Business Ethics-2

Introduction

to Business

Ethics:

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21

Simply having strong beliefs about what is right and wrong and basing them on the proper sources may have little relationship to what one does. Type II Ethics is the one believes and how one what one considers wrong E.G. A student knows answer sheet but does so. sense.

strength of the relationship between what behaves. Everyone would agree that to do is unethical. it is wrong to look at another's 'examination The student is being unethical in a type II

1.14 Stakeholder Model of the Corporation

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Fig. 1.8 A Stakeholder Model of the Corporation

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Figure 1.8 above d~picts the stakeholders in a typical large corpJration. Corporations consist of stakeholders. that is. groups and individuals who benefit or harmed by. and whose rights are violated or respected by corporate actions. The concept of stakeholders is a generalisation of the notion of stock holders. who themselves have some special claim on the firm. Similar to stock holders have a right to demand certain actions by management. so do other stakeholders have a right to make claims. The stakes of each are reciprocal, since each can affect the other in terms of harms and benefits as well as rights and duties.

1.15 Ethics and Business We shall analyse the relationship between Etpics . Ethics conflicts with profits. whereas . Business always choose profits over ethics

and Business:

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Chapter - 10

10.1 Privacy I.sues 10.1.1 Introduction The dictionary meaning of privacy is freedom from intrusion or public attention. Though privacy is a relatively recent concept - public concern is clearly increasing, . primarily in response to privacy invading technologies. The problems facing employees, consuI1)ers and internet uses are similar, so also the solutions. There is greater agreement found in the ends than on the means. Even the ends are in dispute. Americans always feel that they value privacy. Yet, they give up a great deal for convenience and material gain. The technologies that threaten privacy have brought us many benefits. Finding the right means, is a great challenge to business firms which must meet employee and consumer expectations as they utilise new technologies. More than many business ethics problems, protecting privacy requires a coordinated solution involving many parties. A solution is to be found. The focus of businesses will remain on developing and implementing private policies. 10.1.2

Value of Privacy

We value privacy as so high and it ought to be protected as a right. We desire to have a sphere of our life in which others do not possess certain information about us. The arguments developed by philosophers and legal theorists fall into two categories.

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Utilitarian argument that appeal to consequences. Kantian argument that link privacy to being a person or having respect for persons.

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Ethics in Human Resource Management (HRMJ: 277 f\Vr.:gJ The utilitarians say that great harm is done to' individuals when inaccurate or incomplete information collected by an employer is used on the basis for making important personnel decisions. 10.1.3 Definition Definition of privacy is elusive. The difficulty 'is, due to diverse nature of the many different situations in which. claims of a right of privacy are made. Warren and Brandeis holds that privacy is the right to be let alone. The aim of privacy laws. they thought. should be to protect 'The privacy of private life' from unwanted possibility and their proposals all deal with reacts on the publication of information about the private lives of Individ~als. Brandeis said later on that the right of privacy is 'the right to be

letalone - the most comprehensive of rights and the right most valued ; by civilised men.' Justice Williams J. Brennan expr~ssed the view regarding the birth " control case. is that: .

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If the right to privacy means

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it is the right of the

-, individual, married, or single, to be free from unwarranted government ,I invasion into matters so fundamentally affecting a person as the decision whether to bear or beget a child.

Many critics say that the phrase 'to be let alone' is broad. Individuals have a right 'to be let alone' in matters of religions and politics. Workers have no right to be free of supervision. Legal

I

restrictions on religious practices, such as snake handling or on political activities (making of political contributions) do not involve , violations of privacy. Alan F.Westin has defined privacy as 'It is the claim of individuals to determine for themselves when. how, and to what extent Information about them is communicated to others.' Here it is expressed in terms of control over information about ourselves. This definition is toobroad and too narrow.

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Richard B.Parker observes that Not every loss or gain of control overinformation about ourselves is a gain or loss of privacy. W.A.Parent defines privacy as 'The condition ~ undocumented personal knowledge about one possessed ,&

of not having by others.' This

definition of privacy holds that a person is in a state of privacy when certain facts about that person are not known by others. As per \V.A.Parent 'personal knowledge' means that it does not mean all information about ourselves but only those facts which most individuals ina given society at any given time do not.want widely known. Definition Isto be restricted to undocumented personal information, because some facts that individuals commonly seek to conceal are a matter of public record and can be known without prying into their private'lives.

