Fundamental Concepts

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1 About Topics Teaching Methods Sample Material Search FAQ Introduction 1. Fundamental Concepts 2. Economics, Market Failure, and Professional Dilemmas 3. Legislation, Control by Law, Agency, and Fiduciary Duty 4. Why Corruption? Behavioural Issues Fundamental Concepts RATIONALE In building essential knowledge of the interplay of markets, ethics, and law, fundamental concepts lay the groundwork for a business ethics and anti-corruption curriculum. Fundamental concepts explore the requirements for a morally articulate solution to management issues in general and to resisting corrupt practises in particular. The elements of a morally articulate solution are: (1) Truth insistence on truthfulness and accuracy of facts on which the solution is based;; (2) Justice The tribute that power pays to reason (Robert Jackson);; and (3) Whether there are limits to reason s scope in global markets with significant local cultural differences (Amartya Sen). In this regard, a just decision-making process requires substantive and procedural fairness, good faith, and results that are solicitous of rights and rigorous in the imposition of duties. It also necessitates the utilisation of philosophical or economic problem solving methods that include, but are not limited to: (a) Classical Virtue;; (b) Duty (Deontology);; (c) Utilitarianism

2 5. Conflicts of Interest 6. International Standards and Supply Chain 7. Managing Anti- Corruption Issues 8. Functional Area and Anti-Corruption Issues 9. Truth and Disclosure 10. Whistleblowing 11. The Developing Global Anti-Corruption Regime (consequentialism);; and (d) Game Theory, which provide a framework for determining the appropriate course of action when confronted with an ethical challenge. It is not unusual for these analyses to prescribe conflicting courses of action. Whistleblowing dilemmas afford a good example of how utilisation of these methods can result in different recommended courses of action. Regardless of motive or good faith, whistleblowing has a Utilitarian justification if it results in the best outcome, while deontological, duty-based ethics disapproves of disloyal acts under almost any circumstances. Further, how can the greatest good for the greatest number be determined? To whom is the greater loyalty owed to friend or country? These ethical and economic methods of analysis are useful tools for discussing key governance and citizenship topics such as stakeholder obligation and sustainability subjects in which corruption problems invariably arise. Ethics-based discussion can also utilise stakeholder analysis, the problem of restricted reasons and permissible violation, omnipartial rule-making, and the entity and property conceptions of corporate purpose. The issue is not whether these approaches are consonant with current business decision and strategy formulations. Instead, their purpose is to offer an alternative for individual and organisational choice to analytic methods that are now in use. [3] [1] Halbert, Terry and Elaine Ingulli. Making an Ethical Decision, Law and Ethics in the Business Environment, 3rd Ed. Southwestern College Publishing: Applbaum, Arthur Isaak. Ethics for Adversaries: The Morality of Roles in Public and Professional Life. Princeton University Press: Green, Ronald M. Neutral Omni-partial Rule-Making, The Ethical Manager. Prentice-Hall, Inc.: Miller, Gary. Ethics and the New Game Theory, Ethics and Agency Theory, edited by Norman R. Bowie and R. Edward Freeman. Oxford University Press: O Neill, Onora. A Question of Trust, The BBC Reith Lectures, Cambridge University Press: READ LESS LEARNING METHODS Having completed the module, students will have ethical decision-making skills to: Frame ethical issues: One study found that case study participants who faced a potential fine cheated more, not less than those who faced no sanctions. With no penalty, the situation was construed as an ethical dilemma;; the penalty caused individuals to view the decision as a financial one (emphasis added). [1] This finding will come as no surprise

