applied to social behavior. Law is the moral minimum.

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Ethics and Professional Responsibility

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  1. Ethics and Professional Responsibility Chapter 2

  2. What does ethics have to do with the Law? Ethics - Moral principles and values applied to social behavior. Law is the moral minimum. Business Ethics – a consensus of what constitutes right and wrong behavior and the application of moral principles in a business setting.

  3. Bad Faith and Punitive Damages Ethical lapses result in judicial findings of bad faith and the award of punitive damages. Case 2.2 – In re Exxon Valdez ($5 billion punitive damages due to oil spill)

  4. Business Ethics: Duty Vs. Outcome • Duty-Based Ethics • Ethics based upon an underlying concept of duty regardless of the consequences of action taken. • Generally arise from religious belief and/or philosophical reasoning.

  5. Business Ethics: Duty Vs. Outcome • Outcome-Based Ethics • Ethics based upon the consequences of action taken, without regard to any underlying concept of duty or morality. • Sometimes referred to as “situational ethics” or “the end justifies the means.”

  6. Business Ethics: Duty Vs. Outcome • Utilitarianism • Form of outcome-based ethics based on producing the greatest good for the greatest number of people. • Requires a cost-benefit analysis of the negative and positive effects.

  7. Corporate Social Responsibility • The concept that corporations and businesses are citizens of the community should act ethically and be accountable to stakeholders for their actions.

  8. Corporate Social Responsibility • Duties to Shareholders • Corporate directors and officers have duty to act in shareholders’ best interest. • the law holds directors and officers to a high standard of care in performing these “fiduciary duties.”

  9. Corporate Social Responsibility • Duties to Employees - Employers are required by law to provide their employees with a safe workplace, equal employment opportunity, minimum wage, etc.

  10. Corporate Social Responsibility • Duties to Consumers - In marketing a product, the law imposes a duty to warn consumers of the harms that can result from foreseeable misuses of the product.

  11. Corporate Social Responsibility • Duties to the Community - Considering the needs of the community when deciding whether to take or not take certain actions, such as relocating a plant or a large number of employees.

  12. Corporate Social Responsibility • Duties to Society as a Whole - Considering to what extent corporations should act to further societal interests at the expense of the corporation’s own profit-maximizing behavior.

  13. Ethical Standards in Business Johnson Controls case – restrictions on women employees in automotive battery manufacturing facility. Marketing Baby Formula – sales of baby formula in Third World countries.

  14. Ethics in International Situations Monitoring of Foreign Suppliers Foreign Corrupt Practices Act - prohibition of bribery of high-ranking foreign officials -“grease” to ministerial employees is not illegal

  15. Ethics and Social Responsibility End of Chapter 2

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