978-1285197159 Chapter 1 Give examples of behaviors that may be considered

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Chapter 1

An Overview of Ethics

At a Glance

Instructor’s Manual Table of Contents

Overview

Objectives

Teaching Tips

Quick Quizzes

Discussion Questions

Additional Projects

Additional Resources

Key Terms

Lecture Notes

Overview

Chapter 1 introduces the concepts of ethics and morality. Creating an ethical business

environment is discussed and various approaches to making ethical decisions are presented.

Finally, the chapter highlights some issues specific to information technology.

Objectives

As students read this chapter, they should consider the following questions:

What is ethics, and why is it important to act according to a code of ethics?

Why is business ethics becoming increasingly important?

What are organizations doing to improve their business ethics?

What is corporate social responsibility?

Teaching Tips

Vignette—Cisco Chairman and CEO Advocates Ethical Behavior

1. Describe some of the ways in which Cisco fulfills its corporate social responsibilities and

how it emphasizes maintaining high ethical business standards.

I. What is Ethics?

1. Begin the discussion by explaining that every society forms a set of rules that establishes

the boundaries of generally accepted behavior. These rules are often expressed in

statements about how people should behave, and the individual rules fit together to form

the moral code by which a society lives.

2. Introduce the terms moral code and morality.

A Definition of Ethics

1. Ethics is a set of beliefs about right and wrong behavior within a society. Note that

ethical behavior conforms to generally accepted norms—many of which are almost

universal.

Teaching

Tip

Give examples of behaviors that may be considered ethical in one culture but

unethical in another.

2. Introduce the terms software piracy, virtue, and vice.

B. The Importance of Integrity

1. Explain that a person who acts with integrity acts in accordance with a personal code of

principles. One approach to acting with integrity—one of the cornerstones of ethical

behavior—is to extend to all people the same respect and consideration that one expects

to receive from others.

2. Note that if people are consistent and act with integrity, they apply the same moral

standards in all situations.

Teaching

Tip

Give examples of situations in which it might be difficult to be consistent in

applying moral standards.

3. Point out that many ethical dilemmas are not as simple as right versus wrong but

involve choices between right versus right.

C. The Difference between Morals, Ethics, and Laws

1. Explain that the term morals refer to one’s personal beliefs about right and wrong,

while the term ethics describes standards or codes of behavior expected of an individual

by a group (nation, organization, profession) to which an individual belongs.

II. Ethics in the Business World

1. Explain that ethics has risen to the top of the business agenda because the risks associated

with inappropriate behavior have increased, both in their likelihood and their potential

negative impact.

2. Students should be aware of the trends that have increased the likelihood of unethical

behavior. For example, greater globalization has created a much more complex work

A. Corporate Social Responsibility

1. Introduce the term corporate social responsibility (CSR)—the concept that an

organization should act ethically by taking responsibility for the impact of its actions on

the environment, the community, and the welfare of its employees.

B. Why Fostering Corporate Social Responsibility and Good Business Ethics Is Important

1. Briefly discuss the five reasons for pursuing CSR goals and for promoting a work

environment in which employees are encouraged to act ethically when making business

decisions.

Gaining the Goodwill of the Community

1. Although organizations exist primarily to earn profits or provide services to customers,

they also have some fundamental responsibilities to society. Companies often declare

these responsibilities in specific CSR goals. Companies may also issue a formal

statement of their company’s values, principles, or beliefs. Use Figure 1-1 to aid the

discussion.

2. Introduce the term stakeholder.

3. Use Table 1-2 to discuss some of the CSR activities supported by major IT

organizations.

4. Explain that companies viewed as harmful to their community suffer a disadvantage.

Creating an Organization That Operates Consistently

1. Organizations develop and abide by values to create an organizational culture and to

define a consistent approach for dealing with the needs of their stakeholders—

shareholders, employees, customers, suppliers, and the community. Explain that such

Fostering Good Business Practices

1. Explain that in many cases, good ethics can mean good business and improved profits.

Companies that produce safe and effective products avoid costly recalls and lawsuits.

2. Point out that bad ethics can have a negative impact on employees, many of whom

Protecting the Organization and Its Employees from Legal Actions

1. Explain that in a 1909 ruling (United States v. New York Central & Hudson River

Railroad Co.), the U.S. Supreme Court established that an employer can be held

Avoiding Unfavorable Publicity

1. An important point to make is that the public reputation of a company strongly

influences the value of its stock, how consumers regard its products and services, the

degree of oversights it receives from government agencies, and the amount of support

and cooperation it receives from its business partners.

2. Note that many organizations are motivated to build a strong ethics program to avoid

negative publicity.

Quick Quiz 1

1. True or false. A person who acts with integrity acts in accordance with generally accepted

social norms.

2. A(n) _____ is a habit that inclines people to do what is acceptable.

3. A(n) _____ is a habit of unacceptable behavior.

4. What is ethics?

5. What is morality?

C. Improving Corporate Ethics

1 Briefly discuss the characteristics of a successful ethics program, as defined by the

Ethics Resource Center (ERC).

Appointing a Corporate Ethics Officer

1 Introduce the concept of a corporate ethics officer (also called a corporate

compliance officer). Note that ideally, the corporate ethics officer should be a

well-respected, senior-level manager who reports directly to the CEO.

2 An interesting point to make is that the ethics officer position has its critics. Many are

Ethical Standards Set by Board of Directors

1 Point out that in a for-profit company, the board of director’s primary objective is to

oversee the organization’s business activities and management for the benefit of all

stakeholders, including shareholders, employees, customers, suppliers, and the

community.

4 Note that board members are expected to conduct themselves according to the highest

standards for personal and professional integrity, while setting the standard for

company-wide ethical conduct and ensuring compliance with laws and regulations.

Teaching To learn about the ethical guidelines for board members of not-for-profit

Establishing a Corporate Code of Ethics

1 Explain that a code of ethics is a statement that highlights an organization’s key

ethical issues and identifies the overarching values and principles that are important to

an organization and its decision making.

2 Introduce the Sarbanes–Oxley Act of 2002, which was passed in response to public

outrage over several major accounting scandals, including those at Enron, WorldCom,

Tyco, Adelphia, Global Crossing, and Qwest—plus numerous restatements of financial

reports by other companies, which demonstrated a lack of oversight within corporate

America.

3 Note that Section 404 of the Sarbanes-Oxley Act states that annual reports must

contain a statement signed by the CEO and CFO attesting that the information

contained in all of the firm’s Securities and Exchange Commission (SEC) filings is

accurate.

4 Explain that Section 406 of the Sarbanes-Oxley Act requires public companies to

disclose whether they have a code of ethics and to disclose any waiver of the code for

certain members of senior management.

5 Intel Corporation is recognized as one of the most ethical companies in the IT industry.

Use Figure 1-3 to discuss Intel’s code of ethics.

Conducting Social Audits

1 Explain that in a social audit, an organization reviews how well it is meeting its

ethical and social responsibility goals, and communicates its new goals for the

upcoming year.

Requiring Employees to Take Ethics Training

1 Note that Lawrence Kohlberg found that many factors stimulate a person’s moral

development, but one of the most crucial is education.

2 An organization’s code of ethics must be promoted and continually communicated

3 Formal ethics training not only makes employees more aware of a company’s code of

ethics and how to apply it, but also demonstrates that the company intends to operate

in an ethical manner. Note that the existence of formal training programs can also

reduce a company’s liability in the event of legal action.

Including Ethical Criteria in Employee Appraisals