Business Ethics: What Everyone Needs to Know

Cover
BUSINESS ETHICS
Copyright
CONTENTS
Epigraph
PREFACE
1 An Overview of Business Ethics
What are business ethics?
What do ethics have to do with making money?
How are business ethics different from general ethics?
What does it mean to have an ethical duty?
What types of fiduciary duties exist?
To whom (or what) can businesspeople owe ethical duties?
Why should I care about business ethics?
2 The Benefits of Acting Ethically
Being ethical sounds like hard work. What is the upside?
Won’t I be at a competitive disadvantage if I always act ethically?
What are the material advantages of ethical action for individuals?
What are the physical and psychological advantages of acting ethically for individuals?
What if being ethical means that I make less money—​won’t that make me unhappy?
What can I do to increase the chances that my ethical behavior will be rewarded?
How do organizations benefit when their employees and executives act ethically?
How can organizations increase the chances that their ethical behavior will be rewarded?
How do societies benefit when individuals and organizations act ethically?
3 Moral Philosophical Bases for Business Ethics
What are the major schools of philosophical ethical thought?
What are the strengths and limits of virtue ethics, such as in Aristotle’s writings?
What are the strengths and limits of ethics-​of-​care rationales such as communitarianism?
What are the strengths and limits of cost–​benefit rationales such as utilitarianism?
What are the strengths and limits of rights-​and-​duties rationales, such as Kant’s categorical imperative?
What are the strengths and limits of distributive-​justice rationales, such as Rawls’s principles?
Where do the Golden Rule and other common maxims fit in?
4 What Does Science Tell Us About Ethical Behavior?
Are people innately ethical?
How do people develop the capacity to be ethical?
What sorts of pressures drive otherwise-​ethical people to do unethical things?
What sorts of social environments encourage ethical or unethical behavior?
Why does “tone at the top” matter so much?
How do ethical and unethical individuals influence others?
How do incentive plans encourage ethical or unethical behavior?
What does where you work say about you?
5 Legal Foundations of Business Ethics
What is the relationship between law and business ethics?
What does it mean to owe a legal duty to a partner or other natural person?
What does it mean to owe a legal duty to a corporation or other “legal person”?
When do I have a duty of obedience?
What does the duty of loyalty mean?
When do I have a duty of good faith?
When do I have a duty of care?
What are duties of confidentiality?
When do I have a duty not to lie?
What are disclosure duties?
Why should businesspeople act more ethically than the law requires? Isn’t the law enough?
6 Understanding Corporations, LLCs, and Other “Legal Persons”
What is a corporation, LLC, or other “legal person”?
What is the purpose of a corporation?
What is the role of the board of directors?
What are the roles of corporate officers and other employees?
What is the relationship between the corporation and its shareholders?
What can a controlling shareholder do?
What is the business judgment rule and why does it matter?
What kinds of conflicts of interests are common in corporations and how can they be addressed?
What special rules apply to corporations?
How can laws be enforced against a “legal person”?
7 The Corporation as an Ethical “Person” in Modern Society
What role should corporations play in modern society?
Are corporate managers required to maximize shareholder value?
What is corporate social responsibility (CSR)?
Who are the stakeholders in a corporation?
Why should corporations act in economic, socially, and environmentally sustainable ways?
How should a corporation account for external costs?
Why should a corporation want its actions to be transparent?
How do sustainability, accountability, and transparency work together in CSR?
What authorities have adopted CSR principles, and how are corporations accountable for CSR?
8 The Costs of Acting Unethically
What are the legal consequences to individuals for unethical business behavior?
What are the reputational penalties to individuals for unethical behavior?
What are the other consequences to individuals for unethical behavior?
What are the legal consequences to organizations for unethical behavior?
What are the reputational penalties to organizations for unethical behavior?
What if I think that I won’t be caught?
9 Major Ethical Traps in Modern Business
What are some of the most common unethical business behaviors?
What patterns do common unethical business behaviors take?
