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CHAPTER 1

The Basic of Ethics


“Ethics” comes from the Greek word ethos, meaning character, or “a characteristic way of acting.”
- It is the science of the morality of human acts.
“Morality” comes from the Latin word moralis, meaning customs or manners.

- Business ethics is concerned primarily with the relationship of business goals and techniques to
specific human ends.
- Business ethics studies the special obligations that a man or a citizen accepts when he becomes a
part of the world of commerce.

Human Act and Act of Man


- A human act is one that proceeds from the deliberate free will of man. It is an act that is
deliberately and knowingly performed by one having the use of reason. Intellect and will are
in play.
- An act of man is one that is not dependent upon intellect and free will. In plain language, an
act of man is essentially an animal act. I.e., If a man walks hi his sleep, he performs not a
human act but merely an act of man.

Essential Attributes of Human Act:


1. It must be performed by a conscious agent who is aware of what he is doing and of its
consequences.
2. It must be performed by an agent who is acting freely, that is, by his own volition and powers.
3. It must be performed by an agent who decides wilfully to perform the act.
- Human acts must, therefore, be knowing, free, and wilful.

Elements Determining Morality


1. The act itself.
2. Purpose or end.
3. Circumstances

The Concept of Responsibility


 The general principle relating with responsibility is that whatever hurts the individual or the
institutions necessary for his growth may be looked upon as an evil in some way.
 What truly promotes the growth of the individual and the means available to him is morally
good.
 Nearly everything we do has some harmful impact on others or ourselves.

BUSINESS ETHICS by Reynaldo A. Padilla/topic module*prepared by C.Ocfemia


 If we were responsible for all the evil that flowed from our activities, whether foreseen or not,
we would despair for being ethical.
i.e. the employer who must fire an incompetent worker knows that the man’s family
will suffer. Is he responsible for this effect?
 “Man is responsible at least for what he freely wills whether as a means or an end.”

The Principle of Double Effect


The principle of double effect justifies certain actions that produce “indirectly” certain evil
consequences, provided at least four conditions are met:
1. the action, by itself and independently of its effect, must not be morally evil;
2. the evil effect must not be a means to producing the good effect;
3. the evil effect is sincerely not intended, but merely tolerated; and
4. there is a proportionate reason for performing the action, in spite of its evil consequences.

The Concept of Proportionality


Proportionality is be judged by:
1. The type of goodness or evil involved.
2. The urgency of the situation.
3. The certainty or probability of the effects.
4. The intensity of one’s influence on the effects.
5. The availability of alternate means.
 In the abstract, a necessary goodwill outweighs a merely useful good.
 In the concrete, necessity is influenced by the urgency of the situation.
 The certitude or probability of an effect.
 The intensity of one’s influence.
 Factors must be considered together.
 The availability of alternate means.

Ethical Concerns in Business


 Public concerns about ethical practices in business usually relate to issues like embezzlement,
accepting bribes or poisoning the environment.
 One set of relationships and responsibilities is directly related to employees, and includes such
areas as discipline, performance appraisal, safety, and the administration of reward systems.
 Another set is concerned with customers and suppliers, and includes the intricate aspects of
such elements as timing, quality and price.
 Whatever the viewpoint, good ethics means good business. Successful organizations and
managers take ethics seriously.

BUSINESS ETHICS by Reynaldo A. Padilla/topic module*prepared by C.Ocfemia