Chapter 3: Emerging Business Ethics Issues
Stakeholder concerns determine in large part, whether specific business actions or decisions
are perceived as right or wrong.
Recognizing an ethical issue (ethical awareness)
The complexity of the work environment makes it harder to define and reduce ethical
issues.
In a dilemma, all the alternatives have negative consequences, so the less harmful choice is
made.
Collusion is a secret agreement between two or more parties for a fraudulent, illegal, or
deceitful purpose. Deceitful purpose suggests trickery and misrepresentation.
Foundational values for identifying ethical issues
Þ Integrity
Refers to being whole, sound, and in an unimpaired condition. It relates to product quality,
open communication, transparency, and relationships.
Þ Honesty
To tell the truth to the best of your knowledge without hiding anything.
Confucius’ definition
An honest person is junzi or one who has the virtue ren.
Ren is one who has humanity.
Yi is what we should do according to our relationships with others.
Li is honesty, good manners, or respect.
Zhi is whether a person knows what to say or do as it relates to honesty.
Treat your inferiors as you would want your superiors to treat you.
Issues are often related to honesty because business involves competition, so business can
be considered a game people play. Ethics and morality don’t ordinarily matter in games, so
it would mean that they wouldn’t apply in business eighter. Business as war mentality can
help to keep the company competitive but it can also give the idea that honesty is
unnecessary in business.
Lying is (1) untruthful statements leading to damage or harm (2) white lies that lead to no
damage and work as excuses or a means of benefitting others (3) statements with no intent
to damage, just the purpose of entertainment
Þ Fairness
Is the quality of being just, equitable, and impartial. Three elements motivate people to be
fair: equality, reciprocity, and optimization. Equality is about the distribution of benefits
and resources. Reciprocity is an interchange of giving and receiving (in equal value) in social
relationships. Optimization is the trade-off between equity (equality) and efficiency
(maximum productivity).
, Ethical issues and dilemmas in business
Ethical issue: a problem, situation, or opportunity that requires an individual, group, or
organization to choose among several actions that must be evaluated as right or wrong,
ethical or unethical.
An ethical dilemma: a problem, situation, or opportunity that requires an individual, group,
or organization to choose among several actions that have negative outcomes.
Þ Misuse of company time and resources
Time theft such as arriving late, leaving early, taking long lunch breaks, etc. The greatest
way of misusing time is using the work computer for personal uses.
Þ Abusive or intimidating behavior
It is difficult to determine what is intimidating since the meaning differs from person to
person. One person’s yelling might be defined as normal speech by someone even if that
was not the intent. That is why the intent should be a consideration with abusive behavior.
Bullying is a big issue because it can cause psychological damage leading to health-
endangering consequences. To minimize bullying, employers can create policies, emphasize
mutual respect and encourage employees to report the conduct.
Þ Lying
Lying by commission: creating a perception or belief by words that intentionally deceive the
receiver of the message, for example in food advertising, saying it’s homemade when it’s
not.
Omission by lying: intentionally not informing others of any differences, problems, safety
warnings, or negative issues relating to the product or company that significantly affect
awareness, intention, or behavior, for example not showing on the cigarette packages that
they have negative effects.
The point at which a lie becomes unethical in business is based on the context of the
statement and its intent to distort the truth.
Þ Conflicts of interest
An individual must choose whether to advance his or her own interest, those of the
organization, or those of some other group. Employees must be able to separate their
private interests from their business dealings.
Þ Bribery
Offering something (often money) in order to gain an advantage from someone in
authority.
Active bribery: the person who promises or gives the bribe commits the offense
Passive bribery: an offense committed by the official who receives the bribe
Facilitation payments: made to include public officials to perform their functions, such as
issuing licenses or permits
Stakeholder concerns determine in large part, whether specific business actions or decisions
are perceived as right or wrong.
Recognizing an ethical issue (ethical awareness)
The complexity of the work environment makes it harder to define and reduce ethical
issues.
In a dilemma, all the alternatives have negative consequences, so the less harmful choice is
made.
Collusion is a secret agreement between two or more parties for a fraudulent, illegal, or
deceitful purpose. Deceitful purpose suggests trickery and misrepresentation.
Foundational values for identifying ethical issues
Þ Integrity
Refers to being whole, sound, and in an unimpaired condition. It relates to product quality,
open communication, transparency, and relationships.
Þ Honesty
To tell the truth to the best of your knowledge without hiding anything.
Confucius’ definition
An honest person is junzi or one who has the virtue ren.
Ren is one who has humanity.
Yi is what we should do according to our relationships with others.
Li is honesty, good manners, or respect.
Zhi is whether a person knows what to say or do as it relates to honesty.
Treat your inferiors as you would want your superiors to treat you.
Issues are often related to honesty because business involves competition, so business can
be considered a game people play. Ethics and morality don’t ordinarily matter in games, so
it would mean that they wouldn’t apply in business eighter. Business as war mentality can
help to keep the company competitive but it can also give the idea that honesty is
unnecessary in business.
Lying is (1) untruthful statements leading to damage or harm (2) white lies that lead to no
damage and work as excuses or a means of benefitting others (3) statements with no intent
to damage, just the purpose of entertainment
Þ Fairness
Is the quality of being just, equitable, and impartial. Three elements motivate people to be
fair: equality, reciprocity, and optimization. Equality is about the distribution of benefits
and resources. Reciprocity is an interchange of giving and receiving (in equal value) in social
relationships. Optimization is the trade-off between equity (equality) and efficiency
(maximum productivity).
, Ethical issues and dilemmas in business
Ethical issue: a problem, situation, or opportunity that requires an individual, group, or
organization to choose among several actions that must be evaluated as right or wrong,
ethical or unethical.
An ethical dilemma: a problem, situation, or opportunity that requires an individual, group,
or organization to choose among several actions that have negative outcomes.
Þ Misuse of company time and resources
Time theft such as arriving late, leaving early, taking long lunch breaks, etc. The greatest
way of misusing time is using the work computer for personal uses.
Þ Abusive or intimidating behavior
It is difficult to determine what is intimidating since the meaning differs from person to
person. One person’s yelling might be defined as normal speech by someone even if that
was not the intent. That is why the intent should be a consideration with abusive behavior.
Bullying is a big issue because it can cause psychological damage leading to health-
endangering consequences. To minimize bullying, employers can create policies, emphasize
mutual respect and encourage employees to report the conduct.
Þ Lying
Lying by commission: creating a perception or belief by words that intentionally deceive the
receiver of the message, for example in food advertising, saying it’s homemade when it’s
not.
Omission by lying: intentionally not informing others of any differences, problems, safety
warnings, or negative issues relating to the product or company that significantly affect
awareness, intention, or behavior, for example not showing on the cigarette packages that
they have negative effects.
The point at which a lie becomes unethical in business is based on the context of the
statement and its intent to distort the truth.
Þ Conflicts of interest
An individual must choose whether to advance his or her own interest, those of the
organization, or those of some other group. Employees must be able to separate their
private interests from their business dealings.
Þ Bribery
Offering something (often money) in order to gain an advantage from someone in
authority.
Active bribery: the person who promises or gives the bribe commits the offense
Passive bribery: an offense committed by the official who receives the bribe
Facilitation payments: made to include public officials to perform their functions, such as
issuing licenses or permits
