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• Cover Page
• Half Title Page
• Title Page
• Copyright Page
• Contents
• List of cases and ethical dilemmas
• List of figures and tables
• Acknowledgements
• Introduction
• Why study business ethics?
• What the book is about
• Who the book is for
• What the book will enable readers to do
• The approach to learning
• Background to the book
• Notes
• Part One Business ethics — principles
• 1 Business ethics affect everyone
• Learning outcomes
• Ethical issues arise throughout the business world
• Defining morality and ethics
• Ethics are imbedded in and reflect cultures
• The relationship between law and ethics
• Philosophical theories provide a context
• Business ethics involve choices
• A stakeholder view of business ethics
• Corporate governance and risk management involve ethics
• Why do people behave the way they do?6
• The importance of trust in business
• Cases
• Case 1.1 The employment of children in developing countries
• Case 1.2 Pharmaceutical companies and generic drugs for poor countries
• Case 1.3 The corporate culture at Goldman Sachs
• Case 1.4 Enron
• Notes
• Further reading
• Useful websites
• Projects and exercises
• Self-test questions
• 2 The evolution of business ethics
• Learning outcomes
• Business has always needed sound ethics
• Business ethics and ancient traders
• Business ethics in the 19th century
• Scandals and collapses in the 20th century
• The 21st century turned the spotlight onto business ethics
• Ethical failures and the response of business
• Cases
• Case 2.1 Fraud at Gray’s Building Society
• Case 2.2 Insider dealing at Drexel Burnham Lambert
• Case 2.3 Ivan Boesky and the case of Guinness
• Case 2.4 Robert Maxwell and his media empire
• Noted
• Further reading
• Useful websites
• Projects and exercises
• Self-test questions
• 3 On corporate social responsibility
• Learning outcomes
• Do companies have social responsibilities?
• Balancing responsibilities between shareholders and stakeholders
• Pros and cons of corporate social responsibility
• The stakeholder perspective
• The ethical perspective
• The societal perspective
• The political perspective
• The enlightened shareholder value (ESV) perspective
• The philanthropic perspective
• Approaches to corporate social responsibility
• The practice of corporate social responsibility
• On sustainable development, the United Nations Global Compact and GRI
• Corporate vision, mission and values
• Cases
• Case 3.1 Mikhail Khodorkovsky and the Yukos case
• Case 3.2 The disaster at BP Deepwater Horizon
• Case 3.3 Royal Bank of Scotland’s IT systems breakdown
• Case 3.4 Tokyo Electric Power and the disaster at Fukushima Daiichi
• Notes
• Further reading
• Useful websites
• Projects and exercises
• Self-test questions
• 4 Business ethics and corporate governance
• Learning outcomes
• What is corporate governance?
• Board structures
• Board functions
• Corporate vision, mission, values, and strategy formulation
• Policy making
• Executive monitoring and supervision
• Accountability, ensuring compliance and transparency
• The regulation of corporate governance
• Some theoretical insights — agency, stewardship and stakeholder ideas
• Stewardship theory
• Agency theory
• Stakeholder ideas
• The roles of the board chairman and chief executive officer
• The role of the auditors, regulators and company secretary
• Changing expectations in the governance of organizations
• Cases
• ase 4.1 Google harvests private data from Street View scan
• Case 4.2 The Tyco case
• Case 4.3 The case of Lord Black
• Case 4.4 Toyota’s corporate governance failings
• Toyota and its problems
• Appendix To Chapter 4
• Additional information on corporate regulation
• New York Stock Exchange listing rules
• King 1 Report (1994)
• King 2 Report (2002)
• UK Corporate Governance Code (2010)
• Notes
• Further reading
• Useful websites
• Projects and exercises
• Self-test questions
• 5 Business ethics and enterprise risk
• Learning outcomes
• A new emphasis on corporate risk
• Levels of risk — strategic, managerial and operational
• The concept of ethical risk
• The significance of strategic ethical risk
• Moral hazards in business ethics
• The concept of enterprise risk management
• Managing risk throughout the organization
• Risk recognition
• Risk assessment
• Risk evaluation
• Determining risk strategy and policies
• Risk monitoring and reporting
• Developments in ERM
• The COSO integrated framework for ERM
• The Organization for Economic Co-operation and Development (OECD)9
• The UK Corporate Governance code (2010)
• The International Corporate Governance Network (ICGN)11
• Case
• Case 5.1 The Northern Rock Bank
• Case 5.2 Network Rail
• Case 5.3 The collapse of HBOS bank
• Case 5.4 The collapse of the Andersen partnership
• Notes
• References and further reading
• Useful websites
• Projects and exercises
• Self-test questions
• Part Two Business ethics — practice
• 6 Creating a sound ethics culture
• Learning outcomes
• Different approaches to ethics management
• The compliance approach to business ethics
• The risk-reduction approach
• The satisfying-stakeholders approach
• Creating a values-orientated culture
• What makes a business decision ethical?
