NATURE AND SCOPE OF BUSINESS ETHICS

Ethics is that branch of philosophy which is concerned with the rightness or wrongness, goodness, badness of human conduct ethics provides the basis for deciding that a particular action is morally good and bad. In the simplest terms, business ethics are moral principles that define right and wrong behaviour in the world of business. The right and wrong behaviour in business is determined by the public interest groups, and business organisations as well as an individual’s personal morals and values. The meaning of ‘ethics’ is that it is the science of moral which is concerned with the human character and conduct. Ethics are the principle of behaviors that distinguish between the rights from the wrong. Business ethics is the evaluations of business activities and behaviors as right and wrong. Ethical conduct conforms with what a group or society, as a whole considers right behaviour. Introduction to Business Ethic There is a combinations of two familiar words, namely business and ethics in business ethics. Business ethics concentrated on moral standards as his apply to business policies institutions and behaviour. It is a specialized study of moral right or wrong. It is a from of applied ethics. It includes not only the analysis of moral norms and moral values but also attempts to apply the conclusions of the analysis to that assortment of institution, technologies, transactions, activities and pursuits that we call business. Business ethics are nothing but the application of ethics in business. It proves that

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Balanced judgements are based on the careful assessment of the relevant information. • Evaluates human practices by calling upon moral standards. one has to informed. It suggests solutions and policies when facing the present 2 . The basic assumptions behind our moral action and judgements are mainly taken for granted. In order to achieve the second objective. • Gives prescriptive advice on how to act morally in a specific kind of situation. Business ethics are concerned with moral issues in business just as medical ethics are concerned with morality of medical practices and policies or political ethics are concerned with the morality of political affairs in business ethics. Analysis consists of clarifying standards and lines of argument. Ethics develops rational methods for answering the present and future issues. Here. The first objective implies analysis and evaluation. It also relates to the behaviour of managers. Objectives of Business Ethics Business ethics has a twofold objective. Business ethics are rules of business activities may be judge. The second objective is to provide therapeutic advice. ethics can be useful as one is often unaware about most moral values and habits of thought.business can be and have been ethical and still make profits more and more interest is being given to the application of ethical practice in business dealing and the ethics implications of business. It leads to an ethical diagnosis of past actions and events.

a culture which flows down word from the top managers and leaders.dilemmas and future dangers. Ethics in Business All over the words. Ethics give rise to efficient economy. collusion etc. Most ethical questions could be of two types overt and convert e. based on well-informed opinions. Nature of Business Ethics i. Ethics are good in itself. there is a growing realizations that ethics is important for any business and to achieve the progress of any society. ii. It is not the government or law which will protect the society. Bribery. ethics are the methodical and systematic elaboration of the norms and values we appeal to in our daily activities. As a reflections. Where these activities are organized under business issues. But ethics alone can protect it. We faces ethics in the practical and reflective variety of business ethics.g. theft. An ethically responsible company is one which has developed a culture of caring for people and environment. sabotage. Ethics and profits go together in the long run. Ethical issues commonly occur in management it goes many of times for beyond the commonly discussed problems of bribery collusion and theft 3 . This especially requires an identification of relevant stakeholder and a clear understanding of the vital issues at stake.

The manager has to perform his jobs well and his quality reflects in the success of a business ethical issues may be sometimes occur as managerial dilemmas. The purpose of industry is to convert the basic raw materials into finished or semi-finished goods. Primary Industry Primary industry is concerned with the production of raw materials. Scope of Business Ethics Scope of business is very broad. iv. a. 4 . It includes all those activities. measured by revenues. Industry be divided into two parts. Primary Industry Secondary Industry a. Following characteristics for a decision to be ethical are needed. merge of firms. Industry: Industry is a part of business.reaching into areas of corporate acquisitions. marketing policies of capital investments. iii. b. cost and profits and the stated performance. which are related to the production and distribution of goods and services with an objective of earning profit. For example – if two firms are merged. ethical question arises with regarded to demoting or firming the employees of those who have been serving honestly of many years. Ethics want a manager to be honest within himself and also in the society.

building bridges. gas and coal. ii. In this industry raw material is converted into some finished or semifinished goods like textile mills. Secondary Industry: Secondary Industry: This industry is concerned with the convention of basic raw materials into finished or semi-finished goods. sugar mills. This industry can also be divided into two types. Basic raw materials is received from the primary industry. ii. etc. Extractive Industry: In this industry hidden resources below the surface of earth are extracted like extraction of oil. i. 5 .i. Orientic etc. etc. etc. Industry: The genetic industry is concerned with the breeding of plants and animals. Constructive Industry: All kinds of construction are included in the type of industry like construction of roads. b.

