Transcript Session 2 Slides

MLI51C100 – Corporate
Responsibility and Ethics
SESSION #2 – ETHICS AND
ETHICAL FRAMEWORKS
MAY 10, 2016
DR. MARGARET C. MCKEE
Agenda
 Ethics and Corporate Responsibility
 Context: Capitalism
 Discussion of Framework and Ethical Principles for
Ethical Decision Making


Review of Key Terms
Practice with a Case
 Course Administration
Ethics and
Corporate Responsibility
CONTEXT:
CORPORATIONS
AND CAPITALISM
The Corporation
WHAT IS ITS PURPOSE?
Economic Goals vs. Social Goals
Economic
Economic [sic]
man and social
[sic] man must
coexist.
Societal
Capitalism
WHAT ARE ITS
FUNDAMENTAL
CHARACTERISTICS?
WHAT WILL IT TAKE FOR
CAPITALISM AND
CORPORATIONS
TO BE RECONSTRUCTED?
What is Conscious Capitalism?
 Interconnectedness
 Integrative thinking
 Holistic wealth – 3BL
 Aligns purpose of business, interest of various
stakeholders, and practice of capitalism
 Collaboration between companies and government,
and companies and NGOs
 Human dignity and just community
 Are the company’s goods “truly good” and do their
services “truly serve”?
Wang et al., 2012
Corporate Citizenship Stages and Challenges
Closing Thoughts
 The Future: Unbounded or Limited?

Mirvis & Googins (2006) suggest there is potential for either
 Corporations so seem to be making increasingly larger
investments in CR activities

Authenticity of these commitments is sometimes questionable
 Stakeholder groups also becoming increasingly active and
sophisticated,

Putting greater pressure on governments and companies to change
 May be the recipe that is needed to promote real and
enduring change
Ethical Decision Making
A FRAMEWORK
AND COMMON
SENSE ETHICAL
PRINCIPLES
What is ethics?
 Concerned with how each of us as individuals should
live and act; what kind of person each of us should be

This meaning of ethics sometimes referred to as “morality”
What is “business ethics”?
 Examines business institutions from a social
perspective

Does business meet the moral expectations of society?
 E.g.
Live up to the rules, standards, codes or principles of
morally appropriate behaviour by business institutions
What is integrity?
 Oxford English dictionary definition:
“the quality of being honest and having strong moral
principles
 the state of being whole and undivided”

oxforddictionaries.com/definition/english/integrity
What is integrity in business?
 “The appropriateness of a corporation’s behaviour
and its adherence to moral guidelines acceptable
to society

E.g. honesty, fairness and justice”
Source: Sexty (2014)
EDM:
A DualProcess
Approach
 Cognitive Approach
 Traditional view that sees individuals
using logic and reason to solve ethical
problems after careful deliberation

Emotions viewed with suspicion as they
could undermine moral reasoning
 Emotional Approach
 Newer views suggest that other factors
are also influential

Intuition and social norms
Components of Moral Action
 What leads to moral action?
 James Rest concluded that ethical action is the result of
four psychological sub-processes:
1. Moral sensitivity (recognition)
2. Moral judgment
3. Moral focus (motivation)
4. Moral character
James Rest, University of Minnesota
Components of Moral Action
 What leads to moral action?
 James Rest concluded that ethical action is the result of
four psychological sub-processes:
1. Moral sensitivity (recognition)
2. Moral judgment
3. Moral focus (motivation)
4. Moral character
James Rest, University of Minnesota
Component 1:
Moral Sensitivity
RECOGNIZING
THE PRESENCE OF
A MORAL OR ETHICAL
ISSUE
BUSINESS ETHICS
AND
MORAL AWARENESS
Ethical Relativism
 Belief that answers to
ethical dilemmas
depend on the
situation

No universal standards
or rules to guide or
evaluate behaviour

Everything is relative…
to individuals and
cultures.
Component 2:
Moral Judgment
MAKING DECISIONS ABOUT
WHAT IS THE RIGHT OR
WRONG THING TO DO
IN A GIVEN SITUATION
Component 2. Moral Judgment
 Models of cognitive development provide important
insights into the process of ethical decision making.
1. Contextual variables play an important role in shaping
ethical behavior.
2. Education fosters moral reasoning.
3. A broader perspective is better.
4. Draw on widely accepted ethical approaches
Component 2: Moral Judgment
 Kohlberg’s 3 Levels of Moral Development
 Level I: Pre-Conventional Thinking