How are most unethical behaviors caught?
What is the ethical slide?
When are you crossing the line into your own ethical slide?
How can I handle peer pressure and negative reaction to halting my ethical slide?
How do I speak up when I need to challenge unethical behavior?
10 Special Issues of Ethics in Leadership
Do managers behave less ethically than other employees?
What is the dark triad?
What is the effect of pressure to produce results as a manager?
How do we deceive ourselves under pressure?
How do ill-​conceived goals, motivated blindness, and indirect blindness affect managers under pressure?
What are the psychological effects of being in a management position itself?
What are the consequences of retaining unethical managers in an organization?
How can the difference in power between managers and subordinates affect the decisions that businesspeople make?
How does business culture affect what ethical decisions businesspeople make?
What can employees do to promote ethical environments without leadership support?
11 Negotiations
Why are there special ethical issues in negotiations?
What is fraud in negotiations?
When is it permissible to lie?
When is it permissible to stay silent?
What special responsibilities flow from power imbalances in negotiations?
What are some special ethical issues in negotiating for someone else, such as a business?
What are some special ethical issues in negotiating for a job?
What are some special ethical issues in negotiating solely for price?
How important are personal relationships in negotiations?
12 Specific Liability Questions and Whistleblowing Options
How should businesses report ethical violations?
How should employees report ethical violations?
What are some sources of rules, and who are the enforcement entities?
What are some strategies for employee reporting?
What are my options if reporting within my organization does not work?
What are my options when I report to authorities?
To what benefits am I entitled as a whistleblower?
What protections will I have as a whistleblower?
What else should I know about being a whistleblower?
13 How to Institute Best Practices
Why do business leaders need to create and promote ethical environments?
What does an appropriate compliance and ethics program look like?
What guidance has the DOJ given regarding its interpretation of the Organizational Sentencing Guidelines?
Fundamental question one: Is the corporation’s compliance program well designed?
Fundamental question two: Is the program being applied earnestly and in good faith?
Fundamental question three: Does the corporation’s compliance program work in practice?
What is the value of the DOJ’s approach?
What are other principles and practices to create high-​quality compliance and ethics programs?
How does a company set realistic goals for its compliance and ethics program?
How should companies use structural behavioral incentives such as nudges?
What should an effective code of conduct or ethics include?
What other elements should a comprehensive compliance and ethics program contain?
What are the practices of the most effective compliance and ethics programs?
Why does institutionalizing ethical practices matter?
14 Designing an Ethical Culture
Why does creating a “speak-​up culture” matter?
What can be done to better create and reinforce a “speak up culture”?
Why does it matter to prevent retaliation against employees who report, and what are some ways to do this?
What are the consequences of not addressing internal reports appropriately, and preventing retaliation?
What are some specific, helpful ways to reduce retaliation within organizations?
What are some problems that larger companies and supply-​side companies face?
Problem one: What ethical challenges do large corporations face when their leaders are removed from front-​line employees?
Problem two: What ethical challenges arise from high-​level employees’ opportunity and capability to commit fraud?
Problem three: What ethical challenges do supply-​side companies face?
What are some ideas for these organizations and others in crisis?
What are some of the best compliance and ethics programs in businesses today?
What are the lessons that businesses and individuals should learn from our discussion of compliance and ethics?
15 How to Respond to Investigations and Protect Your Reputation
How much benefit is there to the company from having a compliance and ethics program in place before an investigation?
Understanding the narrative: Why does a prosecution’s “theory of the case” matter?
What does cooperating with a prosecution mean for a business?
How, in brief, do businesses conduct internal investigations?
What does cooperating with the prosecution mean for an employee?
What are the steps of a prosecution?
What happens to corporations and individuals who don’t resolve allegations and investigations before trial?
What lessons should businesses and individuals take away from this closing chapter and this book in general?
APPENDIX: ADDITIONAL RESOURCES AND PEOPLE YOU CAN REACH OUT TO
NOTES
INDEX