Business Ethics & CSR

Naeem ASHRAF

Spring, 2015

LUMS

1

Ethics and Business*

• Course overview

• The nature of business ethics

• Moral relativism

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* Unless specified otherwise, all definitions and examples are quoted from Velasquez, M.G.,2012. Business Ethics: Concepts & Cases., PHI New Delhi

Course overview

• Develop an in-depth understanding of the “three-pillars” of the discipline, viz. moral philosophy, ethical issues and dilemmas, and corporate social responsibility.

• Strengthen students’ ability to anticipate, critically analyze and appropriately respond to some of the critical ethical challenges which managers confront in the business world.

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Course overview

• After taking this course, students should be able to:

– Understand and apply moral reasoning through the lens of various ethical theories

– Appreciate the importance of ethical decision making and the difficulties inherent therein

– Navigate the terrain of external and internal stakeholders of business with regard to ethical issues

– Understand the concept of CSR and the debates around it

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Grades Breakup

• Class Participation: 10%

• Attendance & Punctuality: 5%

• Assignments: 10%

• Quizzes: 20 % (4: N-1)

• Mid-Term Examination: 30%

• Project / Term Paper: 25%

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COURSE OVERVIEWWeek/

Session/ Module

TopicsRecommended

ReadingsObjectives/Application

Week 1Introduction & Overview: Why Study Business Ethics?The Nature of Business EthicsMoral Reasoning

Chapter 1 (Velasquez, 2006)Introduction and discussion on the importance of the subjectUnderstand how moral reasoning works

Week 2- 5

Foundations of Ethics: Introduction to Moral PhilosophyConsequentialist and Non-Consequentalist Theories Virtue Ethics

Chapter 2 (Velasquez, 2006) Understand the four widely used bases for making ethical decisions in various business contexts

Week 6The Business System:Criticizing Markets and Free Trade Chapter 3 (Velasquez, 2006)

Appreciate the arguments for and against markets and free trade

Week 7

Ethical Issues in Business Settings: External Stakeholder Issues (Environment)Mid Term

Chapter 5 (Velasquez, 2006)Explore how certain business practices damage the environment, and the ethical responsibility of businesses

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Week 8 & 9

Ethical Issues in Business Settings: External Stakeholder Issues (Production and Marketing)

Chapter 6 (Velasquez, 2006)Discuss different theories of a firm’s duties to consumers, and the ethical dimensions of advertising and consumer privacy

Week 10

Ethical Issues in Business Settings: Internal Stakeholder Issues (Job Discrimination)

Chapter 7 (Velasquez, 2006)Analyze the nature and extent of job discrimination along with the ethical dilemmas inherent in affirmative action

Week 11 & 12

Ethical Issues in Business Settings: Internal Stakeholder Issues (Employee’s Rights and Obligations)

Chapter 8 (Velasquez, 2006)Understand the employee’s rights and responsibilities and a firm’s duties to the employee

Week 13

Ethics and Corporate Social

Responsibility:

Arguments for and against CSRPrinciples of Social Responsibility in BusinessSchools of Thought on Social Responsibility

Reading: Detienne, K.B., Lewis, L.W. “The Pragmatic and Ethical Barriers to Corporate Social Responsibility Disclosure: The Nike Case.” Journal of Business Ethics. 2005.

Discuss the varying views on CSR and evaluate the arguments for and against it using Nike as a case

Week 14

Final Project Presentations

Why should we study ethics!

• Ethics vs compliance

• The clash of two cultures

• Purposes of higher education

• Nature of challenge

Source: Wines, W.A. (2007). Seven pillars of business ethics: Towards a comprehensive framework, 79: 483-499

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The nature of business ethics

• Morality

– The standards that an individual or a group has about what is right and wrong or good and evil.

• Moral standards

– The norms about the kinds of actions believed to be morally right and wrong as well as the values placed on what we believe to be morally good and morally bad.

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Morality

• Nonmoral standards

– The standards by which we judge what is good or bad and right or wrong in a nonmoral way.

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Group One Group Two

“Do not harm other people,” “Do not eat with your mouth open,”

“Do not lie to other people,” “Do not chew gum in class,”

“Do not steal what belongs to others”

“Do not wear sox that do not match”

Morality

• Moral norms and nonmoral norms

– From the age of three we can distinguish moral from nonmoral norms.

– From the age of three we tend to think that moral norms are more serious than nonmoral norms and apply everywhere independent of what authorities say.

– The ability to distinguish moral from nonmoral norms is innate and universal.

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Morality

• Six characteristics of moral standards

– Involve serious wrongs or significant benefits.

– Should be preferred to other values including self-interest.

– Not established by authority figures.

– Felt to be universal.

– Based on impartial considerations.

– Associated with special emotions and vocabulary.

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Ethics• The discipline that examines one’s moral standards or

the moral standards of a society to evaluate their reasonableness and their implications for one’s life.

• Normative study: An investigation that attempts to reach conclusions about what things are good or bad or about what actions are right or wrong.

• Descriptive study: An investigation that attempts to describe or explain the world without reaching any conclusions about whether the world is as it should be.

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Business Ethics

• A specialized study of moral right and wrong that concentrates on moral standards as they apply to business institutions, organizations, and behavior.

• Study of:– Our moral standards insofar as these apply to

business.

– How reasonable or unreasonable these moral standards we have absorbed from society are.

– The implications our moral standards have for business activities.

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THANKS !