B368 Business Issues and Ethics

Group 3 & 8 Tutorial 1 C.S. Lai Oct. 2009

B368 Business Issues and Ethics C.S. Lai 2009

Your choice of language:

English or Cantonese

B368 Business Issues and Ethics

C.S. Lai 2009

Welcome! todays agenda

Introduction Ground rules, Q&A Importance of Business Ethics Break TMAs Q&A, Your Suggestions
B368 Business Issues and Ethics

15 mins. 15 mins. 110 mins. 10 mins. 15 mins. 15 mins.

C.S. Lai 2009

About me
B.Sc. (Hons.) in Chemistry (CUHK) M.Sc. in Engineering Business Management (Warwick) Supply Chain & Procurement Manager of a multinational pharmaceutical company Please dont call me Lai Sir, call me CS or Mr. Lai To contact me:
Tel: 9807 5176 (Sun/Sat 20:00 22:00)
Please allow your callers ID to be displaced Please leave a message in case the line is busy. Please DONT call during office hours (Mon. Fri.). Please DONT call after 22:00, I should have slept already!

Email: t441653@ouhk.edu.hk

B368 Business Issues and Ethics

C.S. Lai 2009

About your Course Coordinator

Dr. Matthew Yeung Tel: 2768 6951 Office: A826 Email: myeung@ouhk.edu.hk

B368 Business Issues and Ethics

C.S. Lai 2009

My role as tutor
Help everyone of you to complete this course Telephone tutoring, face-to-face sessions, TMAs, OUHK expects me to be a manager (of students time), a well informed and sensitive counsellor and an effective administrator and NOT to transmit knowledge to your students Lecturing for more than one third of the tutorial time should be considered too much
B368 Business Issues and Ethics C.S. Lai 2009

About the Course Aims

Introduce the theories and practices of business ethics. The primary function is not to change students' personal values; rather, it is to raise students' awareness of business ethical issues and to develop an ethical mindset so that they consider ethics when analysing business cases and making business decisions
B368 Business Issues and Ethics C.S. Lai 2009

Contents
The course covers the following topics: 1. The importance of business ethics 2. Making ethical business decisions 3. Tools and techniques to manage business ethics 4. Corporate issues and business ethics 5. Stakeholder issues and business ethics 6. The stakeholder society
B368 Business Issues and Ethics C.S. Lai 2009

Assessments
4 tutorials 1 workshop 2 TMAs 1 Examination

B368 Business Issues and Ethics

C.S. Lai 2009

Please.
Speak out Ask questions Share your thoughts Make mistakesand Enjoy!

B368 Business Issues and Ethics

C.S. Lai 2009

One last thing

Please ensure your phone doesnt ring during the tutorial If you need to use your phone, please use the area outside the classroom Thanks!

B368 Business Issues and Ethics

C.S. Lai 2009

Introducing Business Ethics

B368 Business Issues and Ethics

C.S. Lai 2009

Activity
What is Business Ethics? Please find some examples that is within the scope of Business Ethics. Why do you study this course? How can this course help you in your career?

B368 Business Issues and Ethics

C.S. Lai 2009

Overview
What is business ethics? Why is business ethics important? Globalization: a key context for business ethics? Sustainability: a key goal for business ethics? Europe: a key perspective on business ethics?

B368 Business Issues and Ethics

C.S. Lai 2009

What is business ethics?

Business ethics is the study of business situations, activities, and decisions where issues of right and wrong are addressed.

B368 Business Issues and Ethics

C.S. Lai 2009

What is business ethics

Examples
The case of copy data files (individual employee) The case of lax site supervision (management) The case of pharmaceutical pricing (strategy)

Can you think of some more examples? What are the ethical issues involved?
B368 Business Issues and Ethics C.S. Lai 2009

Case Study (Ethical Dilemma 1)

Your friend is working in a bar; He undercharges you whenever you drink there.
Please discuss the questions in the textbook.

