You are on page 1of 22

Module 3 : Business Ethics

Running Head: Business Ethics -Module#3

Module 3: Business Ethics

Kishore Kandalai

Aspen University
Module 3 : Business Ethics


The purpose of the abstract is to provide the reader with a brief overview of the overall paper

which in this case is “5” essay questions.

1. In your view, what is leadership? Why is it important and why is studying it filled with


2. What is “leading from the middle,” and how does that influence your view of


3. Describe in detail ethical leadership theory. How do you practice it? How do you

know if you are an ethical leader?

4. Who are values-based leaders? Describe a value-based leader in terms of behaviors

you have worked with or for.

5. How does amoral leadership theory help? Where does it fall short?
Module 3 : Business Ethics

Module 3 Deliverables

Assignments: Essay Questions

Essay Question 1

In your view, what is leadership? Why is it important and why is studying it filled with pitfall?

There are several different definitions. The dictionary defines Leadership is the capacity

or ability to lead" or "Guidance; Direction". Many people think it is simply about being

successful, but it comes down to more than that.

Leaders are those people that use their skills in leadership to make a difference: presidents,

teachers, etc It is not a skill that can simply be picked up from reading a book; leadership skills

are gained through experience, things such as public speaking or organizing an event.

The real meaning of leadership is having an impression on others, possibly inspiring their

decisions. Those who are not leaders are followers. A follower, as defined by the dictionary, is

"One who subscribes to the teachings or methods of another." Maybe having followers is a sign

of good leadership.

A leader must have good communication skills. If that person is not open-minded,

unwillingly to accept the ideas of others, and does not clearly state his ideas, he cannot

sufficiently lead others. An effective leader must also have the ability to make changes. He

cannot always stick to the same teachings. As times change, so must ideas.

A good leader must absolutely accept failure. Failure is a part of life. If he cannot accept

it, and decides to quit after one tiny setback, the impression he gives his followers will be

negative. If his followers decide to go by his example, they will not be effectively influenced.
Module 3 : Business Ethics

A good leader must follow the example of other great leaders, like presidents or even famous

public speakers. Keep in mind that the impressions made on followers is what matters most.

Leadership is one of the best qualities a person can have. If you cannot lead someone or

something you will never be able to do anything the way you want. Most people think leadership

is just the ability to lead but as we can see it more than just leading people. Without leadership

how would this country survive I think that leadership is a great thing and everyone should try to

be a leader
Module 3 : Business Ethics

Essay Question 3

Based on the contents of chapter 3, what does it mean for managers to put business and ethics

together? You may want to refer to your readings in module 1, as well.

Ethics is the term we give to our concern for good behavior. Its human nature to not only

is concerned with our own personal well-being, but also that of others and of human society as a

whole. Basically, treat others how you would like to be treated. Business ethics is very similar to

normal every day ethics. It is related in a way that it involves being fully aware of what we're

doing including the complications and consequences of our actions. Being aware of ethics in

business requires us to be aware of two things. First, we have to have a need with complying

with rules, such as laws, customs and expectations of the community, the principles of morality

and the policies of the organization and such general concerns as the needs of others and

fairness. Second, we should know how the products and services of the business, the actions of

its members, could affect its employees, the community and the society as a whole, either

positively or negatively.

Good ethics means good business is the viewpoint of many businesses. Businesses and

their managers take ethics seriously. They reason their way through ethical problems and

acceptable solutions. Although there is always the reverse, where businesses give the appearance

of success for long periods of time in spite of unethical practices. The news today is overloaded

with stories of the fallen heroes and devastated businesses that ultimately result from deception

and unethical solutions to the business's problems. Many managers say that they run into ethical

dilemmas because they are involved in relationships with people being employees, peers, and

bosses with whom they have to work with and on whom they are dependent. The problem is
Module 3 : Business Ethics

complicated because these people have needs that are contrary to a business's goals and

competing needs. The manager is forced to either choose between the business or the person,

being a peer or employee, and an unethical choice will affect the relationship of the other for

years to come.

Businesses themselves have several responsibilities many of them being ethical. First,

they have the priority of making jobs. Once they create a job, it's their responsibility to see that

hard work and talent are fairly rewarded. When employees feel they are being treated fairly and

with respect, they return the favor back to their management by following orders and doing any

task assigned to them. If they feel they are being treated badly, they get back at the business

either ethically or unethically.

