{"id":7843,"date":"2016-10-12T18:27:35","date_gmt":"2016-10-12T18:27:35","guid":{"rendered":"https:\/\/courses.lumenlearning.com\/masterybusiness2xngcxmasterspring2016\/?post_type=chapter&#038;p=7843"},"modified":"2019-01-05T01:41:32","modified_gmt":"2019-01-05T01:41:32","slug":"reading-ethical-and-legal-behavior","status":"publish","type":"chapter","link":"https:\/\/courses.lumenlearning.com\/wmintrobusiness\/chapter\/reading-ethical-and-legal-behavior\/","title":{"raw":"Reading: Ethical and Legal Behavior","rendered":"Reading: Ethical and Legal Behavior"},"content":{"raw":"<a href=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/143\/2016\/12\/09200849\/12497830655_4ada8f23bd_k.jpg\"><img class=\"aligncenter wp-image-8953\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/143\/2016\/12\/09200849\/12497830655_4ada8f23bd_k-300x200.jpg\" alt=\"A cook pokes his head out out of a doorway for a smoke break.\" width=\"600\" height=\"400\" \/><\/a>\r\n<h2>To Hire or Not to Hire Smokers\u2014That Is the Question at American Express<\/h2>\r\n<span style=\"color: #333333;\">American Express, a financial services company, found that smokers were costing the company $5,000\u2013$6,000 more per year than nonsmokers. With medical costs rising 10 percent\u201315 percent per year, the board of directors wants to discuss whether the company should refuse to hire smokers.<\/span>\r\n\r\n<span style=\"color: #333333;\">Nationwide, about 6,000 companies refuse to hire smokers. Costs are driving the trend not to hire smokers. According to the CDC, a smoker will have 50 percent higher absenteeism and, when present, will work 39 fewer minutes per day because of smoke breaks, which leads to 1,817 lost hours of annual productivity. A smoker will have higher accident rates, cause $1,000 a year in property damage (from cigarette burns and smoke damage), and will cost up to $5,000 more a year for annual insurance premiums.<\/span>\r\n\r\n<span style=\"color: #333333;\">Few people would fault a company for trying to control costs and maintain a productive workforce, but the question is how far should a company go in pursuit of these goals? Law professor Don Garner believes that \u201cIf someone has the ability to do the job, he should get it. What you do in your home is your own business.\u201d Others say such policies set a dangerous precedent. \u201cThese things are extremely intrusive,\u201d said George Koodray, assistant U.S. director of the Citizens Freedom Alliance. If companies begin by discriminating against smokers, they might\u00a0next discriminate against people who are overweight in order to cut costs.\u00a0<\/span>\r\n\r\n<span style=\"color: #333333;\">As a manager, you have a hard decision regarding such a policy because your choice\u00a0has implications beyond hiring decisions.\u00a0<\/span>\r\n<ul>\r\n \t<li><span style=\"color: #333333;\">On what basis should the company decide whether or not\u00a0to hire smokers: the best interest of the firm, what the law allows, or individual rights?<\/span><\/li>\r\n \t<li><span style=\"color: #333333;\">As a manager\u00a0you have to\u00a0consider both ethics and\u00a0social responsibility. Ethical decision making is concerned with doing right and avoiding wrong. Social responsibility is a broader goal to pursue policies that benefit society.\u00a0Should you protect an individual's right to smoke if it places a burden on society? \u00a0Is it ethical to promote society's rights if it infringes on the rights of the individual?\u00a0<\/span><\/li>\r\n \t<li><span style=\"color: #333333;\">The board is\u00a0charged with increasing shareholder wealth,\u00a0so they particularly want a decision that's in the best interest of the company's financial health. Do you promote shareholders interests over those of the individual or society?\u00a0<\/span><\/li>\r\n<\/ul>\r\n<span style=\"color: #333333;\"><em>If you were in charge at American Express, what would you do?<\/em><\/span>\r\n\r\n<span style=\"color: #333333;\">This scenario enables\u00a0us to explore fundamental questions about the nature of ethical and legal behavior in business.\u00a0 It also highlights the tension between our ideals\u00a0and how they play out in the real world. Sometimes, acting in ways that are ethical and legal are one and the same thing. Other times, they are not.<\/span>\r\n<h2>Ethical Behavior<\/h2>\r\n<span style=\"color: #333333;\"><strong>Ethics<\/strong> are a set of standards that govern the conduct of a person, especially a member of a profession. \u00a0While ethical beliefs are held by individuals, they can also be reflected in the values, practices, and policies that shape the choices made by decision makers on behalf of their organizations[footnote]Source: Boundless. \u201cDefining Ethics.