B368 Business Issues and Ethics

C.S. Lai 2009

Ethics and the law

Ethics
grey area

Law
B368 Business Issues and Ethics C.S. Lai 2009

Ethics in Action 1.1

Are certain products inherently unethical? Why? What are the reasons for the company being an ethical or unethical organization? If youre the marketing manager of the controversial product, how would you suggest the product be marketed to highlight their ethical qualities?
B368 Business Issues and Ethics C.S. Lai 2009

Defining morality, ethics and ethical theory

Morality is concerned with the norms, values and beliefs embedded in social processes which define right and wrong for an individual or a community. Ethics is concerned with the study of morality and the application of reason to elucidate specific rules and principles that determine right and wrong for any given situation. These rules and principles are called ethical theories.

B368 Business Issues and Ethics

C.S. Lai 2009

The relationship between morality, ethics and ethical theory

Ethics rationalizes morality

to produce ethical theory

that can be applied to any situation.

Morality

Ethics

Ethical theory

Potential solutions to ethical problems

B368 Business Issues and Ethics

C.S. Lai 2009

Why is business ethics important?

1. 2. 3. 4. 5. 6. 7.
8.

Power and influence of business in society Potential to provide major contribution to society Potential to inflict harm Increasing demands from stakeholders Lack of business ethics education or training Continued occurrence of ethical infractions Evaluating different ways of managing business ethics Interesting and rewarding
B368 Business Issues and Ethics C.S. Lai 2009

Types of misconduct employees observed among co-workers

Type of Misconduct of Co-Workers abusive or intimidating behaviour towards employees lying to employees, customers, vendors, or the public a situation that places employee interests over organizational interests violations of safety regulations misreporting of actual time worked discrimination on the basis of race, colour, gender, age or similar categories stealing or theft sexual harassment Percentage of employees observing misconduct 21% 19% 18% 16% 16% 12% 11% 9%
Source: Ethics Resource Center (2005)

B368 Business Issues and Ethics

C.S. Lai 2009

Globalization: a key context for business ethics?

B368 Business Issues and Ethics

C.S. Lai 2009

What is globalization?
According to Scholte (2000) globalization is not:
internationalization liberalization universalization westernization

Globalization is: the progressive eroding of the relevance of territorial bases for social, economic and political activities, processes and relations
deterritorialization
B368 Business Issues and Ethics C.S. Lai 2009

Relevance of globalization for business ethics

Cultural issues Legal issues Accountability issues

Globalization can affect all stakeholders of the corporation

B368 Business Issues and Ethics C.S. Lai 2009

Ethical impacts of globalization

Stakeholders
Shareholders Employees

Ethical impacts of globalization

Globalization provides potential for greater profitability, but also greater risks. Lack of regulation of global capital markets, leading to additional financial risks and instability. Corporations outsource production to developing countries in order to reduce costs in global marketplace this provides jobs but also raises the potential for exploitation of employees through poor working conditions. Global products provide social benefits to consumers across the globe but may also meet protests about cultural imperialism and westernization. Globalization can bring cheaper prices to customers, but vulnerable consumers in developing countries may also face the possibility of exploitation by MNCs. Suppliers in developing countries face regulation from MNCs through supply chain management. Small scale indigenous competitors exposed to powerful global players. Global business activities brings the company in direct interaction to local communities with possibility for erosion of traditional community life; globally active pressure groups emerge with aim to police the corporation in countries where governments are weak and tolerant. Globalization weakens governments and increases the corporate responsibility for jobs, welfare, maintenance of ethical standards, etc. Globalization also confronts governments with corporations from different cultural expectations about issues such as bribery, corruption, taxation, and philanthropy.

Consumers

Suppliers and Competitors Civil society (pressure groups, NGOs, local communities) Government and regulation

B368 Business Issues and Ethics

C.S. Lai 2009

Sustainability: a key goal for business ethics?

B368 Business Issues and Ethics

C.S. Lai 2009

Case Study
Ethics in Action 1.2 Fishing cod fish on a not sustainable source.