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-.".'"r '~()",SClENCE

.-\;\:[) CORPORATE

CO~SCIE:-,;cr

CULITHE

Ethics ~md leadership education within the corporation

Recent developments: US Supreme Court Ruling (January 20(5) DeSI'i:c' the positin.' power and innucnce that the US Federal Sentencing guidelines have had since 1991 espeCIally the guidelines for organizations recent court challenges han' raised problems. To what extent do the mandated sentences built 11110the guidelines infringe upon the right to a trial by jury (of bnth individuals and organizations)? The Supreme Court issued a lnng-awaited decision on the constitutionality of the federal guidelines (individual and organizational) in Uniled States v. Boolw', US, No. 04-104, 1/12/05. A '5 4 majority of the cnurt held tl'll the federal guid<.'lines \'inlate rhe Sixth Amendment's right to trial by jury by r<.'quiring judges to increase sentences on the basis nf facts not found by a jury. However, a slightly different five-member majnrity ruled that the remedy is t\1I" judges to treat the guidelines as advisory rather than mandatory. ,<>

This somewhat surprising development has been a concern to some in the field of corporate compliance, especially those who celebrated the approval of the revised FSGO in November 2004. As it turns out, the significance of the High Court ruling is likely to be greater for the individual sentencing guidelines than for the organizational guidelines. While the guidelines shift from mandatory to advisory because of the ruling, their importance to corporations, even as advisory, remains. This is because company compliance programs are aimed at avoiding being charged, let alone being sel1lenced, and the Department of Justice continues to use the FSGO as highly relevant to prosecutorial decisions.17 Win Swenson, former deputy general counsel at the Sentencing Commission, predicted that the court's ruling would not have a significant impact on corporate sentencing. "The Supreme Court's in fact decision doesn't make the federal guidelines irrelevant sentencing courts 'must consult' and 'take into account' the guideIines.,,38 "Most important," Swenson explained, the Justice Department made clear that it will advocate that sentencing judges follow the guidelines: "Since most corporate cases are resolved through plea bargains negotiated by the Department, the Department's continued endorsement of the corporate guidelines virtually guarantees their continued relevance. ,,19 -

236

-\ND THREE ACAI'J

U'l us now rum to the other devclopmemal engine for ethics \\'1111111 .he second academy, the preparation of leaders within the ,'rg,mlZ.!w,n ro take o\'er from the current generation, the "lcadershlJ1 pi!,e1m.:. Often this effort, which we first discussed in connCCIHIIl \\ Ilh -;,ustaining corporate conscience" in Chapter 7, is led by the sen],'r \"lCe-president for Human Resources. In addition to talenl m'ltl.igement - identifying and promoting key individuals in the plpcline rhe task here is what used to be called "grooming." And gr""ll1ing I;' frequently done through mentoring, coaching, and leader';}1t!, So.."ffimars and programs.'" These efforts need ((\ be distinguishe'd \]'<']]] ~j]:aining" in the conventional sense. They are more about dc\ d 'j'J!L, perspective, maturity of outlook, and charactcr than they :lre .lh,lur communicating rules and compliance nonns. Yale's Dean JeftTey Garten expresses concern about lcadlTshlj' dl."velopment at this level, including not only executives, but boards of directors:

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Today's system for educating business executives does not gn 1:11' enough to train CEOs to be leaders in society. The educational process needs to be broader and to take place over a longer pcrJlI,J It needs to be aimed not only at a company's management but als\l at those who serve on the boards of directors, It needs to encompass not just MBA curricula but executive education programs, too"

The corporate scandals of 2001-2003 in the US resulted in ncw requirements for education for senior leaders and board members.. as we saw above in relation to the FSGO.42It is, therefore, in a cClmpany's self-interest, quite apart from more intrinsic motivation, to initiate and maintain solid, participative, senior leadership programs.

Taking time What are the key elements that leadership development semm3rs in corporations need to include if they are to provide effective second academy engines for ethical values? There are numerous content possibilities and pedagogical approaches, but my experience with hundreds of executives has taught me that whatever the content and \'\i1atever the pedagogy, the key to effectiveness centers on lillie', 237

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