BUSINESS ETHICS & RELATED APPROACHES

Bilge ÖztürkMehmet HartlapMurat AkkayaMehtap Ulusal

Topics to be Covered

Basic Definitions & Ethical Approaches Business Ethics and its Evolution Ethics in Business Managing Business Ethics

Basic Definitions and Ethical Approaches

Bilge ÖZTÜRK

Basic Definitions

Norms Values Morality Ethics

Norms

Action directives that tell us what we should or should not do in certain situations.

Values

Intrinsically worthy experiences, states of affairs and qualities of people or organizations.

Morality

The special set of values that mark off the more or less absolute limitations on behavior

Ethics

Ethics – A set of moral principles or values that governs the conduct of an individual or a group.

Ethics Continued

Micro ethics: our personal and professional concerns for living well and doing what is right

Macro ethics: larger concerns about the kind of society we live in, the kind of economic system that serves the society

Ethical Theories

Ethical RelativismEthical Relativism

Ethical Ethical FundamentalismFundamentalism

UtilitarianismUtilitarianism

Kantian EthicsKantian EthicsRawls’s Social Rawls’s Social Justice TheoryJustice Theory

Ethical Fundamentalism

Ethical fundamentalism - When a person looks to an outside source for ethical rules or commands.

Utilitarianism

A moral theory that dictates that people must choose the action or follow the rule that provides the greatest good to society.

This does not mean the greatest good for the greatest number of people.

Kantian Ethics (Duty Ethics)

A moral theory that says people owe moral duties that are based on universal rules.

This theory would have people behave according to the categorical imperative:

“Do unto others as you would have them do unto you.”

Kantian Ethics (Duty Ethics) (continued)

Deontology’s universal rules are based on two important principles:

1. Consistency 2. Reversibility

Rawls’s Social Justice Theory

Rawls’s social contractA moral theory that says each person is presumed to have entered into a social contract, with all others in society, to obey moral rules that are necessary for people to live in peace and harmony.

Rawls’s Social Justice Theory (continued)

Rawls’s Distributive Justice Theory “veil of ignorance” would permit the

fairest possible principles to be selected.

Ethical Relativism

A moral theory that holds that individuals must decide what is ethical based on their own feelings as to what is right or wrong.

If a person meets his or her own moral standard in making a decision, no one can criticize him or her for it.

Business Ethics and Its Evolution

Mehmet Hartlap

“The most powerful argument for ethics in business is success.”

Robert C. Solomon

What is Business Ethics?

Consist of principles and standards that guide behavior in the world of business.

Evolution of Business Ethics

Before 1960: Presented from a religious viewpoint…concerns about fair wages; labor practices; capitalism

The 1960s: organization became ethical unit; numerous consumer protection laws

The 1970’s

Began to develop as a field of study Business Professors began to teach

& write about corporate social responsibility

Philosophers applied ethical theories to business

Centers dealing with issues of business ethics established

The 1980s - Consolidation

Acknowledged as a field of study Growth of college courses Growth of services provided by

Centers of Business Ethics

The 1990s - Institutionalization

support of free trade, but greater restrictions on tobacco companies’ advertising

Guidelines for Organizations, setting tone for ethical compliance programs

2000 & Beyond

Trend to move away from legally based ethical efforts to….

Culturally-based ethical initiatives Seeing development of global

standards of ethics

Business Ethics: Today vs. Earlier Period

Ex p

e cte

d a n

d A

c tu a

l Lev

e ls

of B

usin

ess

Eth

ics

Ethical Problem

Ethical Problem

Society’s Expectations of Business Ethics

Actual Business Ethics

1950s 2000sTime

Ethics in Business

Murat Akkaya

Why study business ethics?

Why? Why? Why?

According to the study carried by Price Waterhouse Coopers, Turkey is the 4th country in CORRUPTION among 35 countries.

According to international transparency, Turkey is numbered as 62nd among 102 countries in 2002, 52nd in 2001 and 27th in 1995.

We think, these are the enough results that shows the need to ethical studies of Turkey.

Common Causes of Unethical Behavior

Following boss’s directives Meeting overly aggressive

business/financial objectives Helping the organization survive Meeting schedule pressures Be a team player (group think) Rationalizing that others do it Resisting competitive threats Advancing own career

1-Following boss’s directives

To be a journalist in Doğan Holding!

Some Examples From Milliyet

Aydın Doğan yine rekortmen!(http://www.milliyet.com/2004/04/07/ekonomi/aeko.html)

Erzincan’a Aydın Doğan Kız Öğrenci Yurdu!

(http://www.milliyet.com/2006/03/19/guncel/gun05.html)

500 ağaçlık Aydın Doğan Ormanı!(http://www.milliyet.com/2002/04/12/yasam/yas09.html)

Sweet Heart Aydın Doğan in every topic!!!

To be a journalist in Doğan Holding!!!

You may see lots of topics in Milliyet or Hürriyet that priase Aydın Doğan.

But surprisingly! You can not find such topics in other newspaper groups (Ciner, Uzan).

Because the boss of the newspapers is Aydın Doğan and

The boss’s directives is clear: Show me as the sweet angel of Turkey But we know from our research that ethical

studies say journalism had to be independent. So, it is difficult to be an ethical journalist in

Milliyet or Hürriyet. And What about us???