B368 Business Issues and Ethics

C.S. Lai 2009

Corporate commitments to sustainability

Company BP Sustainability Statement For BP, sustainability means the capacity to endure as a group: by renewing assets; creating and delivering better products and services that meet the evolving needs of society; attracting successive generations of employees; contributing to a sustainable environment; and retaining the trust and support of our customers, shareholders and the communities in which we operate. The ICI Board is committed to the principles of sustainable development Why? Because we believe it is right, and because our stakeholders expect it. They value our products and admire our creative talent; but they also fear that our activities might have harmful effects. Nokia's vision of technology as an enabler of environmental sustainability is based on a strategy of eco-efficiency and life cycle thinking. Contributing to sustainable development is part of our business principles. The challenges facing society today can only be met by search and decision-making processes that continuously re-balance the requirements of economic performance, environmental protection and social justice For Volkswagen, sustainability is the basis for policy as well as part of a living, breathing corporate culture. Issues and Ethics B368 Business Source Sustainability Report, 2005

ICI

Sustainability Report, 2005.

Nokia

www.nokia.com

Shell Volkswagen

The Shell Report, 2004. http://www.volks wagen-ag.de

C.S. Lai 2009

Defining sustainability
Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs. (World Commission on Environment and Development 1987) Sustainability refers to the long-term maintenance of systems according to environmental, economic and social considerations
B368 Business Issues and Ethics C.S. Lai 2009

The three components of sustainability

Economic Social

Environmental

B368 Business Issues and Ethics

C.S. Lai 2009

Activity
Think about the sustainability of current transport systems. Are they sustainable? In what aspects they are not sustainable?
How business ethics is related to sustainability?

B368 Business Issues and Ethics

C.S. Lai 2009

Triple bottom line

Coined by John Elkington Bottom line thinking suggests sustainability as a goal Three dimensions:
Environmental perspectives Economic perspectives Social perspectives
B368 Business Issues and Ethics C.S. Lai 2009

Europe: a key perspective for business ethics?

B368 Business Issues and Ethics

C.S. Lai 2009

European vs alternative approaches to business ethics

Who is responsible for ethical conduct in business? Who is the key actor in business ethics? What are the key ethical guidelines for ethical behaviour? What are the key issues in business ethics? What is the most dominant stakeholder management approach?
B368 Business Issues and Ethics C.S. Lai 2009

Differences in business ethics between Europe, the US & Asia

Who is responsible for ethical conduct in business? Who is the key actor in business ethics? What are the key guidelines for ethical behaviour? What are the key issues in business ethics? What is the dominant stakeholder management approach? Europe Social control by the collective Government, trade unions, corporate associations Negotiated legal framework of business Social issues in organizing the framework of business Formalised multiple stakeholder approach United States The individual Asia Top management The corporation Government, corporations Managerial discretion

Corporate codes of ethics

Misconduct and Corporate immorality in single governance and decisions situations accountability Focus on shareholder value Implicit multiple stakeholder approach, benign managerialism
C.S. Lai 2009

B368 Business Issues and Ethics

Summary
Definition of business ethics Business ethics is vital for business in contemporary capitalism Global view is essential to understand ethical issues Sustainability is an important goal for business ethics Europe has a distinctly different perspective on business ethics issues

B368 Business Issues and Ethics

C.S. Lai 2009

About submitting TMA

By Post or by Online Submission. Send your TMA well before the due dates. You should submit each assignment by the cut-off date. Late submissions cannot be accepted. If you send by post, enclose the TMA form, acknowledge card with stamp Put down my CORRECT address DONT use registered mail. I NORMALLY IGNORE REGISTERED MAIL!
B368 Business Issues and Ethics C.S. Lai 2009

TMAs
You MUST pass (i.e. +40%) BOTH assignments and final examination in order to pass the course Keep a copy of each assignment TMA should arrive MY MAILBOX on / before the due date 7 days extensions will NOT normally be granted, unless you have GOOD reasons and with prior permission. (Do you know the official procedure of requesting extension?) OUHK does not accept postal loss as a reason for extension
B368 Business Issues and Ethics C.S. Lai 2009

Reminders
TMA 1 due on Nov. 27, 2009. Next meeting Oct. 31 2009 @ OUHK

B368 Business Issues and Ethics

C.S. Lai 2009

To download this presentation: http://alumni.cuhk.edu.hk/~cslai Enjoy the course and Good Luck

See you next time

B368 Business Issues and Ethics C.S. Lai 2009