Business Ethics Holt

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Front
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Back
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Ivan Illych
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The novella tells the story of the death, at age 45, of a high-court judge in 19th-century Russia. Living what seems to be a good life, his dreadful relationship with his wife notwithstanding, Ivan Ilyich Golovin injures his side while hanging up curtains in a new apartment intended to reflect his family’s superior status in society. Within weeks, he has developed a strange taste in his mouth and a pain that will not go away. Several expensive doctors are consulted, but beyond muttering about blind gut and floating kidneys, they can neither explain nor treat his condition, and it soon becomes clear that Ivan Ilyich is dying.The second half of the narrative records his terror as he battles with the idea of his own death. “I have been here. Now I am going there. Where? … No, I won’t have it!” Oppressed by the length of the process, his wife, daughter, colleagues, and even the physicians, decide in the end not to speak of it, but advise him to stay calm and follow doctors’ orders, leaving him to wrestle with how this terrible thing could befall a man who had lived so well.He spends his last three days screaming. He realizes he is “done for, there was no way back, the end was here, the absolute end …” One hour before his death, in a moment of clarity, he sees that he has not, after all, lived well, but has lived only for himself. After months of dwelling on his own anguish, he suddenly feels pity for the people he’s leaving behind, and hopes his death will set them free. With that thought, his pain disappears. He hears someone say, “He’s gone.” He whispers to himself, “Death has gone,” and draws his last breath.
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Your most important take-away insights from reading The Death of Ivan Ilyich with respect to the questions of what matters most in life and how best to shape one’s life accordingly.
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Moral – “A man is just, not willingly or because he thinks that justice is any good to him individually, but of necessity, for wherever anyone thinks that he can safely be unjust, there he is unjust.”Distinguishing technically and Morally Good Actions – Technically good actions- the concrete good the situation calls for is done. Morally good actions- the concrete good is done in a morally praiseworthy mannerWorthy Dreams – “At the center of character are dreams for life and work. Leaders spend much of their time thinking ahead and planning, setting goals and assessing progress. But behind these rational, practical-minded efforts, they are pursuing their dreams.” Randy Pausch (inspirational speech – The last lecture) – Live with integrity! Tell the truth, apologize, show gratitude.
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Ethical Theory (see reading and relevant PPT slides)
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1. Any useful ethical theory offers a distinctive standard or criterion of morality, a yardstick for measuring the rightness or wrongness of any action.2. Of any purported theory, ask “What standard or criterion of morality does this theory offer?”
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Whether self-interested = selfish
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Selfish” is defined in the Merriam-Webster dictionary as follows:”Concerned excessively or exclusively with oneself : seeking or concentrating on one’s own advantage, pleasure, or well-being without regard for others”
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Re. utilitarianism, the difference between act and rule utilitarianism, and distinguishing ethical egoism
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An action is right to the extent it leads to the best possible balance of good consequences over bad consequences for all the parties affected.Act Utilitarianism: What particular action will produce the greatest balance of good over bad consequences for all the parties affected? Rules are “rules of thumb” generally but not always followed.Rule Utilitarianism: What rules, if consistently followed, will promote the greatest balance of good over bad consequences for all the parties affected? Particular actions are justified by appeal to general rules
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Re. deontology, Kant’s Categorical Imperative and Respect for Persons Principle
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An action is right insofar as it fulfills relevant duties.Principles that underlie our overarching moral duties:Categorical Imperative: “I ought never to act except in such a way that I can also will that my maxim should become a universal law.”Respect for Persons Principle: “Always treat humanity, whether in yourself or another, as an end and never merely as a means.”
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Re. virtue ethics, the meaning of each of the 4 cardinal virtues and their relevance for effective business leadership
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Virtue Ethics: focus on the kind of person you want to become and make particular choices consistently with that ideal (Aristotle)Prudence: choosing effective means to morally positive endsJustice: giving to each his or her dueTemperance: a harmony of desires and appetites conducive to effective moral thought and actionCourage: doing what you believe is right even at the risk of personal injury or loss
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From “Going Deeper (and Higher) Into Values and Ethics,” Lee, what is the difference between merely good or decent and being morally courageous?
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Merely good is honoring your conscience and listen to yourself and watch for blinking red lights. But sometimes don’t get clear signals.Morally courageous: “The courageous stand to the right. They boldly take risks for principles and for others. Out of fifty managers, you can count the members of this group on one hand.”
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Based on the Lee & Voyer readings, to what extent is courage necessary to effective leadership?
