© colin boyd 2006iabc ethics presentation a simple model of analysis for ethical decision-making by...

© Colin Boyd 2006IABC Ethics Presentation

A Simple Model of Analysis forEthical Decision-Making

byColin Boyd

Professor of ManagementUniversity of Saskatchewan


Oxymorons

• Jumbo shrimp• Military intelligence• Postal service• Gourmet pizza

• Business ethics


Where is the boundary between moralityand immorality in the quest for profits?

In 1988 the West German newspapers described the activities of

a particular businessman. He had been advertising in Pakistan for

healthy volunteers to donate one of their kidneys, and several had

already come to Germany for the donation operation. The

businessman paid the volunteers about $10,000, a large sum in

comparison to annual incomes in Pakistan. He also paid the

donors’ expenses, and the medical costs involved in the removal

of the kidney from each healthy donor. The businessman sold the

kidneys for around $30,000 each, for transplant into patients

attending a private medical clinic. All of these patients were

wealthy, and most were from Arabic countries.


Social Consensus

The Law

Should the law be taken as the definition of right and wrong in guiding managers as to the morality of business conduct? If it is legal, then surely it can’t be wrong?


Everything that is moral

Everything that is legal

All that is moral and legal at the

same time

Legal but immoral: discriminationagainst Jews in Nazi Germany

Moral but illegal: exceeding theSpeed limit in rural Saskatchewan


You can't teach me ethics!

I learned all my values .....on my mother's knee

.....in kindergarten

.....at my church

You can move fromlower to higher levelsof moral reasoning

"daddy says it is wrong” - fear of punishment

"my friends won't like me" - peer pressure

"eating meat is wrong” - moral principles


We spend very little time examining our core values

• ……and yet they seem to have a great influence on our daily lives……for example, how much

time and money do you spend each week related to your core

values regarding

PERSONAL HYGIENE ??


Jane Smith, an old school friend, calls you on the phone to say that she is in town, staying at the Quality Inn for a night while on a business trip for Ajax Limited, her Halifax-based employer. She asks if you would like to get together and talk over old times. You meet in the hotel bar, and later decide to eat together in the hotel restaurant. When the bill comes you offer to pay your share, but Jane says no, she can charge the meal and drinks to her room. Ajax will pay, she says. She will pretend you were a business client.

Honesty: Dinner with Jane


Jane later contacts you.....

1 to ask if you will give her a reference for a job

2 to ask for a reference for a job as a financial controller where she will be handling a lot of cash

3 to apply for a job as the financial controller of the company that you own


the profits of the firm

the wellbeing of employees

customer satisfaction

paying suppliers on time

respect for the environment

In business, which comes first?

Which has priority?

What happens when you cannot satisfy these different

constituencies?


ETHICSGreek - “proper conduct”

ETHNICpeople of one's own kinda community of shared values

ETHOSGreek - the essential character or

spirit of a person or organizationthe prevalent sentiment of a

community


Ethical AnalysisOr

Moral Reasoning

•Stakeholder identification•End-point ethics, Utilitarianism•Human Rights•Justice or Rule-based ethics


PRIMARY STAKEHOLDERS(those who have a direct economic stake in the welfare of the organization)

SHAREHOLDERS

COMPETITORS

CUSTOMERS

DISTRIBUTORS (WHOLESALERS,

RETAILERS)

CREDITORS

SUPPLIERS

EMPLOYEES (UNIONS)

MANAGERS

Buy products

Compete for customers

Distribute products

Sell raw materials

Provide labour

Provide admin skills

Lend cash

Invest capital


SECONDARY STAKEHOLDERS

+future

stakeholders?future

generations?

THE GENERAL

PUBLIC

NEXT-DOOR NEIGHBOURS

THE LOCAL COMMUNITY

FEDERAL GOVERNMENT

THE MEDIA

LOCAL GOVERNMENT

BUSINESS LOBBY GROUPS

SOCIAL ACTIVIST GROUPS

…are affected not so much by the scale of the organization, but more by its existence. These

stakeholders are not inferior to primary stakeholders, but have a secondary type of relationship


A Utilitarian Analysis

TotalBenefits

TotalHarms

Do the benefits exceed the harms?At the end-point, what is the balance?


Alternative A Alternative B

Stakeholder #1

Stakeholder #2

Stakeholder #3

Stakeholder #4

Stakeholder #5

Do the total benefits exceed the total harms?

Net Outcomes

End-Point Ethics, or Utilitarianism


The cost is $11 per car x 11 million Pintos

= $121 million

The benefit is the saving of 180 lives @ $200,000 per life

= $36 million

Utilitarianism in Action:The Ford Pinto

As the cost of $121 million outweighed the social benefit of $36 million, Ford concluded that improving the Pinto design would not be profitable for Ford, or for society in general. Ford managers decided to go ahead with production of the Pinto as designed.