\u201d Boundless Management. Boundless, 20 Sep. 2016. Retrieved 01 Dec. 2016 from https:\/\/www.boundless.com\/management\/textbooks\/boundless-management-textbook\/ethics-in-business-13\/ethics-an-overview-95\/defining-ethics-446-8310\/[\/footnote]. Professions and organizations regularly establish a \"Code of Ethics\" that serves to guide the behavior of members of the profession or organization.\u00a0In the medical profession, for instance, doctors take an ethical oath to \u201cdo no harm.\u201d The American Society of Mechanical Engineers\u2019 code states, \u201cEngineers shall hold paramount the safety, health, and welfare of the public in the performance of their professional duties.\u201d \u00a0\u00a0<\/span>\r\n<h2>Legal Behavior<\/h2>\r\n<span style=\"color: #333333;\"><strong>Legal behavior<\/strong> follows the dictates of laws, which are written down and interpreted by the courts. In decision making, determining the legality of a course of action is facilitated by the existence of statutes, regulations, and codes. \u00a0Unlike ethical considerations, there are established penalties for behaving in a way that conflicts with\u00a0the law.\u00a0However, as society evolves, what constitutes\u00a0legal behavior also changes. For example, until recently, the possession or use of marijuana was illegal in the State of Colorado. As a result of the\u00a0legislation that legalized marijuana, existing laws will need\u00a0to be reinterpreted, and undoubtedly additional laws will be enacted to govern what was formerly illegal behavior. Whether or not an individual thinks it is\u00a0 ethical to use\u00a0a potentially harmful substance, the fact is that the law now allows such behavior.\u00a0<\/span>\r\n\r\n<span style=\"color: #333333;\">Using these as working definitions, let\u2019s return to\u00a0American Express.<\/span>\r\n<h2>Ethical Considerations<\/h2>\r\nIf the company decides not\u00a0to hire\u00a0smokers, then the company would essentially be interfering with the individual\u2019s right to engage in a legal activity. If the company dictates to employees about smoking, what else can they decide for employees? The National Institute for Health reports that the aggregate national cost of overweight and obesity combined was $113.9 billion. Does the company set Body Mass Index (BMI) limits for potential employees to reduce the cost of medical coverage for obesity-related illness? As you can see, such decisions are complex\u2014and, some would say, a slippery slope.\r\n<h2>Legal Considerations<\/h2>\r\n<span style=\"color: #333333;\">Would American Express's decision not to hire smokers constitute lifestyle discrimination? A company can require that employees not smoke during their shift or anywhere on company premises, but does it have the right to require them\u00a0not to smoke when <em>not<\/em> at work or <em>not<\/em> on company property? According to the ACLU, it can become lifestyle discrimination if the company requires that employees not smoke when they\u2019re not at work, off duty, and\/or off work premises. In fact, smokers are protected from employment-based discrimination in at least two dozen states.\u00a0[footnote]Mirabella, L. (2014). In Maryland, smoking could cost you job. Retrieved October 12, 2016, from http:\/\/www.baltimoresun.com\/business\/bs-bz-no-smoking-hiring-policy-20140705-story.html[\/footnote]. More than half of the states in the U.S. protect employees against employers who impose certain lifestyle requirements, such as only hiring non-smokers or refusing to hire individuals who are obese or have high cholesterol. Clearly American Express is dealing with a legal issue when considering the non-smoker policy, but as with the ethical issue, it's not cut and dried. \u00a0<\/span>\r\n\r\n<span style=\"color: #333333;\"><em>If you were in charge at American Express, what would you do?<\/em><\/span>\r\n\r\n<span style=\"color: #333333;\">As this example\u00a0shows, people take positions and make\u00a0choices within\u00a0different frameworks, and those frameworks, while overlapping, are not always perfectly aligned. The legal framework establishes laws that govern\u00a0behavior\u00a0while the ethical framework contains sets of standards and rules governing the\u00a0behavior of individuals within groups or professions.<\/span>\r\n\r\nAs you will see in the rest of this module, when\u00a0businesses try to \u201cdo the right\u201d thing\u2014by the law, by their shareholders, by their employees, by their customers, and other stakeholders\u2014there is often a complex interplay of ethical and legal considerations.","rendered":"<p><a href=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/143\/2016\/12\/09200849\/12497830655_4ada8f23bd_k.