3 to anyone familiar with legal safe harbour formulas. Operationalise ethical choices: As one business ethicist observed about business students and ethical problems, people often want to act ethically, they simply don t know how to do it effectively Instead of asking what would you do? Ethical case discussions should ask the question What if I were going to act on my values: What would I do and say? To whom? How? In what sequence? [2] This comment raises the question of the degree to which an ethical temperament is innate and whether and what environmental factors can be used to enhance it. [3] Use ethical reasoning for decision making: (e.g. deontology, utilitarianism) in order to discipline thinking about ethical choices, and how to use ethics analytics for decision making. [4] Different ethics analytics will often lead to prescriptions for different courses of action. [1] Bazerman, Max H. and Ann E. Tenbrunsel. Stumbling Into Bad Behavior, The New York Times, April 21, 2011, p. A27. [2] Mary Gentile: Missing the point on biz ethics, The Providence Journal, July 5, Gentile has written a book and developed a curriculum on Giving Voice to Values that explores these ideas in detail. and The curriculum was developed in collaboration with the Aspen Institute and Yale School of Management and is now housed and funded at Babson College. The approach and materials have been piloted at over 250 institutions on 6 continents. Giving Voice to Values (GVV) is an innovative, cross-disciplinary business curriculum and action-oriented pedagogical approach for developing the skills, knowledge and commitment required to implement values-based leadership. Rather than the usual focus on ethical analysis, GVV focuses on ethical implementation and asks the question: What would I say and do if I were going to act on my values? Drawing on the actual experiences of managers as well as multi-disciplinary research, GVV helps students identify the many ways to voice their values in the workplace. It provides the opportunity to script and practise in front of peers, equipping future business leaders not only to know what is right, but how to make it happen. The institutions established in this process then formulate and enforce specific rules of conduct. See for example, the US Constitution. Such evolution can be critical to success in a global business institution effort to articulate common principles. As Justice Oliver Wendell Holmes of the US Supreme Court wrote, a constitution is made for people of fundamentally different views. [3] Evolutionary biologists have used chimpanzee experiments to suggest that certain moral traits may be innate rather than evolved. As Frans B. M. dewaal said in a May 6, 2011, NYU Paduano Seminar, if chimpanzees show a sense of fairness maybe we didn t have to wait for the French Revolution and the human discovery of the importance of equality. For a discussion of de Waal and other sources, see Frances Fukuyama, The Origins of the Political Order from Prehuman Times to the French Revolution, Farrar, Straus and Giroux (2011), pp < [4] Ibid. READ LESS

4 STUDY QUESTIONS 1. What advice would Friedman ( The Social Responsibility of Business ) and Allen ( Our Schizophrenic Conception ) give to Curt, the Executive Vice President of Curem Pharmaceutical? Do you agree with Friedman or Allen? Use ethical methods and fiduciary duty concepts to support your position. 2. If you were the manager of Bally s Grand Casino, would you treat Elaine Cohen any differently? What would Friedman ( Increase Profits ) and Allen ( Schizophrenic Conception ) advise the manager to do? If you were the manager of Starbucks ( Crossfire ) would you allow customers with open carry guns to frequent Starbucks? Use ethical methods and legal concepts to support your position. 3. Does outsourcing labour and production violate one s duty to stakeholders ( Swaminomics )? Who exactly are one s stakeholders? How would Applbaum ( Restricted Reasons & Permissible Violation ) judge these behaviours? READ LESS CORE LITERATURE Anti-Corruption: Building Business Advantage through Ethical Practices. Business Case for Anti-Corruption, RBI- Responsible Business Initiative Conference CORE CONCEPTS A. Waheed Karachi, September Responsible Business Framework (RBF) developed by the Responsible Business Initiative offers a flexible yet firm and practical internal point of reference for companies who wish to structure their anti-corruption programmes within a holistic ethical context. It is capable of seamlessly integrating d How corporate governance impacts corruption and financial bottom line in emerging markets, Triple Bottom Line Investing CORE CONCEPTS

5 Conference A. Waheed Frankfurt, November Working Paper: Corporate Responsibility and Anti-Corruption Transparency International Transparency International 2010 CORE CONCEPTS The greed and irresponsibility that were uncovered in the wake of the 2008 financial crisis illustrate the deep lack of understanding of the true meaning of corporate responsibility, its relationship to corporate governance, and how both can help to address corruption and encourage a holistic approa SEE MORE CORE LITERATURE LISTINGS ADDITIONAL LITERATURE Curem Pharmaceutical L. Zicklin 2004 A Note on Ethical Decision-Making A. Wicks Accessed:

6 A Note on Five Traditional Theories of Moral Reasoning A. Werhane Accessed: SEE MORE ADDITIONAL LITERATURE LISTINGS Download Module Add Resources