What is the Nature and Scope of Business: Business includes all those legal activities. social activities. self consumption and gifts. Business Operates within the Society Business is a part of sub-system of the society. the public takes more interest in it. business cannot get loyal customers. which are undertaken for the purpose of earning profit. cannot operate in the market place. Without earning social sanctions. It means the ultimate objective of business is to earn profit. all illegal activities. This leads to the assumption of greater responsibilities. are excludes from the definition of business. Business functioning must attribute to the welfare of the society. business must earn social sanction of the society where it exists and functions. Need for Business Ethics: There are three points for the need of business ethics. B. Managers are turned to public opinion and react to it. In order to survive. If business grows larger. since this will lead to a greater impact on the community. etc. they seek to maintain a proper image of their company in the public mind. develop and excel. It will soon collapse and die away. They are as follows: A. Hence. Every business irrespective of size exists more on ethical means or in total regard to its social concern to survive long: 6 .

Thus. As a statement of purpose. customers. quickly growing and even more quickly dying and forgotten. then business firm that recall a defective and dangerous product is acting in an ethical way. Business Needs To Function As Responsible Corporate Citizens in the Country Business is that organ of the society which creates wealth for the country. business should be ethical and socially responsible. Importance of Business Ethics: It is the application of general ethical rules to business behaviour. then anyone in business. creditors. C. It is not even accurate. stock holders or competitors is acting unethically and immorally. who is dishonest with employees. Hence. if protecting people from harm is considered ethical. It is not a special set of ethical rules different from ethics in general and applicable only to business.If a business establishment resorting to unethical behaviour or not concerning with social welfare. Similarly. For Example: if a society’s ethical rule says that dishonesty is unethical and immoral. narrow mentally and narrower goals and motives are to be avoided. it will call for its own doom. maximising of profit is not only unsatisfying. Business needs to remain ethical for its own good. 7 . Unethical actions and taking decision will shorten the life of the business like a flash in the pan.

The company or society. Competitive pressures 5. This will cause ethical problems. People will be sometimes greedy and put down their own welfare ahead of all others. Personal Gain Business that employs people sometimes wrongly whose personal values are less than desirable. Next is to protect business firms from abuse by unethical competitors. Managers values and attitudes 4. High ethical performance protects the individual who work in business. Individual values widely differ with organisatsional goals 3.The general public expect business to exhibit high levels of ethical performance and social responsibility. ethical problems occur for the following 1. since ethical qualities are difficult to anticipate and measure 8 . “Do no harm” is one of the stronger ethical principles. Business firms and their employees are encouraged to act ethically is to prevent harm to society. Bribery and kickback schemes have become very common and penalize honest business firms. Cross cultural contradictions 1. not bothered about the welfare of the fellow employees. Personal gain 2. Inspite reason: of the positive benefits of good ethical practices.

If the owner of the business sector gives only interests to the individual interest then at a point of time only he flourishes and on the other hand the customer prish. Business has to proceed carefully in screening applicants taking care not to trample individual rights in the search for potentially unethically employees. Managers Values and Attitudes: As decision makers. They are the key people to act ethically or unethically. The values held by the top managers are important in promoting ethical activities. Competitive Pressure: 9 . managers have more-opportunities than others to set an ethical tone for the company. 2. Ethical guidance usually will be provided by the top levels to the employees down below. business is not likely to eliminate this kind of unethical behaviour entirely. If the owner of that business organization resort to “Atma Sukha Talva”. The embezzler the expense account paddler.at the time of recruiting employees. If the organisation is to be made effective good management is required. the chronic sick leaver and the bride taker slip in since the perfect screening system is lacking. Organizational effectiveness is their central goal while at work. 4. many people of the above mentioned type will creep in though an effort to without ethically undesirable applicants are made. 3. Individual values vis-à-vis Organisational Goals: The goal of a business organizational should be the collective welfare.

equal right. business ethics as came to be considered a management discipline. Environmental protection. 1. educational improvement. M. Namara says that. especially since the birth of the social responsibility of business. 2. Business owned responsibility to work to improve society. As per Rober Kreitner in his book “Management” says ‘Highly published accounts of corporate misconduct 10 .both philosophers and business scholars – who have succeeded in relating ethical theory to the various problems of ethics that arise in business. public health. Business is a fruitful subject for philosophical exploration and practicing managers in the World of business can benefit from the results. Business has replaced the word ‘stock holder’ with ‘stakeholder’. Due to this competitive attitude a private sector adopts to unethical means. Business Ethics is a Management Discipline: The business ethics has grown in recent years into an interdisciplinary area of study that has found a secure niche in the fields of liberal arts and business education.Competitive pressures are more exhibited in case of private company in order to wipe out the public sector. On this credit goes to many individuals. Private sectors always want to rise at the cost of public sector to public sector cannot be as competitive as a private sector. etc. C. 5.

but have widespread ramifications. Each person views the ethical question in terms of his own frame of reference. • Every person is individually responsible for the ethical or unethical decision or action that he or she takes. Ethical decisions do not end in themselves.in recent years have led widespread cynicism about business ethics. Characteristics of Business Ethics • Ethical decisions differ with the individual perspective of different persons. • Ethical decisions are voluntary human actions. • Ethical decisions are not limited to themselves.’ 3. Gallup Poll asked in 1992 Americans to rate the ethical standards of various professions. All human beings have the freedom of choice and of free will. 11 . but effects a wide range of other situations as well.

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