Global satelite positioning systems (GPS) can now be fitted to automobiles. When combined with data from a CD drive map of a local area, any car can know its own position to within a few meters. It can also know what the maximum speed limit is for that precise location

The UK Government is considering a recommendation for making automobiles automatically compliant with local speed limits – your car would not let you drive any faster than the local speed limit.

It is estimated that this simple measure would cut road deaths and injuries by around 60% per year. No one would be allowed to speed.

Automatic Vehicle Speed Control


Are Human Rights Protected?

Basic Rights

LIBERTY RIGHTS

Things that I have that no one else should take from

me

WELFARE RIGHTS

Things that I do not have that someone else should give to

me


Are Human Rights Protected?Basic Rights

LIBERTY

The duty not to remove rights, such as the right to:

Privacy

Free Speech

Free Consent

Freedom of Conscience

WELFARE

The duty to provide rights, such as the right to:

Employment

Housing

Food

Education


Can your employer tell you how to vote?

Liberty Rights: The Right to Vote?

If an employee is seen advocating gay rights on TV at the weekend, is that relevant to the employer? Can a Christian employee try to convert fellow workers during work hours?

Liberty Rights: The Right to Free Speech?

Can an employer listen in on phone operators, reservations clerks? Watch you via video camera?

Liberty Rights: Do We Have a Right to Privacy?


Timing Your Visits to the Washroom

Workers at the Gainers meat-packing plant in Edmonton lose their pay when they go on bathroom breaks. Company president Larry Harding said the “personal relief” program was instituted in January 1994 because management felt that employees were taking advantage of bathroom and phone privileges. Each of Gainers’ 850 employees must ask a supervisor for permission to leave work outside lunch or coffee breaks. The typical Gainers worker earns $12 an hour and is docked 60 cents for every minute he or she is absent. If the worker is away for more than 20 minutes a week, he or she is temporarily suspended.

Liberty Rights: Personal Time at Work?


Welfare Rights: Do We Have a Right to a Job?

Loggers from North Vancouver Island protesting the creation of 23 new parks on Vancouver Island which threaten their right to their jobs

Coal miners in Sydney, N.S. argue against the closure of their mines

Welfare Rights: Do We Have a Right to an Education?

The USSU protesting that increased University of Saskatchewan tuition fees will prevent students from poor families from having access to secondary education. Everyone has a right to an education irrelevant of their economic background.


Are Other Rights Protected?

• Future Generations• Stakeholders in Different Cultures• Animals• Plants• Ecological Systems• The Earth


Late 20th Century Trends

• The evolution of rights issues• The collapse of paternalism (e.g. not

telling someone that they have

cancer – “it is best that Aunt Betty

not know…”)• The emergence of animal rights e.g.

the Body Shop, Cirque de Soleil,

attacks on animal transport in UK


Justice or Rule Ethics

Are the harms and benefits fairly and justly distributed across the affected stakeholders?

Is it fair?

RAWL's THEORY of JUSTICE

If you were to design a system of distribution of the benefits and harms across the stakeholders without

knowing in advance which stakeholder you would be, then how would you want the harms and benefits to

be distributed?


Justice or Rule Ethics

Test of Disclosure

How will the solution look if headlined in the newspaper?

Social Contract Ethics

Are the stakeholders willing partners, ready to swap positions with each other?

JANE FIDDLESHER EXPENSES

A B


“Its just like money for nothing!” exclaimed Sally with a laugh as she put her glass back on the bar. “I can’t believe my luck. $15,000 for one day’s work, its just crazy!”. Sally was a consultant who writes computer software for accounting systems. She was celebrating after having received a contract to design a new system for a client who was under the impression that such a system takes about 2 months of design work to complete. Sally was jubilant; “They don’t know that I designed an identical system for one of their competitors only a few weeks ago. All I have to do is to dust off that package, change the client’s name, and that’s it. One day’s work at the most! Isn’t it great?”

Money for Nothing


A Framework for Ethical Analysisof Business Decisions

Who are the affected stakeholders?

What are the outcomes for each stakeholderof the proposed solution to the problem?


End Point Ethics

Do the totalbenefits exceedthe total harms?

Rights

Are humanrights

protected?

Rule Ethics

Are the harms andbenefits fairly andjustly distributed?

Test of Disclosure

How will the solutionlook if headlined

in the newspaper?

Social Contract Ethics

Are the stakeholderswilling partners, ready

to swap positionswith each other?

© colin boyd 2006iabc ethics presentation a simple model of analysis for ethical decision-making by...

Documents

jane slide

rural saskatchewan slide

time legal

wrong moral principles

nazi germany moral

business trip

wrong fear

business client