Managers of a business sometimes lose their ethical perspective when making decisions

that affect people. Perhaps they are busy, or maybe they just don't take the time to think through

the consequences of their decision. Also, if a senior manager were to make a decision that

seemed unethical, the managers would act on the decision without weighing the ethical

"overtones" . The same is also true when several managers with a common goal agree in an

unethical situation. When unethical decisions are made, everyone loses in the long run, both the

company and the person making the unethical decision.

Managers continually chose between people when making decisions such as whom to

hire, which employee to promote, or which employee to lay off or terminate. Managers, knowing

all the employees, their history with the company, their skills, and other factors, cannot help

being having a problem by his/her own conflicting personal interest and biases. When choosing
Module 3 : Business Ethics

between people, objectivity is the best way to make decisions such as who to hire, who to

promote, or who to lay off. Some managers have a problem by trying to choose the person with

the least personal pain possible. Managers should determine the appropriate candidates based on

honest consideration. It's a manager's responsibility to know about who is doing their fair share

of work and who is not. Not doing so will cause low morality in the work place because an

employee not doing his/her fair share and another employee doing his/her job . Another issue of

that strongly is merged with ethics is performance appraisals. Some managers do not feel

comfortable doing them because they do not want to be the "judge and jury" with respect to their

employee's career . Some managers believe also by giving their employee's good feedback will

cause the employee's future job tasks to do down. On the other hand, negative feedback will

demoralize and demean the employee and they give them a higher appraisal then they deserve .

Failure to be honest with employees about their performance is a form of deceit that is damaging

not only to the employee, but the business, and the manager . Managers that follow appropriate

performance evaluation guidelines and feedback procedures create an environment where

employees have an opportunity to correct their mistakes and grow within the business .

Successful Performance Appraisers

• Managers who engage in mutual goal setting and open communication.

• Managers who establish clear, measurable expectations and provide a climate

conductive to success.

• Managers who ask questions, listen careafully, and appreciate and use the ideas of


• Managers who publicly recognize positive performance and privately correct improper

performance when it occurs.

Module 3 : Business Ethics

• Managers who follow through on their commitments

Unsuccessful Performance Appraisers

• Those who establish arbitrary unilateral performance goals or standards. They may or

may not communicate them to employees.

• Those who have not thought through what they expect or don't know how to measure

success, thereby creating a threatening atmosphere to work.

• Those who never seek ideas of others or listen, yet have a solution for everyone else's


• Those who spend too much time looking for things that are wrong and too little looking

for things that are right.

• Those who accept substandard performance or misrepresent it in providing feedback.

• Those who do not take their commitments seriously.

In businesses, it is fundamental that managers are responsible for maintaining discipline among

the employees they supervise . Many managers don't discipline their employees if the action isn't

severe, which is a mistake. It's a mistake because if the employee had previously done something

that violates the business's code of conduct and wasn't disciplined, that employee and others that

know about this will think that they wont get into trouble and continue doing these wrongs.

Some managers who don't understand their roles relative to discipline, they will probably either

over- or under-react . The word discipline means, "to teach so as to mold" . Unfortunately most

managers don't learn the "teaching and molding" aspects.

Module 3 : Business Ethics

Tips to Accentuate Positive Discipline

• Make sure your players know the standard of performance desired.

• Teach them how to attain standards.

• Encourage them as they progress in the direction desired.

• Compliment them when they attain standards and continue to reinforce positive

performance periodically.

Many incentive systems have been distinguished for employees that do their jobs

correctly and go above and beyond the tasks to get their jobs accomplished. Ethics comes into

affect for several reasons when dealing with incentive programs. Managers may feel morally

responsible to give an employee who previously won an award to give it to them again to not

discourage them, even if the employee didn't deserve the award . Also, managers may give the

awards to people they like personally more than others on a bias level. This not only hurts the

business, in the long run other employees start to notice this and become demoralized and either

their job is affected or they quit. This is not only unethical but it disrupts the business in general.

Guidelines for Ethical Administration of Reward Systems

• Managers should lay groundwork by insuring there is mutual understanding with each

employee about what is expected in terms of performance

• Managers should update job descriptions as changes occur and insist that the salary

grades of my employees remain appropriate to their positions.

