Becg-1 Ethics, Morals And Values

BECG Pt.-I Introduction to business ethics

BECG-1: Ethics, Morals and Values

Ethics , Values

Morals and   

Understanding Morality §

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Several years ago, B.F. Goodrich-manufacturer of vehicle parts was granted contract to design, test and manufacture aircraft brakes for the A7D , a new airplane, the Air Force was designing To conserve weight: Goodrich guaranteed: o o o

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Weight of their compact brake: not more than 106 pounds Contain max four braking discs or “rotors” Stop aircraft within certain specified distance

Contract quite lucrative for the company Kermit Vandivier- a Goodrich employee, given task of working with Goodrich engineers to write up report of tests run on the brakeGovernment not likely to question and even less likely to repeat the test

§ Vandivier- found and wrote, when the small brake was tested, the brake linings on the rotors repeatedly “disintegrated” because “there simply was not enough surface area on the disks to stop the aircraft without generating the excessive heat that caused the lining to fail” § His superiors told that regardless of what the brake does on tests, we are to qualify § After several tests, Vandivierwas told to write report that brake passed the tests § Vandivier explained to his superior that “ the only way such a report could be written was to falsify the test data” to which

Moral Standards • Vandivier’s beliefs: examples of Moral standards – It is right to tell the truth – It is wrong to endanger lives of others – Integrity is good and dishonesty is bad

• Morality: the standards that an individual or a group has about what is right and wrong or good and evil • Moral Standards: the norms about the kinds of actions believed to be morally right and wrong as well as the values placed on the kinds of objects believed to be morally good and morally bad – For example: • Always tell the truth • It is wrong to kill innocent people • Actions are right to the extent they produce happiness

– Moral values can be expressed as statements describing objects or features of objects that have worth, such as : • Honesty Morality : set isofgood beliefs and practices about how to • Injustice is bad lead a good life

Sources of Moral Reasoning Religion

–Reflects the basic tenants of religious faith .

Culture / Community

–Reflects commonly shared moral values

Codes of Professional Conduct

–Reflects guidelines for professional conduct .

Moral Theory

–Basic Ethical Theories and Principles

Here are some examples of statements which express moral judgments : 1 . Dumping chemicals in the rivers is wrong and ought be banned . 2 . It ’ s wrong that our company is trying to avoid the regulations and it should stop . 3 . He ’ s a bad person — he never treats people well and doesn ’ t seem to respect anyone.

Moral judgments tend to be characterized by words like ought , should , good and bad . However , the mere appearance of such words does not mean that we automatically have a statement about morals

A person ’ s moral standards are first absorbed as a child from family , friends , and various societal influences like Church temple , television , magazines , music and associations As person grows up , with experience , learnings and intellectual development - revised by maturing person Øsome discarded and new ones adopted We do not always live up to the moral standards we hold , that is , we do not always do what we believe is morally right , nor we always pursue what we believe is morally good

Non Moral Standards •

Vandivier later stated:

My job paid well, it is pleasant and challenging, and the future looked reasonably bright. My wife and I had bought a home…………………………. If I refused to take part in the A7D fraud, I would have to either resign or to be fired. The report would be written by someone anyway, but I would have the satisfaction of knowing I had no part in the matter. But bills are not paid with personal satisfaction, nor house payments with ethical principles. I made my decision. The next morning I telephoned [ my We can summarize , in and Vandivier ’ s I case , that he believed superior] told him was ready to probably begin the qualification that : report –

oReports should be written with good grammar oGetting fired from a well paid , pleasant , and challenging job took precedence over a truthful report oHe is right to follow the law

M o ra l sta n d a rd s ca n b e co n tra ste d w ith sta n d a rd s , w e h o ld a b o u t th in g s th a t a re n o t m o ra l: –Standards of etiquette , by which we judge manners as good or bad –Standards we call ‘ law ’, by which we judge legal right and wrong –Standards of language by which we judge what is grammatically right and wrong –Standards of aesthetics by which we judge good and bad art –Athletic standards by which we judge how well a game is played