• Who could be affected by this decision?
• Aspects of business ethics can arise when least expected
• What effects might this decision have on others?
• What might others think about the ethics of this decision?
• What makes people act the way they do?
• Age
• Gender
• Education
• Employment experience
• Personal values and integrity
• Context-related factors
• National cultural characteristics
• Corporate cultural characteristics
• Reward systems
• Authority structure and bureaucracy
• Work roles
• Establishing an ethics culture
• Essentials for a successful ethics policy
• The vital importance of business leadership
• Ethics and stakeholder relations
• Antagonistic or collaborative relations with stakeholders
• Ethical codes for different organizations
• Corporate codes of ethics
• Codes of ethics for professional bodies
• Industry-wide codes of ethics
• Codes of ethics for groups
• Drafting an ethics code
• The management of business ethics
• On whistle-blowing and whistle-blowers
• Cases
• Case 6.1 Conflicts of interest at Her Majesty’s Revenue and Customs
• Case 6.2 Board failings at Olympus Japan
• Case 6.3 Should Terry be a whistle-blower?
• Case 6.4 US company considers an acquisition in Brazil
• Notes
• Further reading
• Useful websites
• Projects and exercises
• Self-test questions
• 7 Uniting business ethics, governance and risk
• Learning outcomes
• The 21st century’s emphasis on business ethics, governance and risk
• Uniting business ethics, corporate governance and risk management
• Creating a corporate vision and mission
• Building core corporate values
• Codes of business ethics
• Rolls-Royce Global Code of Business Ethics
• TOTAL South Africa code of ethics
• Wells Fargo code of ethics and business conduct
• Preventing bribery and corruption
• The US Foreign Corrupt Practices Act (1977)14
• The OECD Anti-Bribery Convention (1997)
• Hong Kong Prevention of Bribery Ordinance (1997)17
• The UN Convention against Corruption (2004)18
• China’s bribery blacklist (2009)
• UK Bribery Act (2010)19
• Other anti-bribery and corruption initiatives
• Cases
• Case 7.1 Shell Oil, the Nigerian authorities and the Ogoni people
• Case 7.2 Lehman Brothers Inc
• Case 7.3 Questionable behavior at News International
• Case 7.4 Alleged vote-rigging at Pacific Century Cyber Work, Hong Kong
• Notes
• Further reading
• Useful websites
• Projects and exercises
• Self-test questions
• 8 Business ethics in finance
• Learning outcomes
• What is involved in business finance
• Ethics in financial strategy
• Leverage/gearing strategies
• Anti-predator strategies
• Share price protection strategies
• Tax avoidance strategies
• Ethical relationships with investors in public companies
• Present reality — the separation of ownership from control
• Insider dealing and trading
• Ethical investment and ethical funds
• The UN Principles for Responsible Investment
• Money laundering, combating global crime and terrorism
• Ethical relationships with shareholders in non-listed companies
• Ethical issues in groups of companies
• Ethical issues in government-controlled companies
• Ethics in family firms
• The management of shareholder relations
• Ethical relationships with non-equity sources of finance
• Ethical challenges for independent outside auditors
• Close relationships with clients affecting independence
• Cross-selling consulting services
• The market domination of the ‘big four’
• Auditing failing companies
• Is accountancy a profession or a business?