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Character Matrix of the Goodn – Stands on the safe, near bank- Avoids personal wrongs- Takes no stand for principles- Will stand for favoritesn Honesty- Tells the truth- Avoids liesn Honor- Does not lie- Does not cheat- Does not stealn Ethics- Follows an ethical code- Doesn’t do more than be ethicaln Courageous Person- Stands on the far bank- Boldly stands for principles- Boldly stands for all others- Supports values- Does not play favoritesn Integrity- Discerns right from wrong- Acts for the right despite risks- Teaches others from that actn Courage- Stops wrongs in self- Challenges wrongs in others- Follows throughn Character- Sustained integrity and courage- Always maximizes integrity
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From “Just Following Orders,” by Heffernan, and the Milgram Obedience video, what factors incline someone to follow or defy an order from an authority figure that goes against their voice of conscience? From “The Discipline of Building Character,” Badaracco:
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Someone might defy orders knowing that the situation is not right. Following orders yields the other person is responsible for whatever occurs. This enables the person doing the act the offloading of responsibilities.”A substantial proportion of people do what they are told to do, irrespective of the content of the act and without limitations of conscience, so long as they perceive that the command comes from a legitimate authority.””When an individual wishes to stand in opposition to authority, he does best to find support for his position from others in his group. The mutual support provided by men for each other is the strongest bulwark we have against the excesses of authority.”Badaracco: Defining Moments
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Badaracco: Defining Moments
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They have three characteristics: “they reveal, they test, and they shape” “In other words, a right-versus-right decision can reveal a manager’s basic values and, in some cases, those of an organization.” “At the same time, the decision tests the strength of the commitment that a person or an organization has made.” “Finally, the decision casts a shadow forward. It shapes the character of the person and, in some cases, the organization.”
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What precisely is a defining moment? Why are they important?
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“We form our character in defining moments because we commit to irreversible courses of action that shape our personal and professional identities. We reveal something new about us to ourselves and others because defining moments uncover something that had been hidden or crystallize something that had been only partially known. And we test ourselves because we discover whether we will live up to our personal ideals or only pay them lip service.” “…These decisions taken cumulatively over many years form the very basis of an individual’s character. For that reason I call them defining moments.”
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The defining moment faced by Peter Adario and what can we learn from his experience?
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Defining Moment: When professional responsibilities conflict with our personal values, we are presented with a choice of ideals. We must reconcile idealism with reality. We must uphold our values.
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My Peter Adario takeaway
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Odd that he does not know the character of his direct reportPrevented him from perceiving her point of viewPrevented him from anticipating her actionNot an effective manager or leaderThe example is brief, but it appears that there is a lack of either 1) communications between Peter and Lisa or 2) Lisa does not respect Peter
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The unreliable and reliable versions of the sleep test
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Counterfeit and Valid
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The Counterfeit (Unreliable) Version of the Sleep Test – Me-ism
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Highly subjectiveIntensely individualisticSelf-validating personal reactions
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The Valid (Reliable, Aristotelian) Version of the Sleep Test
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Development personal of character (virtue ethics)Serious attention to facts, not a single, compelling impulseDoes not cross ethical boundaries or right and wrongNot a substitute for common sense, logic or basic ethical principlesCan be explained and articulated to others in ways that draws on important social and ethical practices in society
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The Four Component Model (drivers of moral behavior) 4 Psychological Components
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SJMC
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Moral Sensitivity
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Moral Sensitivity – Interpreting the situationFailure to interpret a situation adequately shows a lack of awareness and has implications in how our actions (or inactions) can affect others.
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Moral Judgement –
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judging actions as morally right and wrongdid we think our actions through and if so, is our action morally justified?
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Moral Motivation
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– prioritizing moral values relative to other valuesDo you prioritize other values (selfish values/institutional preservation) ahead of intrinsic moral virtues? (Think Hitler)
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Moral Character –
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Having courage, persisting, overcoming distractions, implementing skillsIf you adhere to the other three components, but do not have the fortitude to carry the action, then it is a waste.
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Four Components
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All four components must exist to act morally, but not in any particular order. These are interconnected, components that rely on one another to carry out a morals-based decision.
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Teleopathy(meaning and 3 symptons)
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路 The unbalance pursuit of objectives (persons or organizations) independent of ethical reflection路 In its extreme form, it amounts to the suspension of ethical awareness as a practical force in the decision-making process.