Non Moral Standards: the standards by which we judge what is good or bad and right or wrong in a non moral way

Five Characteristics of Moral Standards 1 ) Matters that we think can seriously injure ( theft , rape , enslavement , murder , child abuse , assault , fraud , law breaking and so on ) or seriously benefit human beings 2 ) Not established or changed by the decisions of particular authoritative bodies ( laws and legal standards are established by authority of legislature - validity of moral standards does not rest on voting procedures but on adequacy of the reasons that are taken to support and justify them so long these reasons are adequate , standards remain valid ) 3 ) Should be preferred to other values including ( specifically ) self interest 5 ) Based on impartial considerations - “ the moral point of view ”- that does not evaluate standards according to whether they advance the interests of a particular individual or group , but one that goes beyond personal interests to a “ universal standpoint ” in which everyone ’ s interests are impartially counted as equal 7 ) Associated with special emotions and a special vocabulary - if I act contrary to a moral standard , I will normally feel guilty , ashamed - I will characterize my behavior as “ immoral ” or “ wrong ”

ØIn Vandivier case , it was clear that lying in the government  report and endangering lives of pilots were felt to be serious  harms and so both were moral matters ØHe should have chosen the moral values of honesty and respect for life over non moral values of keeping his well paid , pleasant and challenging job ( Means it is wrong to choose self interest over morality ) ØVandivier later testified before the congress ( in an attempt to make things right ) that he later felt shame and remorse about what he did

Ethics E th ics : th e d iscip lin e th a t e x a m in e s o n e ’ s m o ra l sta n d a rd s o r th e m o ra l sta n d a rd s o f a so cie ty - h o w th e se sta n d a rd s a p p ly to o u r liv e s a n d w h e th e r th e se sta n d a rd s a re re a so n a b le o r u n re a so n a b le - th a t is w h e th e r th e y a re su p p o rte d b y g o o d re a so n s o r p o o r o n e s , in o rd e r to a p p ly th e m to co n cre te situ a tio n s a n d issu e s qA p e rso n sta rts to d o e th ics w h e n h e / sh e ta k e s th e m o ra l sta n d a rd s fro m fa m ily , ch u rch a n d frie n d s a n d a sk s : oW h a t d o th e se sta n d a rd s im p ly fo r th e situ a tio n s in w h ich I fin d m y se lf? oD o th e se sta n d a rd s re a lly m a k e se n se ? oW h y sh o u ld I co n tin u e to b e lie v e in th e m ? oW h a t ca n b e sa id in th e ir fa v o r a n d w h a t ca n b e sa id a g a in st • Ethics th e m ?is the formal study of moral standards and conduct. For oA re this th e yreason, re a lly the re astudy so n a bofleethics fo r m is e also to h often o ld ? called "moral philosophy." What is good? What is evil? How should I behave - and oA re why? th e irHow im p should lica tio nI sbalance in th ismy o r needs th a t pagainst a rticu lathe r situ a tioofn others? needs re These a so n a are b le ?some of the questions asked in the field of ethics, a •

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branch of philosophy which has some of the most immediate and obvious consequences for how we live our lives. Ultimate aim of ethics is to develop a body of moral standards that we feel are reasonable to hold- standards that we have thought about carefully and have decided are justified standards for us to accept and apply to the choices that fill our lives

Ethic s :

A rational reflection on

Examining: What is Right/ Wrong •

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Vandivier initially had apparently chosen to accept the moral standard that one has an obligation to tell the truth, and so he felt that in this particular situation it will be wrong to write a false report on the brakes But let us ask, whether writing what he felt was a false report was really wrong in his particular circumstances? – He had several financial obligations: towards himself and other people

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• Just married • Bought a house-mortgage payments to be made each month • Support to be provided to his family If he does not write report as desired- gets fired- not able to meet these obligations What is basis of his obligation to tell the truth and whether this greater or lesser than a person’s obligations towards himself and family? His obligations to his employer? Does it outweigh the obligation not to write a false report? All seniors insisted to write a qualifying report-If something went wrong with the brake or the contract, the company will be held accountable, not the individual- a lower level employee Does the moral right to make a decision belong to the party who will be held accountable for the decision?

