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Week 2 Notes

by: Mrinalini Vijalapuran

Week 2 Notes LEB 320F

Mrinalini Vijalapuran

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About this Document

This is notes for week 2 in LEB 320F (Brad Gold), Spring 2016
Foundations of Business Law & Ethics
Bradley Gold
Class Notes
Law, business law, LEB 320F, UT Austin
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This 6 page Class Notes was uploaded by Mrinalini Vijalapuran on Tuesday February 2, 2016. The Class Notes belongs to LEB 320F at University of Texas at Austin taught by Bradley Gold in Summer 2015. Since its upload, it has received 43 views. For similar materials see Foundations of Business Law & Ethics in Business at University of Texas at Austin.


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Date Created: 02/02/16
Week 2: Class 2 1/26/2016  Why do we not have strict black and white rules about ethics? o Infinite variety of possible situations. o That’s why process of identifying and approaching ethical issues is so important.  Why go over ethics first? o If you develop a pretty good sense of what’s ethical and what isn’t, going to have a pretty  good sense of what is legal.  Moral Minimum o 4 elements of moral minimum:  1. Honesty: assume this is a given, but often not in business.  2. Loyalty: who do you expect loyalty from?  Is loyalty more important than making money sometimes? Rather work  with someone you know than someone random that offers more money.  3. Keeping commitments: seems simple as a basic concept, but can become  exceedingly difficult in the business work (over­commitment or failure to commit  in the first place).  A lot of time, people just keep commitments when convenient ­ not a  good way to do business.  Not always easy to keep commitments.  If you get into a situation where you made a commitment you can’t keep,  be honest about it ­ might lose that piece of business, but in terms of  long­term relationship, client will know you are an ethical and honest  person.  4. Doing no harm: much easier said than done.  Virtually impossible to do no harm to this world, ourselves, or others.  Instead, try to be aware of how you can do harm and try to minimize the   damage.  What is the process to actually identify and analyze an ethical situation? o Simply identify the issue and define it as narrowly as possible. o Identify which rules apply to the ethical dilemma.  Where do we get these rules from? ­ moral minimum, the law, professional set of  rules that any given professional may have (i.e. lawyers have their own code of  conduct in different states, doctors, accountants, etc.). o Make sure we have accurate and reliable information.  This is where analytical skills are going to be crucial.  Don’t want to ask too many questions because might not have a job left to  analyze.  If even working at company where you ask questions and being  stonewalled or feel you could get fired for asking questions, don’t ask  them...find a new job so you can quit the current, ethically questionable,  job. o Apply these ethics principles and the rules at hand to the facts of your situation.  Try to minimize conflicts and prioritize the duties owed to variety of parties.  Moral relativism: o Certain situations call for different moral standards ­ it could be different from age to age,  gender to gender, etc.  Moral pluralism: o Trying to find the common ground, what is an appropriate sense of ethics to make daily  decisions. ­ Notes 2  Moral Minimum o There are no black and white rules. o What we think is right and wrong is a precursor to the law.  Four Elements of Moral Minimum o 1. Honesty  Transparency  Having integrity and being straightforward.  Lehman Bros. EX: dishonest broker and company disappeared and many  companies lost a lot of money in 401K investments. o 2. Loyalty  Caring o 3. Keeping commitments.  Do what you tell people you are going to do.  Can become difficult; overcommitting and failing to make a commitment  in the first place.  Don’t be shortsighted. o 4. Doing no harm.  Virtually impossible.  Strive to minimize harm.  Degree and probability (pg 957).  A careful evaluation of harm will take into account both degree and  probability.   Other factors being equal, the relative importance of a moral  obligation increases proportionately with increases in   (1) the degree of harm (e.g., injury to people is more  harmful than injury to property, risk of death is more  serious than risk of injury) that is likely to be caused by  violating the obligation and   (2) the probability (or likelihood) that the harm actually  will occur.   4 Steps to Identifying and Analyzing Ethical Implications o 1. Identifying the issue.  Define it as narrowly as possible.  What does this boil down to, what is REALLY the problem?  o 2. Identifying which rules actually apply to my problem.  Moral minimum.  General laws.  Professional set of rules that any given professional may have.  Codes and ethics for doctors/lawyers/accountants. o 3. Making sure we have accurate and reliable information. o 4. Applying these ethical principles/rules to your situation.  Minimize conflicts.  Organize duties/obligations.  Moral Relativism (pg 958): it’s not just that any individual may have  different ethical standards ­ we all have our different senses of ethics ­  relative/comparative sense of ethics ­ focusing on differences.  Moral Pluralism: finding common ground of appropriate sense of ethics. Week 2: Class 3 1/28/2016  Jack Abramoff Video (watch it!) o Had 2 different sets of ethics and morals for when he was at home and for when he was  at work ­ problematic. o Very charitable in personal life, and then goes to work and clearly has very different set of ethics that he follows. o Surprising/difficult: apparently it's okay to give lobbyist 4 tickets to clients but not 50  tickets and a jet ­ almost impossible to come up with a rational argument to say where  that line is.  Biggest problem with Ethics (according to Professor Gold) o Textbook states most people want to do the right thing most of the time. o Accountability: the law, your peers, bosses, teachers, friends, family, etc. o Problem ­ we don’t even think there is an issue.  Why don’t we see the ethical issue sometimes?  Educated, successful, long­time experience, etc.  Size of bank account, years in profession, school you went to, don’t  necessarily mean you can identify an ethical issue.  Types of Ethical Failings o Fundamental Attribution Error  Rationalize our own actions.  Difference between attributing somebody’s behavior to facts and circumstances  vs. attributing their behavior to who they actually are.  Outer perspective vs. Inner perspective.  Look at things through other’s perspective as well as your own to get a more  complete understanding of things. o Obedience to Authority  Idea of just following orders.  Can be a really strong ethical issue.  I.e. working for a parent. o Conformity Bias  Tendency to behave similarly to others in a group, even if it goes against your  own judgment.  Everyone else is doing it, so must be okay if I do it too.  Could be laziness ­ don’t want/care to pay attention to ethics.  Problem: can come in a lot of different forms:  Organizational culture, market culture (i.e. everyone shows up at 10 am  and starts drinking at 4, so begin to think that’s normal).  More passive than groupthink. o Groupthink  Identification process of what the majority wants to do and then active process of  getting people who disagree on board with the rest of the majority (i.e. jury that  needs to reach a unanimous decision).  More active than conformity bias. o False Consensus  Overestimate the extent to which others share the same ethics as you.  Can’t assume that someone is as nice and as honest and as ethical as you think  ­ need to ask some questions to verify this.  Can’t blindly assume based on personal views or experiences.


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