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-8953\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/143\/2016\/12\/09200849\/12497830655_4ada8f23bd_k-300x200.jpg\" alt=\"A cook pokes his head out out of a doorway for a smoke break.\" width=\"600\" height=\"400\" \/><\/a><\/p>\n<h2>To Hire or Not to Hire Smokers\u2014That Is the Question at American Express<\/h2>\n<p><span style=\"color: #333333;\">American Express, a financial services company, found that smokers were costing the company $5,000\u2013$6,000 more per year than nonsmokers. With medical costs rising 10 percent\u201315 percent per year, the board of directors wants to discuss whether the company should refuse to hire smokers.<\/span><\/p>\n<p><span style=\"color: #333333;\">Nationwide, about 6,000 companies refuse to hire smokers. Costs are driving the trend not to hire smokers. According to the CDC, a smoker will have 50 percent higher absenteeism and, when present, will work 39 fewer minutes per day because of smoke breaks, which leads to 1,817 lost hours of annual productivity. A smoker will have higher accident rates, cause $1,000 a year in property damage (from cigarette burns and smoke damage), and will cost up to $5,000 more a year for annual insurance premiums.<\/span><\/p>\n<p><span style=\"color: #333333;\">Few people would fault a company for trying to control costs and maintain a productive workforce, but the question is how far should a company go in pursuit of these goals? Law professor Don Garner believes that \u201cIf someone has the ability to do the job, he should get it. What you do in your home is your own business.\u201d Others say such policies set a dangerous precedent. \u201cThese things are extremely intrusive,\u201d said George Koodray, assistant U.S. director of the Citizens Freedom Alliance. If companies begin by discriminating against smokers, they might\u00a0next discriminate against people who are overweight in order to cut costs.\u00a0<\/span><\/p>\n<p><span style=\"color: #333333;\">As a manager, you have a hard decision regarding such a policy because your choice\u00a0has implications beyond hiring decisions.\u00a0<\/span><\/p>\n<ul>\n<li><span style=\"color: #333333;\">On what basis should the company decide whether or not\u00a0to hire smokers: the best interest of the firm, what the law allows, or individual rights?<\/span><\/li>\n<li><span style=\"color: #333333;\">As a manager\u00a0you have to\u00a0consider both ethics and\u00a0social responsibility. Ethical decision making is concerned with doing right and avoiding wrong. Social responsibility is a broader goal to pursue policies that benefit society.\u00a0Should you protect an individual&#8217;s right to smoke if it places a burden on society? \u00a0Is it ethical to promote society&#8217;s rights if it infringes on the rights of the individual?\u00a0<\/span><\/li>\n<li><span style=\"color: #333333;\">The board is\u00a0charged with increasing shareholder wealth,\u00a0so they particularly want a decision that&#8217;s in the best interest of the company&#8217;s financial health. Do you promote shareholders interests over those of the individual or society?\u00a0<\/span><\/li>\n<\/ul>\n<p><span style=\"color: #333333;\"><em>If you were in charge at American Express, what would you do?<\/em><\/span><\/p>\n<p><span style=\"color: #333333;\">This scenario enables\u00a0us to explore fundamental questions about the nature of ethical and legal behavior in business.\u00a0 It also highlights the tension between our ideals\u00a0and how they play out in the real world. Sometimes, acting in ways that are ethical and legal are one and the same thing. Other times, they are not.<\/span><\/p>\n<h2>Ethical Behavior<\/h2>\n<p><span style=\"color: #333333;\"><strong>Ethics<\/strong> are a set of standards that govern the conduct of a person, especially a member of a profession. \u00a0While ethical beliefs are held by individuals, they can also be reflected in the values, practices, and policies that shape the choices made by decision makers on behalf of their organizations<a class=\"footnote\" title=\"Source: Boundless. \u201cDefining Ethics.\u201d Boundless Management. Boundless, 20 Sep. 2016. Retrieved 01 Dec. 2016 from https:\/\/www.boundless.com\/management\/textbooks\/boundless-management-textbook\/ethics-in-business-13\/ethics-an-overview-95\/defining-ethics-446-8310\/\" id=\"return-footnote-7843-1\" href=\"#footnote-7843-1\" aria-label=\"Footnote 1\"><sup class=\"footnote\">[1]<\/sup><\/a>. Professions and organizations regularly establish a &#8220;Code of Ethics&#8221; that serves to guide the behavior of members of the profession or organization.