Morality & Ethics: the Difference T h e d iffe re n ce b e tw e e n e th ics a n d m o ra ls ca n se e m so m e w h a t a rb itra ry to m a n y , b u t th e re is a b a sic , th o u g h subtle ( difficultt o perceive or describe ) , d iffe re n ce . M o ra ls d e fin e p e rso n a l ch a ra cte r, w h ile e th ics stre ss a so cia l sy ste m in w h ich th o se m o ra ls a re a p p lie d . In o th e r w o rd s , e th ics p o in t to sta n d a rd s o r co d e s o f b e h a v io r e x p e cte d b y th e g ro u p to w h ich th e in d iv id u a l b e lo n g s . T h is co u ld b e n a tio n a l e th ics , so cia l e th ics , co m p a n y e th ics , p ro fe ssio n a l e th ics , o r e v e n fa m ily e th ics . S o w h ile a p e rso n ’ s m o ra l co d e is u su a lly u n ch a n g in g , th e e th ics h e o r sh e p ra ctice s ca n b e o th e r- d e p e n d e n t. • One of the most important characteristics of moral judgments is that they express our values. Not all expressions of values are also moral judgments, but all moral judgments do express something about what we value. Thus, understanding morality requires investigating what people value and why.

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What is Ethics? 

Latin word ‘Ethicus’ Greek word ‘Ethikos’ meaning character or manners.

§ systemizing, defending and recommending concepts of right and wrong behavior. § Science of moral, moral principles and recognized rules of conduct.  Ethics is the study of how people should act Ethics also refers to the values and beliefs related to the nature of human conduct –Based on ethical standards or moral orientation

Ultimate aim of ethics is to develop a body of moral standards that we feel are reasonable to hold standards that we have thought about carefully and have decided are justified standards for us to accept and apply to the choices that fill our lives Ethics is a normative study - an investigation that attempts to reach normative conclusions - that is conclusion about what things are good or bad or about what actions are right or wrong - aims at discovering

The Fall of Arthur Andersen Opening Case • Arthur Andersen founded the firm, making its credo, “Think straight, talk straight.” His commitment to integrity became known as the “Andersen Way.” • For years after his death the firm maintained high standards. • Consulting services became a huge part of the firm that eventually broke away after a battle with the accounting side of the business. • A new consulting group within Arthur Andersen emerged; To cut costs, partners were forced to retire at age 56, removing a layer auditors were evaluated on the amount of leadership experienced in the Andersen Way. of additional services sold, auditors to clients. pressure became reluctant to alienate clients resulting Under they • in a series of disgraceful audit performances. At Enron an Arthur Andersen auditor was coerced into writing an opinion letter stating that certain tax audits were legitimate, leading to the collapse of both companies.

Arthur Andersen founded a culture of rectitude that warped because several generations of management allowed the Andersen Way to be undermined.

Morals and Values Ethics: A study of right and wrong behavior –with the aim of defining what is right and wrong Ethics - is a field of enquiry Morality- is object of enquiry

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Morality: The standards that an individual or group has about what is right and wrong or good and evil

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Moral Standards: The norms about the kind of actions

believed to be morally right and wrong as well as the values placed on the kinds of objects believed to be morally good and morally bad

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Values are defined in literature as everything from eternal ideas to behavioral actions. – – – –

Criteria for determining levels of goodness, worth or beauty. Act of valuing Part of the affective system Also provide an important filter for selecting input and connecting thoughts and feelings to action

–Moral justification is the process of reinterpreting immoral behavior in terms – – higher purpose .

