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Business Ethics
Weeks 1-2: Introduction to syllabus and Ethics in the world of business
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My expectations for the class
• Come on time
• Participate, share your opinion
• Feel free to be creative in the assignments
• I want the class to be as interactive and fun as possible
• I welcome immediate feedbacks from students
• We are learning together
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Syllabus: Course information
•Monday: 1:00 PM-2:20 PM. New Classroom Building, 28
•Thursday: 11:30 AM-12:50 PM. Old Classroom Building, 03
•Office hours: By appointment
•Office location: Part-time Faculty room, Grand Bassam
•Reading: John R. Boatright Boone, Ethics and the Conduct of Business (7th Edition)
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Assessment and Grading Rubric IUGB Grading Scale
Yes
3.70 90-92
B+ 3.30 87-89
D
Yes
1.70
1.00
70-72
59.5-69
NO
W NO 0.00 Withdrawal
NO
WF 0.00 Failing withdrawal
Please name your files for potential submission of any assignment as follows:
FirstName-LastName-Assignmenttitle-BUSS3320-fall2019.doc
Example: Nandy-Beugré-project-BUSS3320-fall2019.doc
Same if it is a group project submission.
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Next
Write 150 worlds to briefly explain Business Ethics according to you and how it could
benefit your future professional life.
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Thank you and see you on Thursday
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Definition of Ethics
“Moral principles that govern a person's behavior or
the conducting of an activity.”
The Oxford Living Dictionary.
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Week 1 objectives
• Introduction to syllabus
•Ethics in organization
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Learning objectives
•Identify ethical issues that arise in everyday business and social situations
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Chapter 1: Ethics in the world of business
•Business decision making
•Ethics in organization
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Business decision making
All business organizations face the challenge of adhering to the highest level of ethics while remaining productive and
satisfying their customers. Many of the decisions made by the managers and employees of these companies involve
complex ethical issues.
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Business decision making
•The two distinguishing features of business
•The economic character of business: people interact as buyers and
sellers, employers and employees, and the like.
•Employees have the right not to be discriminated against or
exposed to workplace hazard, right to privacy, freedom of speech,
etc.
•Business typically takes place in organizations : and so does ethical
business as well in the process of making decisions in accordance
with the company’s goal strategy.
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Levels of decision making
•Level of individual: situations in which you have to make a decision about your own response
•What do I do?
•Level of the organization: situations in which you act on the behalf of the organization in
bringing about some organizational change
•What do we as an organization do?
•Level of the business system: situations in which multiples organizations have to make a
change happen in the industry
•What do we as a society do?
•Ethical displacement
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The relationship of ethics and economics
•Economics tells us how we do reason in making economic choices but not
how we ought to reason
•From an economic point of view, the sole reason for any choice is to
maximize utility
•Customer satisfaction, firms satisfaction (revenues equal or greater
than costs)
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The relationship of ethics and economics
•Justification of the market system
•According to Adam Smith, by pursuing profit, business firms promote the welfare of the whole
society
•This assumes a society with high level of honesty, trust and other moral values, not a chaotic
society with corruption and mistrust.
• Business activity can benefit society under certain conditions:
•The observance of minimal moral restraints to prevent theft, fraud, and the like
•Fully competitive market with easy entry and exit
•Accessibility of relevant information to everyone
•All costs of production should be reflected in the prices that firms and consumer pay,
including externalities
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The relationship of ethics and economics
•Some conditions for free markets
•Government enforces laws to ensure the conditions for free markets but cannot do the job
alone
•There are gray areas that require self-regulation and restraint by businesses themselves
•Ethics have an influence on people’s economic behavior
•People make economic choices based on whether they believe others are acting
ethically or not
•Regarding public policy, legislators need to also consider noneconomic values (like fairness) to
make some decisions.