\u00a0In the medical profession, for instance, doctors take an ethical oath to \u201cdo no harm.\u201d The American Society of Mechanical Engineers\u2019 code states, \u201cEngineers shall hold paramount the safety, health, and welfare of the public in the performance of their professional duties.\u201d \u00a0\u00a0<\/span><\/p>\n<h2>Legal Behavior<\/h2>\n<p><span style=\"color: #333333;\"><strong>Legal behavior<\/strong> follows the dictates of laws, which are written down and interpreted by the courts. In decision making, determining the legality of a course of action is facilitated by the existence of statutes, regulations, and codes. \u00a0Unlike ethical considerations, there are established penalties for behaving in a way that conflicts with\u00a0the law.\u00a0However, as society evolves, what constitutes\u00a0legal behavior also changes. For example, until recently, the possession or use of marijuana was illegal in the State of Colorado. As a result of the\u00a0legislation that legalized marijuana, existing laws will need\u00a0to be reinterpreted, and undoubtedly additional laws will be enacted to govern what was formerly illegal behavior. Whether or not an individual thinks it is\u00a0 ethical to use\u00a0a potentially harmful substance, the fact is that the law now allows such behavior.\u00a0<\/span><\/p>\n<p><span style=\"color: #333333;\">Using these as working definitions, let\u2019s return to\u00a0American Express.<\/span><\/p>\n<h2>Ethical Considerations<\/h2>\n<p>If the company decides not\u00a0to hire\u00a0smokers, then the company would essentially be interfering with the individual\u2019s right to engage in a legal activity. If the company dictates to employees about smoking, what else can they decide for employees? The National Institute for Health reports that the aggregate national cost of overweight and obesity combined was $113.9 billion. Does the company set Body Mass Index (BMI) limits for potential employees to reduce the cost of medical coverage for obesity-related illness? As you can see, such decisions are complex\u2014and, some would say, a slippery slope.<\/p>\n<h2>Legal Considerations<\/h2>\n<p><span style=\"color: #333333;\">Would American Express&#8217;s decision not to hire smokers constitute lifestyle discrimination? A company can require that employees not smoke during their shift or anywhere on company premises, but does it have the right to require them\u00a0not to smoke when <em>not<\/em> at work or <em>not<\/em> on company property? According to the ACLU, it can become lifestyle discrimination if the company requires that employees not smoke when they\u2019re not at work, off duty, and\/or off work premises. In fact, smokers are protected from employment-based discrimination in at least two dozen states.\u00a0<a class=\"footnote\" title=\"Mirabella, L. (2014). In Maryland, smoking could cost you job. Retrieved October 12, 2016, from http:\/\/www.baltimoresun.com\/business\/bs-bz-no-smoking-hiring-policy-20140705-story.html\" id=\"return-footnote-7843-2\" href=\"#footnote-7843-2\" aria-label=\"Footnote 2\"><sup class=\"footnote\">[2]<\/sup><\/a>. More than half of the states in the U.S. protect employees against employers who impose certain lifestyle requirements, such as only hiring non-smokers or refusing to hire individuals who are obese or have high cholesterol. Clearly American Express is dealing with a legal issue when considering the non-smoker policy, but as with the ethical issue, it&#8217;s not cut and dried. \u00a0<\/span><\/p>\n<p><span style=\"color: #333333;\"><em>If you were in charge at American Express, what would you do?<\/em><\/span><\/p>\n<p><span style=\"color: #333333;\">As this example\u00a0shows, people take positions and make\u00a0choices within\u00a0different frameworks, and those frameworks, while overlapping, are not always perfectly aligned. The legal framework establishes laws that govern\u00a0behavior\u00a0while the ethical framework contains sets of standards and rules governing the\u00a0behavior of individuals within groups or professions.<\/span><\/p>\n<p>As you will see in the rest of this module, when\u00a0businesses try to \u201cdo the right\u201d thing\u2014by the law, by their shareholders, by their employees, by their customers, and other stakeholders\u2014there is often a complex interplay of ethical and legal considerations.