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§V a lu e s re p re se n ts b a sic co n v ictio n s ( ce rta in ty ) th a t “ a specificmode of conduct or end - state of existence is p e rso n a lly o r so cia lly p re fe ra b le to a n o p p o site o r co n v e rse m o d e o f co n d u ct o r e n d - sta te o f e x iste n ce ” . §V a lu e s la y fo u n d a tio n fo r u n d e rsta n d in g o f a ttitu d e s a n d m o tiv a tio n §G e n e ra lly in flu e n ce a ttitu d e a n d b e h a v io r §

Types of Values –- Rokeach Value Survey Te rm in a l V a lu e s Desirable end-states of existence; the goals that a person would like to achieve during his or her lifetime.

In stru m e n ta l V a lu e s Preferable modes of behavior or means of achieving one’s terminal values.

Values in the Rokeach Survey

Values in the Rokeach Survey (cont’d)

L e v e ls o f M o ra l D e v e lo p m e n t 1 . Preconvention Self-interest motivates behavior to meet one’s own needs to gain rewards while following rules and obedient to authority to avoid punishment. 2 . Conventional Living up to expectations of acceptable behavior defined by others motivates behavior to fulfill duties and obligations. Common for followers to copy the behavior of the leaders and group. 3 . Post conventional Behavior is motivated by universal principles of right and wrong, regardless of the expectations of the leader or group. One seeks to balance the concerns for self with those of others and the common good.

6 stages of moral development •

Pre-conventional (personal interest) – Do what you are told, selfinterest – Others have interests too, but self interests predominate

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Conventional (maintaining norms) – Conform, cooperate with others – Obey the law for good of society

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E te rn a l V a lu e s o f M a n k in d

Derived from Great Religions v Mutual love and trust v Equity v Self fulfillment through action which bring closer to GOD . vGod works through People

Golden Rule

Post-conventional

 – Universal principles Christianity - Whatever you want men to do to you , do also to – Reciprocity, social justice Islam No one of you is a believer until he loves for his

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neighbor what he loves for himself . Buddhism – Hurt not others with that which pains yourself Hinduism – This is the sum of duty ; do naught unto others what you would not have them do unto you . Bahai – And if thine eyes be turned toward justice , choose thou for thy neighbor that which thou choosest for thyself . Jainism – A man should wander about treating all creatures as he himself would be treated 

How Do You Want To Be Treated? vI vI vI vI vI vI

want to be valued. want to be appreciated. want to be trusted. want to be respected. want to be understood. do not want others to take advantage of me.

Three Models of Management Ethics Amoral Amoral Management Management

Moral Moral Management Management

Immoral Immoral Management Management

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Three Models of Management Ethics

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Characteristics of Moral ØManagers

ØConform to high level of ethical or right behavior Ø Conform to high level of personal and professional standards Ø Ethical leadership is commonplace ØGoal is to succeed within confines of sound ethical precepts Ø High integrity is displayed ØEmbrace letter and spirit of the law ØPossess an acute moral sense and moral maturity ØAre the “ good guys ”

Intentionally Characteristics of do wrong Immoral Ø Selfcentered and Managers

self absorbed Ø Care only about self or  organization’s profits Ø Actively oppose what is  right, fair, or just Ø Exhibit no concern for  stakeholders Ø Are the “bad guys” an  ethics course

Characteristics of Amoral Managers

Intentionally Amoral Managers:

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Don’t think ethics and business should “mix” Business and ethics are existing in separate spheres A vanishing breed

Unintentionally Amoral Managers:

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Don’t consider the ethical dimension of decision making Don’t “think ethically” Have no “ethics buds” Well-intentioned, but morally casual or unconscious Ethical gears are in neutral Duryodhan said , “ I know what is right but I am not able to act accordingly . I also know what is wrong but I am not able to restrain myself doing it ” Indian philosophy says that we become what we think . Western philosophy also accepts this