conducting business ethically and responsibly prof. bauer-ramazani actuary analysis actuary...
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Conducting Business Conducting Business Ethically and ResponsiblyEthically and Responsibly
Prof. Bauer-RamazaniProf. Bauer-Ramazani
Actuary Analysis, from the movie Class Action
(1:40 min.)
Jan. 29, 2008, CNN.com
Ethical Dilemma -- definitionEthical Dilemma -- definition
A predicament in which a (business) person A predicament in which a (business) person must resolve whether an action may be must resolve whether an action may be considered considered unethical even if itunethical even if it benefitsbenefits the organization, the individual, or the organization, the individual, or bothboth..
An ethical dilemma may arise when An ethical dilemma may arise when two two norms or values are in conflict norms or values are in conflict
Identify the 2 norms or values.Identify the 2 norms or values. Tradeoffs (pros & cons)Tradeoffs (pros & cons)
What Is Ethical Behavior?What Is Ethical Behavior?EthicsEthics
Right or wrong, good or bad, Right or wrong, good or bad, in actions that affect othersin actions that affect others
Ethical BehaviorEthical BehaviorConforming to Conforming to individual individual
beliefsbeliefs AND AND social normssocial norms about what’s right and goodabout what’s right and good
Business ethicsBusiness ethics Ethical or unethical behavior Ethical or unethical behavior
by employees of by employees of organizationsorganizations
Formalizing the Commitment to Formalizing the Commitment to EthicsEthics
Adopting Written CodesAdopting Written CodesAdopting Written CodesAdopting Written Codes
Instituting Ethics ProgramsInstituting Ethics ProgramsInstituting Ethics ProgramsInstituting Ethics Programs
Code of EthicsCode of Ethics formal statement = a formal statement = a guide forguide for how people within how people within
a particular organization should act and make a particular organization should act and make decisions in an ethical fashiondecisions in an ethical fashion. .
‘ ‘s Code of Business Conduct s Code of Business Conduct
(in 15 languages):(in 15 languages):– Our Code of Business Conduct serves to guide the Our Code of Business Conduct serves to guide the
actions of our employees, officers and directors in ways actions of our employees, officers and directors in ways that are consistent with our core values: honesty; that are consistent with our core values: honesty; integrity; diversity; quality; respect; responsibility; and, integrity; diversity; quality; respect; responsibility; and, accountability. The Code helps our people play by the accountability. The Code helps our people play by the rules wherever we operate around the world. rules wherever we operate around the world. ((http://www.thecoca-colacompany.com/ourcompany/business_conduct.hthttp://www.thecoca-colacompany.com/ourcompany/business_conduct.htmlml) )
Ethical Decision Model by the Ethical Decision Model by the Josephson Institute of EthicsJosephson Institute of Ethics
1.1. All decisions must take into account and All decisions must take into account and reflect a reflect a concern for the interests and concern for the interests and well-being of ALL stakeholderswell-being of ALL stakeholders..
2.2. Core ethical values and principles Core ethical values and principles ALWAYSALWAYS take precedence over non- take precedence over non-ethical ones, e.g. self-interest.ethical ones, e.g. self-interest.
Major Major Corporate Corporate
StakeholdersStakeholders
Groups, individuals, and organizations that are directly affected by
the practices of an organization
Businesses have a social responsibility
toward them.
Responsibility Toward CustomersResponsibility Toward Customers
Consumer RightsConsumer RightsConsumer RightsConsumer Rights
Fair PricingFair PricingFair PricingFair Pricing
Ethics in AdvertisingEthics in AdvertisingEthics in AdvertisingEthics in Advertising
Responsibility Toward Responsibility Toward EmployeesEmployees
Legal and Social Commitments Safe work environmentSafe work environment Equal payEqual pay
Ethical Commitments Whistle-blowersWhistle-blowers
Responsibility Toward InvestorsResponsibility Toward Investors
1.1. NO improper financial NO improper financial managementmanagement
2.2. NO insider tradingNO insider trading
3.3. NO misrepresentation NO misrepresentation of finances on financial of finances on financial statements statements
Responsibility Toward Local Responsibility Toward Local CommunitiesCommunities
EnvironmentEnvironmentAir pollutionAir pollutionWater pollutionWater pollutionLand pollutionLand pollution
Clean up toxic wasteClean up toxic wasteUse recycling
Growth / infrastructureGrowth / infrastructure Social well-being of all members of Social well-being of all members of
the community the community
Company Practices and Business Company Practices and Business EthicsEthics
Best Approach: Open, Honest, Responsive!
The Tylenol Scare Case
Lawsuits as a result of pharmaceutical company Merck’s announcement about the potential side effects of its drug Vioxx and subsequent withdrawal
7 possible Guidelines for Making Ethical 7 possible Guidelines for Making Ethical Decisions in the Work Place Decisions in the Work Place
(Please refer to your handout.)
1.1. The Golden RuleThe Golden Rule
2.2. The Utilitarian PrincipleThe Utilitarian Principle
3.3. Kant’s Categorical ImperativeKant’s Categorical Imperative
4.4. The Professional EthicThe Professional Ethic
5.5. The TV TestThe TV Test
6.6. The Legal TestThe Legal Test
7.7. The Four-Way TestThe Four-Way Test
Business Ethics: My Life in Headlines (1 min.)
Social AuditsSocial Audits
Many companies attempt to regulate Many companies attempt to regulate themselves on the topic of social themselves on the topic of social responsibility and ethics. They do this responsibility and ethics. They do this through through social audits.social audits.
A A social auditsocial audit is a form of self-regulation is a form of self-regulation in which the company attempts to in which the company attempts to monitor monitor managers’ and employees’ ethical behavior.managers’ and employees’ ethical behavior.
Managing Social Responsibility Managing Social Responsibility & Ethics Programs& Ethics Programs
Key steps:Key steps: Social responsibility and ethics must start at the top.Social responsibility and ethics must start at the top.
A committee of top managers must develop a plan A committee of top managers must develop a plan
detailing the level of top management support. detailing the level of top management support.
One executive must be put in charge of the firm’s agenda.One executive must be put in charge of the firm’s agenda.
The organization must conduct periodic The organization must conduct periodic social auditssocial audits
Evaluate progress in achieving social responsibility goals Evaluate progress in achieving social responsibility goals