Level II: Conventional Thinking

Level III: Postconceptual or Principled Reasoning
What are
possible
ethical
blind spots
we can
have?
Categories of Rationalization
 Pleading Ignorance “I’m not hurting anyone”
 Shifting the Blame “Everybody does it”
 Advantageous Comparison “This is nothing compared to…”
 Moral Justification “I’m protecting the company, employees, my
family…”
 Euphemistic Labeling I’m trying to level the playing field”
 Victim Takes the Fall“They had it coming”
Source: Murphy, P. (2011). How do ethical people commit fraud? Retrieved from
http://business.queensu.ca/news/2011/mar_01_how_do_ethical_people_commit_fraud.php
Decision-Making Formats
 Decision-making guidelines or formats can help us
make better ethical choices.
 Taking a systematic approach encourages teams and
individuals to:



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
Carefully define the problem,
Gather information
Apply ethical standards and values
Identify and evaluate alternative courses of action, and
Follow through on their choices.
Audi’s 5-Step Ethical Decision Making Model
1.
2.
3.
4.
5.
Identification and Classification of Obligations
Identification of Conflicts of Obligations
Ethical Assessment of the Obligations
Selection of Ethically Viable Options
Decision on Course of Action
Ethical Principles of Conduct
 Utilitarianism
 Act in ways to ensure “greatest good for greatest number”
 Kant’s Categorical Imperative
 Act according to the rules that you would want all other
rational people to follow, as if it were a universal law.
 Never treat a person as a means to an end
 Golden Rule
 Act in ways to ensure you treat others as you would like to be
treated
Wisdom of Various
Faith Traditions
Ascribe not to any soul that which thou
wouldst not have ascribed to thee, and
say not that which thou doest not. This
is my command unto thee, do thou
observe it. BAHA'I (19th c. AD)
Do not to others what ye do not wish
done to yourself -This is the whole
Dharma, heed it well.
HINDUISM (13th c. BC)
Hurt not others in ways that you
yourself would find hurtful.
BUDDHISM (6th c. BC)
No one of you is a believer until you
desire for another that which you
desire for yourself.
ISLAM (7th c. AD)
Do unto others as you would have them
do unto you.
CHRISTIANITY (c. 1st century AD)
What is hateful to you, do not do to
your neighbor.
JUDAISM (14th c. BC)
Be not estranged from another for, in
every heart, Pervades the Lord.
SIKHISM (15th c. AD)
The Focus of
Ethical Principles
Deontological
Teleological
Virtue
Expanded “Common-Sense” Ethical Principles
1.
Justice
6. Beneficence
2. Non-injury
7. Self-improvement
3. Fidelity
8. Gratitude
4. Veracity
9. Liberty
5. Reparation
10. Respectfulness
Viable Options and Moral Imagination
 Pat Werhane’s (1999) suggested steps:
 Focus on the “particular”
 Try to step back and be “objective”


Make sure your values, emotions, assumptions and beliefs are not
affecting your view of things
Brainstorm possible and doable options that promote ethical
behaviour
Focus on what you “should” do and don’t just default to what’s
fast, easy, tried before, etc.
 Remember it needs to be economically viable

The Universalization Test
IS YOUR DECISION
JUSTIFIABLY USABLE
AS A GUIDING PRECEDENT
FOR FUTURE DECISIONS?
Concluding Comments
 Reliance on personal value judgments and moral
standards in decision making can be problematic

Values and moral standards not seen as being objective,
consistent or timeless

Bias and self-awareness problematic
 Need to be critical thinkers
 Decision making frame works provide systematic,
thoughtful approach

Ethical principles thought to provide solid foundation

Valid across countries, cultures and times
Tomorrow’s Session

Topic: Stakeholders and Stakeholder Engagement

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Preparation: Read Domestic Garment Company Case


Local and Global Actors in CSR
Consider who the company’s stakeholders are and what
obligations the company has to these various parties
Complete Individual Assignment
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Submissions due at 11:55 pm on Wednesday (note new time)