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The relationship of ethics and the law
•Two school of thought
•Law prevails in public life whereas ethics prevails in private matter
•Ethical rules shouldn’t be applied in business
•The law represents a minimal level of expected conduct that everyone
should observe
•Ethics is an optional level
•The law embodies the ethics of business so if it’s legal it’s morally okay
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The relationship of ethics and the law
•Why the law is not enough
•The law is inappropriate for regulating certain aspects of business activity, not
everything that is immoral is illegal
•The law is often slow to develop in new areas of concern, it is reactive rather than
preventive
•The law often employs moral concepts that are not precisely defined (« in good
faith » « best effort »)
•The law is often unsettled and the courts sometimes need to consider moral
considerations to make a decision
•The law is a rather inefficient instrument and an exclusive reliance on it alone
invites legislation and litigation where they are not necessary
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Ethics and management
•Ethical management: acting ethically as a manager by doing the right thing
•Management of ethics: acting effectively in situation that have an ethical aspect
•Organization need to ensure the ethical conduct of the members through a set of
rules, procedures, policies, and values carefully managed and communicated
•To practice ethical management and Management of ethics, managers need:
•Specialized knowledge: laws, precedents, theoretical perspectives
•Skills acquired through experience and training: being able to see the ethical
dimensions of a situation, persuading skills, being able to give proper weight to
competing ethical factors or to see other people perspectives
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Ethics and management
•Ethics and the role of managers
•A role is a structured set of relationships with accompanying rights
and obligations.
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Ethics in organizations
•The challenges of managing ethics in organizations
•Much decision making in business is a collaborative endeavor in which
each individual play only a small role
•The collaborative decision-making process is subject to dynamic forces
and can lead to consequences no one intended or expected simply
because of a misunderstanding
•Many organizational acts are the results of collective actions that result
from a multiplicity of actions
•Organizations create an environment that may lead otherwise ethical
people to engage in unethical conduct
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Ethics in organizations
•Individual decision making
•Bad apples: people who knows something is wrong but deliberately do it
•Why do people act unethically even when sometimes they could be considered as good
employees or managers?
•Lack of strong guidance, reception of conflicting signals
•Strong pressure to follow orders and get the job done
•Pressure to be a team player
•Individuals are prone to rationalization and can persuade themselves that what they
do is morally right or at least is not wrong under the circumstances
•There are some biases, and heuristics that affect our judgment
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Ethics in organizations
•Individual decision making
•Example of rationalizations
•A belief that the activity is not « really » illegal or immoral
•A belief that the activity is in the individual’s or the corporation’s best
interest
•A belief that the activity is safe because it will never be found out or
publicized
•A belief that because the activity helps the company, the company will
condone it and even protect the person who engages it
•A belief that everybody’s doing it
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Let’s take the example of an intern
Imagine that you are a new intern at NESTLE CI.
It is your first day and you are so motivated to
impress everyone.
You come in the building, the assistant indicates you
your supervisor’office and as soon as you get in, you
notice that she is looking at the window. She
suddenly turns to you with her most beautiful smile
on her face holding a beer as if it was normal. She
kindly hands you a little bottle of beer saying "ah,
here's our new comer ! I'm sure you'll rock it ! Let me
welcome you the warmest way.”
What would you do?
How would you feel about her? About the
company? About your internship?
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Ethics in organizations
•Individual decision making
•Rationalizations
•Neutralization is a process of rationalization that enables lawbreaker to deny
the criminality of their behavior
•Claims that one is not really responsible « I was out of my mind »
•Claims that there was no real harm
•Claims that the victim deserved the harm
•Claims that one’s accusers are being under
•Claims that one was following some higher duty of loyalty
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Ethics in organizations
•Individual decision making
•Example of biases: the tendency to make decisions or take action in an illogical way
•Loss aversion bias
•Framing effect
•Confirmation biases
•Cognitive dissonance
•Commitment and sunk costs
•Hindsight bias
•Causation bias and illusion of control
•Overoptimism and overconfidence bias
•Risk perception bias
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Ethics in organizations
•Individual decision making
•Heuristics: mental shortcuts using simple, efficient rules to
form judgments and make decisions in complex situations.
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Ethics in organizations
•Organizational decision making
•Four features that contribute to big and small mistakes in organizations
•Major decisions are not made all at once with all consequences and ramifications
understood, but over time in a series of small steps that do not raise any particular concern
•As they are made over time, these multiple decisions develop a commitment to a course of
action that is usually difficult to stop
•The diffusion of information: information is distributed on a need-to-know basis
•The fragmentation of responsibility: everyone has a specific responsibility and doesn't care
about other aspects of the product or services
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Next
•Case 2.2: Lavish pay at Harvard
•Chapter 2: Ethical decision making
•Market Ethics
•Roles, relationships and firms
•Ethical reasoning
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Thank you and see you on Thursday
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