<\/p>\n\n\t\t\t <section class=\"citations-section\" role=\"contentinfo\">\n\t\t\t <h3>Candela Citations<\/h3>\n\t\t\t\t\t <div>\n\t\t\t\t\t\t <div id=\"citation-list-7843\">\n\t\t\t\t\t\t\t <div class=\"licensing\"><div class=\"license-attribution-dropdown-subheading\">CC licensed content, Original<\/div><ul class=\"citation-list\"><li><strong>Authored by<\/strong>: Robert Carroll. <strong>Provided by<\/strong>: Montgomery College. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by\/4.0\/\">CC BY: Attribution<\/a><\/em><\/li><li>Revision and adaptation. <strong>Authored by<\/strong>: Linda Williams and Lumen Learning. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by\/4.0\/\">CC BY: Attribution<\/a><\/em><\/li><\/ul><div class=\"license-attribution-dropdown-subheading\">CC licensed content, Shared previously<\/div><ul class=\"citation-list\"><li>Smoke Break. <strong>Authored by<\/strong>: Thomas Hawk. <strong>Located at<\/strong>: <a target=\"_blank\" href=\"https:\/\/www.flickr.com\/photos\/thomashawk\/12497830655\/\">https:\/\/www.flickr.com\/photos\/thomashawk\/12497830655\/<\/a>. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by-nc\/4.0\/\">CC BY-NC: Attribution-NonCommercial<\/a><\/em><\/li><\/ul><\/div>\n\t\t\t\t\t\t <\/div>\n\t\t\t\t\t <\/div>\n\t\t\t <\/section><hr class=\"before-footnotes clear\" \/><div class=\"footnotes\"><ol><li id=\"footnote-7843-1\">Source: Boundless. \u201cDefining Ethics.\u201d Boundless Management. Boundless, 20 Sep. 2016. Retrieved 01 Dec. 2016 from https:\/\/www.boundless.com\/management\/textbooks\/boundless-management-textbook\/ethics-in-business-13\/ethics-an-overview-95\/defining-ethics-446-8310\/ <a href=\"#return-footnote-7843-1\" class=\"return-footnote\" aria-label=\"Return to footnote 1\">&crarr;<\/a><\/li><li id=\"footnote-7843-2\">Mirabella, L. (2014). In Maryland, smoking could cost you job. Retrieved October 12, 2016, from http:\/\/www.baltimoresun.com\/business\/bs-bz-no-smoking-hiring-policy-20140705-story.html <a href=\"#return-footnote-7843-2\" class=\"return-footnote\" aria-label=\"Return to footnote 2\">&crarr;<\/a><\/li><\/ol><\/div>","protected":false},"author":26,"menu_order":3,"template":"","meta":{"_candela_citation":"[{\"type\":\"original\",\"description\":\"\",\"author\":\"Robert Carroll\",\"organization\":\"Montgomery College\",\"url\":\"\",\"project\":\"\",\"license\":\"cc-by\",\"license_terms\":\"\"},{\"type\":\"original\",\"description\":\"Revision and adaptation\",\"author\":\"Linda Williams and Lumen Learning\",\"organization\":\"\",\"url\":\"\",\"project\":\"\",\"license\":\"cc-by\",\"license_terms\":\"\"},{\"type\":\"cc\",\"description\":\"Smoke Break\",\"author\":\"Thomas Hawk\",\"organization\":\"\",\"url\":\"https:\/\/www.flickr.com\/photos\/thomashawk\/12497830655\/\",\"project\":\"\",\"license\":\"cc-by-nc\",\"license_terms\":\"\"}]","CANDELA_OUTCOMES_GUID":"","pb_show_title":"on","pb_short_title":"","pb_subtitle":"","pb_authors":[],"pb_section_license":""},"chapter-type":[],"contributor":[],"license":[],"class_list":["post-7843","chapter","type-chapter","status-publish","hentry"],"part":85,"_links":{"self":[{"href":"https:\/\/courses.lumenlearning.com\/wmintrobusiness\/wp-json\/pressbooks\/v2\/chapters\/7843","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/courses.lumenlearning.com\/wmintrobusiness\/wp-json\/pressbooks\/v2\/chapters"}],"about":[{"href":"https:\/\/courses.lumenlearning.com\/wmintrobusiness\/wp-json\/wp\/v2\/types\/chapter"}],"author":[{"embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/wmintrobusiness\/wp-json\/wp\/v2\/users\/26"}],"version-history":[{"count":25,"href":"https:\/\/courses.lumenlearning.com\/wmintrobusiness\/wp-json\/pressbooks\/v2\/chapters\/7843\/revisions"}],"predecessor-version":[{"id":11150,"href":"https:\/\/courses.lumenlearning.com\/wmintrobusiness\/wp-json\/pressbooks\/v2\/chapters\/7843\/revisions\/11150"}],"part":[{"href":"https:\/\/courses.lumenlearning.com\/wmintrobusiness\/wp-json\/pressbooks\/v2\/parts\/85"}],"metadata":[{"href":"https:\/\/courses.lumenlearning.com\/wmintrobusiness\/wp-json\/pressbooks\/v2\/chapters\/7843\/metadata\/"}],"wp:attachment":[{"href":"https:\/\/courses.lumenlearning.com\/wmintrobusiness\/wp-json\/wp\/v2\/media?parent=7843"}],"wp:term":[{"taxonomy":"chapter-type","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/wmintrobusiness\/wp-json\/pressbooks\/v2\/chapter-type?post=7843"},{"taxonomy":"contributor","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/wmintrobusiness\/wp-json\/wp\/v2\/contributor?post=7843"},{"taxonomy":"license","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/wmintrobusiness\/wp-json\/wp\/v2\/license?post=7843"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}