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Teleopathy(meaning and 3 symptons)
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Fixation路 Holding on to an objective/goal too long. Realized costs can be far greater than if the goal were just abandoned. A disregard of distress and warnings signs; adversely affects reasoning and action.Rationalization路 To explain poor behavior as being proper, attractive or somehow acceptableDetachment路 To remove one’s self from the total reality of a situation. e.g. In business, separating qualities of heart and head
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The difference between technically and morally good actions
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n Technically good actions- the concrete good the situation calls for is donen Morally good actions- the concrete good is done in a morally praiseworthy mannern Technically good action: stopping to help an elderly couple stranded alongside the roadway to impress your true loven Morally good action: stopping to help the stranded elderly couple when driving alone and no one but them knows about it
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What is the primary purpose of a business (know the competing views and be able to articulate your own reasoned view)
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“…A group of people get together and exist as…a company so that they are able to accomplish something collectively that they could not accomplish separately- they make a contribution to society, a phrase which sounds trite but is fundamental.””Corporations prosper only to the extent that they satisfy human needs. Profit is only the scoring system. The end is better living for us all.””Purpose can bring an uplifting moral quality to a company’s mission. In doing so, it appeals to the organizational members’ highest instincts, unifying their personal aspirations and their work and unleashing greater initiative and commitment in service of corporate ends.”
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“Google in China,” by Hamilton, Knouse & Hill (6 question framework for doing business abroad where there are lower ethical/legal standards, the difference it makes whether it is a compliance-only or compliance + integrity company)
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1. What is the Questionable Practice (QP)? 2. Does the QP violate any laws that are enforced? 3. Does the QP simply reflect a cultural difference or is it also a potential ethics problem? 4. Does the QP violate the firm’s core values or ethics code or an international convention? 5. Does the firm have leverage to do business the firm’s way? 6. Will doing business the firm’s way improve practices in the host’s market?
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Six Heuristic Questions
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1. What is the Questionable Practice (QP)? 2. Does the QP violate any laws that are enforced? 3. Does the QP simply reflect a cultural difference or is it also a potential ethics problem? 4. Does the QP violate the firm’s core values or ethics code or an international convention? 5. Does the firm have leverage to do business the firm’s way? 6. Will doing business the firm’s way improve practices in the host’s market?
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Compliance Only Companies
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– Have the goal of complying as necessary with relevant laws, regulations and key stakeholder demands and view their behavior as morally adequate so long as they are not punished by the law or society or a key stakeholder
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Compliance/Integrity Companies
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– Have the goal beyond compliance of adhering to core values or international norms beyond what is required by relevant laws or society or key customer demands, and view their behavior as morally adequate only if they live up to those freely-chosen standards
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“Fire in a Bangladesh Garment Factory” case (have a reasoned view on “Who should do what, when and where and why?” under the circumstances described)
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Suggested factors to consider when determining the responsibility of a corporate actor?
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– Causation – Capability – Awareness & knowledge – Proximity – Critical need
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“The Iron Law of Responsibility”:
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“If business has the power, then a just relationship demands that business also bear responsibility for its action in these areas. . . . The iron law of responsibility is that . . . in the long run, those who do not use power in a manner which society considers responsible will tend to lose it.”
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d. “Managing for Organizational Integrity,” Paine: i. The differences between the compliance-based and integrity-based approaches to ethics management
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+Compliance
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鈥 “Ethos: conformity with externally imposed standards鈥 Objective: prevent criminal misconduct鈥 Leadership: lawyer driven鈥 Methods: education, reduced discretion, auditing and controls, penalties鈥 Behavioral Assumptions: autonomous beings guided by material self-interest”
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Integrity
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鈥 “Ethos: self-governance according to chosen standards鈥 Objective: enable responsible conduct鈥 Leadership: management driven with aid of lawyers, HR, others鈥 Methods: education, leadership, accountability, organizational systems and decision processes, auditing and controls, penalties鈥 Behavioral Assumptions: social beings guided by material self-interest, values, ideals, peers”
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The limits to the compliance-based approach
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– Standard: criminal and regulator law- Staffing: Lawyers- Activities: Develop compliance standards, train and communicate, handle reports of misconduct, conduct investigations, oversee compliance audits, enforce standards.- Education: compliance standards and systems
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The hallmarks of an effective integrity strategy (The four components and four cardinal virtues shed light on what needs to be in place at the personal level for positive moral behavior to occur; the “hallmarks” Paine identifies shed light on what needs to be in place at the organizational level)
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鈥 “The guiding values and commitments make sense and are clearly communicated. They reflect important organizational obligations and widely shared aspirations that appeal to the organization’s members. Employees at all levels take them seriously, feel comfortable discussing them, and have a concrete understanding of their practical importance. This does not signal the absence of ambiguity and conflict but a willingness to seek solutions compatible with the framework of values.”鈥 “Company leaders are personally committed, credible, and willing to take action on the values they espouse. They are not mere mouthpieces. They are willing to scrutinize their own decisions. Consistency on the part of leadership is key. Waffling on values will lead to employee cynicism and a rejection of the program. At the same time, managers must assume responsibility for making tough calls when ethical obligations conflict.”鈥 The espoused values are integrated into the normal channels of management decision making and are reflected in the organization’s critical activities: the development of plans, the setting of goals, the search for opportunities, the allocation of resources, the gathering and communication of information, the measurement of performance, and the promotion and advancement of personnel.鈥 The company’s systems and structures support and reinforce its values. Information systems, for example, are designed to provide timely and accurate information. Reporting relationships are structured to build in checks and balances to promote objective judgment. Performance appraisal is sensitive to means as well as ends.
