5-6 Ethical Origins o Professional ethics: values and standards used by groups of managers in the workplace. applied when decisions are not clear-cut ethically Example: physicians and lawyers have professional associations that enforce these Individual ethics values of an individual resulting from their family upbringing If behavior is not illegal, people will often disagree on if it is ethical Ethics of top managers set the tone for firms " win/MeGraw-HHill CThe McGraw-Hill Companies, Inc, 2000
Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000 5-6 Ethical Origins ⚫Professional ethics: values and standards used by groups of managers in the workplace. ◼ Applied when decisions are not clear-cut ethically. ◼ Example: physicians and lawyers have professional associations that enforce these. ⚫Individual ethics: values of an individual resulting from their family& upbringing. ◼ If behavior is not illegal, people will often disagree on if it is ethical. ◼ Ethics of top managers set the tone for firms
5-7 Ethical decisions oa key ethical issue is how to disperse harm and benefits among stakeholders. receive the profits? Employees, managers and hould If a firm is very profitable for two years, who stockholders all want a share Should we keep the cash for future slowdowns? What is the ethical decision? o What about the reverse. when firms must layoff workers. o Final point: stockholders are the legal owners of the firm! Irwin/McGraw-Hill CThe McGraw-Hill Companies, Inc, 2000
Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000 5-7 Ethical Decisions ⚫A key ethical issue is how to disperse harm and benefits among stakeholders. ◼ If a firm is very profitable for two years, who should receive the profits? Employees, managers and stockholders all want a share. ◼ Should we keep the cash for future slowdowns? What is the ethical decision? ⚫What about the reverse, when firms must layoff workers. ⚫Final point: stockholders are the legal owners of the firm!
5-8 Ethical decisions Some other issues managers must consider Should you hold payment to suppliers as long as possible to benefit your firm? This will harm your supplier who is a stakeholder Should you pay severance pay to laid off workers? o This may decrease the stockholder's return Should you buy goods from overseas firms that hire children? o If you don t the children might not earn enough money to eat " win/MeGraw-HHill CThe McGraw-Hill Companies, Inc, 2000
Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000 5-8 Ethical Decisions ⚫Some other issues managers must consider. ◼ Should you hold payment to suppliers as long as possible to benefit your firm? ◆ This will harm your supplier who is a stakeholder. ◼ Should you pay severance pay to laid off workers? ◆ This may decrease the stockholder's return. ◼ Should you buy goods from overseas firms that hire children? ◆ If you don’t the children might not earn enough money to eat