JANE DIAZ

MR. PAJO

BS-IM

ITETHICS

 

BOOKREVIEW #2

BUSINESS ETHICS: ETHICAL DECISION MAKING AND CASE

by: Ferrell and Fraedrich

HF5387

 

 

Chapter III – APPLYING MORAL PHILOSOPHIES TO BUSINESS ETHICS

“Moral Philosophy refers to the set of principles or rules that people use to decide what

is right or wrong.”

 

 

Business ethics involves the application of general ethical principles to business

behavior. Ethics may be defined as a query into the nature of morality where the term

morality is taken to mean moral judgments, standards and rules of conduct. Moral

philosophies help explain why a person believes that a certain choice among

alternatives is ethically right or wrong. Businesspeople are guide by moral philosophies

as they formulate business strategies and resolve specific ethical issues, but they do not

all use the same moral philosophy.

Moral philosophies present some guidelines when resolving conflicts of people

base on what did they experienced and knowing the benefit of people living in groups. In

this chapter moral philosophies are categorized. There are many moral philosophies,

and each one is complex. One is Teleology, it is an action or behavior is acceptable or

right if it is responsible for producing the desired outcomes. In other words it asses the

moral worth of a behavior by looking at its consequences, there are two important

teleological philosophies that often guide decision making in business, the egoism and

utilitarianism.

Egoism it evaluates how right or acceptable a behavior is depending upon its

consequences on the person. While Utilitarianism it holds that actions should be judged

by their consequences; however, unlike egoists, utilitarians claim that behaviors that are

moral produce the greatest good for the greatest number of people. When it comes in

decision making it relies on a systematic comparison of the costs and benefits to all

affected parties.

Fourth is the Deontology, it is an ethical theory holding that acting from a sense

of duty rather than concern for consequences is the basis for establishing our moral

obligation. It regards certain behaviors as inherently right and the determination of

rightness focuses on the individual actor, not society. Unlike utilitarians, deontologists

argue that there are some things that would that we should not do, even to maximize

utility. Deontologists believe that individuals have certain absolute rights and these rights

are:

• Freedom of conscience

• Freedom of consent

• Freedom of privacy

• Freedom of speech

• Due process

 

Next is the Relativist perspective, it is the definition of ethical behavior derived

from the experiences of individuals or groups. It also defines ethical standards using

themselves or the people around them as their basis. It asserts that words such as right,

wrong, justice and injustice derive their meaning and value from the attitudes.

And the last is Virtue ethics, for them morality is contain of virtue, which has to do

with an individual’s attributes and the type of actions that originate from that attribute, it

also been defined as faith, passion, honesty, truthfulness and integrity.

 

 

Chapter VII – THE INFLUENCE OF SIGNIFICANT OTHERS IN THE ORGANIZATION

“Each person in an organization has specialized task or role in helping the organization

achieve its goal.”

 

 

Significant others include superiors, peers and subordinates within the

organization who influenced the ethical decision making process. A role is the part that a

particular person plays in an organization; it refers to the position of the person and also

to the behavior that others expect from someone holding the position. Each person in

the organization has its role to act for. There are many issues can be discussed in this

chapter, it all revolving on how should the organization work or the process of holding

each person in the organization. The most direct answer is that the role of business is to

make a profit. Sensibly, the owner of the business is entitled to the profits. While most

agree that businesses need to make a profit, the concept that businesses exist to

increase shareholder value is not unanimous. It has been claimed that businesses exist

to serve the common good. This is a foundation of socialism, where profit is seen as

mistreatment of the workers.

 

Profit also can affect the relationship of person to another person, and it is not

only base on the attitude but they usually based it on what position they are. They use

their power to control other people. This is what we called the organizational pressure.

Ethical behavior may be function of several dimensions of an organization’s system. The

roles of top management and the superiors or pioneers are extremely important in

developing the ethical decision of an organization.

 

The prospective for individuals and organizations to behave unethically is limitless.

Unfortunately, this potential is too frequently realized. Leadership is not only for people

at the top, everyone can learn to lead by discovering the power that lies within each one

of us to make a difference and being prepared. Leadership is self development or

governing yourself, once you know how to govern yourself, that is the time you can

govern other. Motivation is the force that makes individuals to perform and the factors

that influence human behavior. It is what the objectives be work to achieved and also in

satisfying their objectives in life. Power is defined as the ability or capacity to perform or

act effectively; including the situation where not to act is most effective. There are many

types of power: Reward power, Coercive power, Legitimate Power, Expert power, and

Referent power.

 

 

Chapter IX – DEVELOPMENT OF AN EFFECTIVE ETHICS PROGRAM

“A company must have an effective ethics program to ensure that all employees

understand the values of the business and comply with policies and codes of conduct

that create the ethical climate of the organization.”

 

 

An effective organizational compliance program involve the following codes of

ethics and compliance standards; high level personnel responsible for ethical

compliance program and the delegation of authority; effective communications and

ethical training programs; systems that monitor, audit and enforce ethical standards; and

enforce ethical standards; and efforts needed to keep improving the ethical compliance

program.

 

 

Ethics and integrity are basic and universal values which behaving with integrity

is the right thing to do. Institutionalizing ethical behavior is possible not complex to do,

but needs leadership commitment that integrity wins in the long run and it is good for

business. Ethical behavior can be encouraged by establishing organizational standards

of conducts. A code of ethics must be developed as part of a top management’s desire

or a pioneer’s decision for the organization’s values, rules and policies that support an

ethical climate. Every employee has a responsibility to do the right thing and act in a

legal and ethical manner. This obligation includes reporting actual, suspected or

potential violations of the law or this Code to the Compliance Officer. Violation of any law

is a serious matter and could subject insight of the individual involved to public and

criminal actions, regulatory actions and private lawsuits. Employees who violate the law

can be severely penalized, including significant prison term.

 

 

An ethical compliance program can be significantly enhanced by having a high

level manager or committee responsible for the administration and oversight of the

program. The managers who oversee the ethics program are responsible for avoiding

entrustment of people for having misconduct. The purpose of our Compliance Program

is to prevent and detect violations of law or company policy. Compliance Program is

active, involving not only policies, procedures, and activities, but also the commitment of

senior management or pioneers, and the support of all employees, vendors, and agents

to make the program effective.