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CH 6] Business 101 6-17

compartmentalizes right acting, legal acting, moral acting and their constructs.
Because some act is legal it may not be moral or right. Truly successful business
people do right acts when acts that are legal may be wrong.

Ethicists endeavor to describe ethics in terms of man being the center of his Man chooses to disobey
universe, when he is not. They assert that ethics are situational and transitional; this the Law of Nature, the Law
of Right and Wrong.
leads to right actions only being whimsical and ignoring that there is ultimate
accountability. Know that Character and Integrity demand doing that which is right
even when no one is watching.

How Does a Manager Make Ethical Decisions?
Ethics teachers and consultants say that “making an ethical decision is not so much
a matter of knowing right from wrong as it is of knowing what pressures will be faced
in specific situations.” Now that is a real bit of nonsense. What this quote means is
anything is OK until you are caught. Remember the boy who got hung and bit his
mother’s ear off? He did get caught! Do you slow down on the Interstate when you
see a police car?
Employees and managers are more likely to make decisions they consider ethical
when they are aware of their values and their corporation’s values—which is a moral
sense. Many companies have set up workshops where employees can simulate their
responses to specific situations and determine what they can do to make more ethical
decisions. Moral values and corporate values come from the same source; they mean
the same thing and express the same outcomes.
J.C. Watts, Jr., Congressman from Oklahoma, made an important observation,
transition and conclusion......
“Is America on the wrong track?
When I was growing up in Eufaula, Oklahoma, everyone believed in family,
church and community. My father was a pastor, and he taught me to work hard,
play fair, make responsible choices, and even when you don’t, when you buy your
bed, you sleep in it.
Nowadays, the rules seem to have changed. Now it’s work as little as possible,
get someone else to take responsibility, and get the government to pay your way.
And look at the results.
Illegitimacy has become an epidemic, with disastrous consequences for 6
society, and for the children who have to grow up without a father.
Drugs and alcohol are ravaging families and communities. Crime holds
citizens in fear. People rely on the government instead of themselves, parents
abdicate responsibility for their children, and schools produce kids who know all The Concept of
about condoms and self-esteem but can hardly read. Popular culture gives us Reinsurance Business: A
violent films and degrading music.......” direct company may find
that it has placed itself
under liability to a very
Self-Regulation or Government Regulation? large number of policy-
The business community advances social responsibility by establishing codes of holders. It may consider
conduct and ensure that employees follow them. Trade associations, professional that it has undertaken
associations all encourage their memberships to abide by codes of conduct. One of the more than it can safely
best-known self-regulating agencies is the Better Business Bureau, a national carry. Therefore, the
organization with branches in most communities and regions. The bureau’s purpose is company, because of its
outstanding contractual
to assist consumers in mediating problems with specific firms, and engage in obligations, may desire to
community education about less reputable firms. The Bureau does not possess a protect itself. It may seek
strong enforcement arm, but it does keep records and will inform the public of those to lessen its burden by
firms that engage in questionable or deceptive practices. getting some other
These codes of conduct can be interpreted in a number of ways, but this does not company to assume a part
mean certain types of behavior cannot be regulated; the 8-hour workday and the of its liability in case of a
loss. The ORIGINAL OR
minimum wage are examples of regulated business behavior. Businesspeople PRIMITIVE OR DIRECT
generally prefer self-regulation to that imposed by the government. Conduct insurer may transfer or
guidelines established within an industry are generally more realistic than those cede the whole or part of a
established through government regulation. The drawback of self-regulatory programs risk to another company.
is that they are difficult to enforce. But when compared to government intrusion self- The first insurer or ceder in
turn enters into a
regulation is less expensive, and probably a prerequisite for corporate survival. contractual relation with
Consider the case of Beech-Nut Corporation. When Beech-Nut was under pressure the second company which
to increase profits, and decided to cut costs in its product production, it decided to is called the REINSURER.

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