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The extent to which the hallmarks of an effective integrity strategy identified by Paine were or were not in in place at BP. Your thoughts on what led to the crises we discussed at BP in the first place, and on what would need to be in place at BP for that company to live its professed ideals and avoid similar tragedies in the future?
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f. Collins’ five-stage framework for how the mighty fall as applied to the collapse of Lehman Bros.
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HUDGD
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Hubris Born of Success
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鈥 “Stage 1 kicks in when people become arrogant, regarding success virtually as an entitlement, and they lose sight of the true underlying factors that created success in the first place. When the rhetoric of success (‘We’re successful because we do these specific things’) replaces penetrating understanding and insight (‘We’re successful because we understand why we do these specific things and under what conditions they would no longer work’), decline will very likely follow.”
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Undisciplined pursuit of more
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鈥 “Companies in Stage 2 stray from the disciplined creativity that led them to greatness in the first place, making undisciplined leaps into areas where they cannot be great or growing faster than they can achieve with excellence鈥攐r both. Although complacency and resistance to change remain dangers to any successful enterprise, overreaching better captures how the mighty fall.”
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Denial of risk and peril
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鈥 “In Stage 3, leaders discount negative data, amplify positive data, and put a positive spin on ambiguous data. Those in power start to blame external factors for setbacks rather than accept responsibility. The vigorous, fact-based dialogue that characterizes high-performance teams dwindles or disappears altogether.”
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Grasping for salvation
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鈥 “Those who grasp for salvation have fallen into Stage 4. Common ‘saviors’ include a charismatic visionary leader, a bold but untested strategy, a radical transformation, a dramatic cultural revolution, a hoped-for blockbuster product, a ‘game-changing’ acquisition, or any number of other silver-bullet solutions. Initial results from taking dramatic action may appear positive, but they do not last.”
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Capitulation to irrelevance or death
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鈥 “In Stage 5, accumulated setbacks and expensive false starts erode financial strength and individual spirit to such an extent that leaders abandon all hope of building a great future. In some cases the company’s leader just sells out; in other cases the institution atrophies into utter insignificance; and in the most extreme cases the enterprise simply dies outright.”
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The meaning of sustainable development
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“Development that meets the needs of the present without compromising the ability of future generations to meet their own needs.”
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The three pillars of a sustainable society
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EconomicEcologicalEthical
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Economic development as distinguished from economic growth
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Economic Growth ? Economic Development鈥 “Growth means getting bigger; development means getting better.”鈥 “…True economic development must encourage targeted economic growth in those areas in which human well-being can be promoted in ecologically sustainable ways and a decrease in those economic activities that degrade the earth’s biosphere.”
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The business case for sustainability (Senge and your own thoughts)
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Three categories of reasons to adopt a sustainable approach to business: 鈥 Realizing upside benefits 鈥 Managing downside costs & risks 鈥 Level IV environmental stewardship
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Cradle-to-cradle at Herman Miller case: what is the meaning of the cradle-to-cradle approach and what business challenges does that approach entail? Which way to you think Drew Schramm should go with respect to the dilemma described in the case? Why?
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Cradle to Grave
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Cradle to Grave – “It involved digging up, cutting down, or burning natural resources – releasing toxic material into the environment in the process- to make products that became useless waste at the end of their useful lives.”
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Cradle to Cradle. –
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Cradle to Cradle. – “…The cradle to cradle approach mirrors nature’s regenerative cycle so that at the end of its useful life, a product and its component materials are used to make equally valuable products.”
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Solititude and Leadership. What is the importance of solitude to effective leadership according to the author, and in your own opinion if different from his?
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“Solitude is what you have the least of…. You don’t even have privacy, the opportunity simply to be physically alone, never mind solitude, the ability to be alone with your thoughts. And yet I submit to you that solitude is one of the most important necessities of true leadership.”

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