• Ethical relationships with regulators
• Ethics and credit-rating agencies
• Ethics in financial management
• Ethics in financial operations
• Cases
• Case 8.1 Bankers criticized in Farepak collapse
• Case 8.2 Spoofing at Swift Trade
• Case 8.3 JPMorgan Chase and the Voldemort black hole
• Notes
• Further reading
• Useful websites
• Projects and exercises
• Self-test questions
• 9 Ethics in business operations
• Learning outcomes
• Ethical issues in procurement
• Suppliers as stakeholders
• Ethical issues with suppliers
• Ethical sourcing, fair trade and sustainable consumption
• Ethical aspects of business operations and information technology
• Ethics in product technology
• Ethics in research and development
• Ethics in manufacturing technology
• Ethics in information technology
• Ethical issues in marketing and market research
• Customers and consumers as stakeholders
• Consumer activism
• From caveat emptor to consumer protection
• Ethical issues in market communications
• Misleading and false descriptions
• Ethical issues in advertising
• Ethical issues in pricing
• Customer boycotts
• Ethical issues in market research
• Individuals‘ right to privacy
• Coping with international sanctions
• Competitors as stakeholders
• Industrial espionage
• Negative advertising
• Anti-competitive behavior
• Ethical challenges of the global market
• On bribery and corruption around the world
• Cases
• Case 9.1 The loss of a Nimrod aircraft-the ethical culture at BAE systems
• Case 9.2 Should Jean-Paul accept his friend’s proposal?
• Case 9.3 HP and the Autonomy acquisition
• Case 9.4 Food safety in Taiwan
• Notes
• Further reading
• Useful websites
• Projects and exercises
• Self-test questions
• 10 Business ethics and employees
• Learning outcomes
• Employees as stakeholders
• Contract and commitment in the employee relationship
• Risks in the employer-employee relationship
• Employers’ relations with employees
• Employees’ relations with employers
• Employees’ duty to employer — legal and moral
• Senior management and directors’ remuneration
• Employment and human rights
• The right to work
• National cultures and moral values
• Cases
• Case 10.1 Foxconn and Apple13
• Case 10.2 Drug testing of employees
• Case 10.3 Employee rights to privacy
• Case 10.4 Construction company faces competition and corruption
• Notes
• Further reading
• Useful websites
• Projects and exercises
• Self-test questions
• 11 Business ethics, society and the state
• Learning outcomes
• What we mean by society
• Societal organizations as stakeholders in business
• Co-operative partnerships between companies and societal stakeholders
• Ethical issues in relations between business and society
• Identifying societal stakeholders and their interests
• Societal stakeholders’ tactics — indirect and direct action
• The state as a business stakeholder
• Government representing society’s interests
• Government as regulator of business
• Government as facilitator of business
• Government as player on the business stage
• Ethical issues in government — business relations
• Legitimacy, accountability, and influence
• Lobbying and pressure groups to influence government action
• Business staff advising government on policy or regulation
• Financing political parties and candidates to obtain their support
• Privatization and deregulation
• Globalization and business-government relations
• The power of multinational corporations
• The influence of meta-state organizations
• Cases
• Cases 11.1 When Kraft acquires Cadbury promises melt
• Case 11.2 Waste Management — the crown jewel for Andersen
• Case 11.3 Southern Cross Healthcare Group
• Case 11.4 Chiquita goes bananas
• Notes
• Further reading
• Useful websites
• Projects and exercises
• Self-test questions
• 12 The future of business ethics
• The essence of business ethics
• Business ethics provide the bedrock on which sound business practices are built
• Business ethics are concerned with relationships with the stakeholders of a business
• Business ethics apply to every organizational level
• Business ethics lie at the heart of corporate governance
• Business ethics usually call for the balancing of risk
• Every organization develops an ethics culture
• Corporate social responsibility has (CSR) become an essential element of business ethics
• Environmental protection and sustainability have become goals in business ethics
• Globalization is amplifying challenges in business ethics
• Why business ethics have become so important
• The power of business oligarchies
• Frontier issues in business ethics
• Gender diversity
• Excessive executive remuneration
• Aggressive tax avoidance
• The role and responsibilities of auditors8
• Penalties for ethical failure
• Stakeholders’ short-term or long-term interests
• Rethinking the role of business in society
• Limited liability — a privilege not a right
• Some final thoughts
• Personal values in business ethics
• The need for a new paradigm for the corporation
• Cases
• Case 12.1 Aggressive tax avoidance
• Case 12.2 Barclays Bank and the LIBOR rate-rigging scandal
• Case 12.3 GOME retail challenges in China
• Case 12.4 Quotas for women directors
• Notes
• Further reading
• Useful websites
• Projects and exercises
• Self-test questions
• Answers to self-examination questions
• Chapter 1
• Chapter 2
• Chapter 3
• Chapter 4
• Chapter 5
• Chapter 6
• Chapter 7
• Chapter 8
• Chapter 9
• Chapter 10
• Chapter 11
• Chapter 12
• Index