2-Meeting overly aggressive business/financial objectives

To Be a banker in

To Be a banker in

Citibank in Germany Citibank in Japan Citibank in European Area

(Hürrüyet, 16.12.2004)

3-Advancing own career

To be a manager in

(Vatan, Emine Algan)

To be a manager in

You can buy a cancer drug of Roche privately for 88 YTL in Turkey.

But, it was sold to SSK for 230 YTL, because Roche assume that the government was so rich.

Veysi Mungan, an engineer in Roche, complained to court about this interesting situation.

But, all the top managers want to stop him.

Common Unethical Acts

Lying to supervisors Falsifying records Conflict of Interest Stealing Gift/entertainment receipt in

violation of company policy

Common Misconduct in Organizations

Misrepresenting hours worked Management lying to employees,

customers, vendors or the public Misuse of organizational assets Lying on reports/falsifying records Sexual harassment Stealing/theft Accepting or giving bribes or kickbacks Withholding needed information from

employees, customers, vendors or public

1-Misrepresenting hours worked

Textile industry in Turkey and China

No boundary of overworking (12 hour a day, 7 days in a week)

No social gains (SSK in Turkey) No legal salary (Asgari Ücret in Turkey) Children meet to Factories in Turkey and also in china So, Who cares the rules?

2-Management lying to employees, customers, vendors or the public

‘s message to customers and public:

I do not hire children in my company. But I work with the Chinese companies that

hires children.

3-Sexual harassment

A question to business woman in Turkey

Do you face to sexual harassment in your business life?

Yes %40/No %48.84/I’m not certain %11

(İnsankaynakları.com)

What are the effects of sexual harassment?

4-Withholding needed information from employees, customers, vendors or public

Enron Tyco World-com …

EXAMPLES OF UNETHICAL BEHAVOIR

Causing the removal/disappearance of information

Professionals practicing beyond area of expertise

Unnecessary stimulation of conflict Failure to follow proper procedure Disregarding individual privacy Misleading advertising Conflict of interest

1-Misleading advertising

Norwegian Fishers-Cosmetics Firms Pantene Pro-V, P&G in England Gençleştiriyor, yeniliyor, sıkılaştırıyor,

besliyor.

(Hürriyet, 13.05.2005)

The Summary Of this Section

Hiçbir zaman idealist olmadım, ne yani aç mı

kalsaydım?

Mehmet Ali Erbil

(Taken from the magazine, Haftalık)

Managing Business Ethics

Mehtap UlusalMehtap Ulusal

Ethical Dilemmas

Making decisions under stress or dealing with complex issues that have no clear indication of what is right or wrong.

There are NO simple ethical dilemmas…all have layers of meaning and effect.

Ethical Dilemmas

Honesty & integrity

Conflict of interest

Loyalty vs.. truth

Whistle-blowing

A Real Life Example…

WHAT WOULD YOU DO IF YOU WERE THE SALES MANAGER???

The Ethics Check

Is it Legal? Is it Fair? How do I feel about it?

Helping Employees Do the Right Thing

Prepare an Ethics Statement (codes of ethics)

a written outline of the ethical principles of a business

Codes of Ethics

Areas often covered by codes of ethics: Workforce diversity Bribes and kickbacks Political contributions Honesty of books or records Customer/supplier relationships Confidentiality of corporate information

A Good ExampleJohnson & Johnson

We believe our first responsibility is to the doctors, nurses and patients, to the

mothers and fathers and all others who use our products and services. In meeting their needs, everything must be of high

quality. We constantly strive to reduce our costs in order to maintain reasonable

prices. Customers’ orders must be serviced promptly and accurately. Our

suppliers and distributors must have an opportunity to make a fair profit.

A Good ExampleJohnson & Johnson

Clearly established Code of Ethics Constancy in adherence to Code Positive Community perception

Higher Management support Maintenance of Focus

Staff Involvement

Helping Employees Do the Right Thing (continued)

Talking about ethics Clarify employees responsibilities to

stakeholders Don’t punish employees for expressing

moral views Encourage people to resolve problems

through collaboration Eliminate all abuses of ethical standards Encourage discussion of ethical

standards

Helping Employees Do the Right Thing (continued)

Don’t reward unethical behavior Create departments of ethics and

law Provide legal and Ethics Training Provide ethical leadership Maintain constancy of purpose

Good Managers Make the Difference

Managers must accept personal responsibility for doing the “right” things.

Managers play a crucial role in responding to public demands.

Ethics and social responsibility play a central role in managers’ decisions and activities.

Benefits of Managing Ethics in the Workplace

Improves society. Maintains a moral course in turbulent

times. Cultivates employee teamwork,

productivity, morale and development. Establishes values for quality

management, strategic planning and diversity management.

Promotes strong public image. It is the RIGHT thing to do!

CLOSURE OF TOPIC

Business ethics, practiced throughout the deepest layers of a company, become the heart and soul of the company's culture and can mean the difference between success and failure…

Be Trustful, keep an Open Mind, Meet Obligations, Have Clear

Documents, Become Community Involved, Maintain

Accounting Control, Be Respectful...

Robert Moment

THANK YOU!!!