Business Ethics : An Overview

Source:
1.ICMR,Chapter1
2.Velaquez ,M.G. Business Ethics,Chapter1

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Nature of Ethics
 What is “ ethics” and how is it interpreted?
 Personal ethics , morals and values
 What are the five concepts frequently used
when discussing ethics?
 How do we define “business ethics”?
 What are the virtues associated with an ideal
ethical decision?
 Ethics and business : Different views
 Stages of ethical consciousness in business

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What is “ ethics” and how is it
interpreted?
 Business ethics has gained status
 Till the 90s,Indian corporate regarded ethics as
an extension of philanthropy
 Intensity of consumer movements , financial
irregularities …..increasing awareness
 Ethics –science of moral , moral principle and
recognized rules of conduct
 Ethics –a system of moral principles and
methods of applying them

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Personal ethics , morals and
values
 Personal ethics-rules by which an individual
lives his personal life
 Character of a man is expressed in terms of his
conduct or actions-right or wrong, moral or
immoral
 Moral judgments require moral standards by
which one judges moral conduct
 Ethics-science of character of a person
expressed as right or wrong conduct of action

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Morals and values
 Moral standards-1.Norms about actions
believed to be right and wrong
 2.Values we place on the kind of objects we
believe are morally good and bad
 Standards imbibed from family and societal
influences
 Characteristics
 Involved with serious injuries
 Not established by law or legislature
 Moral standards preferred to other values(including self-interest)
 Based on impartial considerations
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What are the five concepts used
when discussing ethics?
 Ethical subjectivism
 Ethical relativism
 Consequentialism
 Ethics of virtue
 Ethical dilemmas in business

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Nature of Ethics
 Deals with human beings , associated with
values and morals
 Science-systematic knowledge about moral
behavior and conduct of human beings
 Normative science-implies a guide or
control of action
 Deals with human conduct that is voluntary

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How do we define “business
ethics”?
 Application of moral standards to business
policies , institutions and behavior
 Business ethics concerns itself with what is
right or wrong in the workplace
 Businesses have choices –to maximize
profits, increase sales volume , provide
employee benefits and concern for society
 Sometimes profits and social responsibility
cannot coexist-managerial dilemma?
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Business ethics and profits
 “Business must make a sound profit”-
Survival is linked to profits
 Businesses operate on principle that profit
is not linked to ethical considerations
 Specific instances nullify this principle
 “Only profit ” not acceptable-responsible to
the community-employee welfare ,
shareholder revenue & customer demands

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Applying ethics to corporate
firms
 How do multinational companies
circumvent ethical concerns?
 Shift operations to a country with cheaper labor
and less government regulation.
 Transfer materials and money between
countries to escape paying taxes.
 Transfer products to countries that aren’t ready
for the technology.
 Different nations have different standards.

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What are the virtues associated
with an ideal ethical decision?
 Right-morally correct
 Equitable-Just and equal
 Good-Highest good for all concerned
 Proper-Appropriate and acceptable
 Fair-Honesty
 Just-Action

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Characteristics of ethical
decisions in business
 Ethical decisions differ according to an
individual’s perspective or value system
 Consequences of most ethical decisions are
ambiguous in nature
 Ethical or unethical decisions depends on
individual actions
 Result from voluntary human actions

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Relationship between Business &
Profits
 Unitarian View-business part of moral structure
& moral ethics
 Separatist View -business concentrate on profit
maximization, morality & ethics no role in
business
 Integration View-business and morality are
inter-related
 Business makes profits & discharges social
obligations

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Stages of Ethical Consciousness
in Business
 Law of the jungle-”might makes right”
 Anything for profit-don’t get caught by law
 Profit maximizing in the short-term
 Profit maximizing in the long-term
 Stakeholder concept-objective profit
sharing, development of community service
& philanthropy(annual social reports)
 Corporate citizenship-social objectives &
financial success
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