• Managers should consistently monitor performance against expectations and give all

employees appropriate feedback.

• Managers should be alert for both superior and inferior performance as related to goals

and standards.
Module 3 : Business Ethics

• Managers should note and communicate to others, employee efforts to develop and

increase their potential.

• Managers should not let nonperformance factors like friendship, race, religion, family

background, sex, or age influence their decisions.

• Managers should test their decisions to be sure they are based on facts and just not

assumptions or impressions.

• Managers should make their decisions on objective data and push aside any

unwillingness to help their employees face reality.

• Managers who observer other managers who are unethical in distributing awards,

should resist the same impulse and do something about it explaining that in the long run it

actually hurts the business.

• Managers should strive to maintain equity between employees and be prepared to

justify with facts their decisions to anyone.

Not only are managers responsible for giving orders to their employees, but the are responsible

for taking orders from their bosses. Some orders may not only affect employees, customers, and

general public negatively, but might also be unethical. A manger that passes an unethical order

on to their employees may not have considered the ethics on his/her own. Some managers who

value ethics may have a hard time giving out the order but there are some managers that will

either ignore the order or challenge it because they know its wrong. When challenging an order,

the manager challenging the order must be aware of what could happen to him and the

repercussions of doing so which may end up being his/her job. When considering whether or not
Module 3 : Business Ethics

to challenge an order the manager may consider unethical, the manager should try to suggest a

better alternative to help him become successful and not say that the order is pointless.

Ten Ethical Mistakes to Avoid

• Lying or in any way misrepresenting the facts about the activities that a manager directs.

• Blaming the manager's boss for the manager's personal mistakes or those of his employees.

• Divulging personal or confidential information to peers, senior managers, employees,

customers, competitors, or the general public.

• Permitting, or failing to report, violation of any federal, state or municipal laws or regulations.

• Protecting substandard performers from corrective discipline or termination.

• Condoning or failing to report the theft or misuse of company property.

• Suppressing grievances and complaints.

• Covering up on-the-job accidents and failing to report health and safety hazards.

• Ignoring or violating the boss's commitments to employees.

• Passing on employee ideas as the manager's own.

Ethical decisions of management are what make and break a business. Because of them, people

have good working environments to work in being that they are ethical. Being ethical in

management means that a business will have satisfied clientele, good employees and usually a

great atmosphere to work in. When a business or anyone associated with the business makes an

unethical decision, it usually catches up with them in the end not only hurting themselves and the

business, but those around them such as clientele or investors that are also involved in the

Module 3 : Business Ethics

Essay Question 5

What is relativism (all four types), ethnocentrism, and principlism? Use an example to illustrate

how each is different?

Relativism is the concept that points of view have no absolute truth or validity, having only

relative, subjective value according to differences in perception and consideration. The term is

often used to refer to the context of moral principle, where in a relativistic mode of thought,

principles and ethics are regarded as applicable in only limited context. There are many forms of

relativism which vary in their degree of controversy. The term often refers to truth relativism,

which is the doctrine that there are no absolute truths, i.e., that truth is always relative to some

particular frame of reference, such as a language or a culture (cf. cultural relativism). Another

widespread and contentious form is moral relativism. (See also moral relativism, aesthetic

relativism, social constructionism, and cognitive relativism).

Relativism is sometimes (though not always) interpreted as saying that all points of view are

equally valid, in contrast to an absolutism which argues there is but one true and correct view. In

fact, relativism asserts that a particular instance Y exists only in combination with or as a by-

product of a particular framework or viewpoint X, and that no framework or standpoint is

uniquely privileged over all others. That is, a non-universal trait Y (e.g., a particular practice or

convention for example). Notably, this is not an argument that all instances of a certain kind of

framework (say, all languages) do not share certain basic universal commonalities (say,

grammatical structure and vocabulary) that essentially define that kind of framework and

distinguish it from other frameworks (for example, linguists have criteria that define language

and distinguish it from the mere communication of other animals). Moreover, relativism also

presupposes philosophical realism in that there are actual objective things in the world that are
Module 3 : Business Ethics

relative to other real things. Additionally, relativism assumes causality, as well as a problematic

web of relationships between various independent variables and the particular dependent

variables that they influence.

One argument for relativism suggests that our own cognitive bias prevents us from observing

something objectively with our own senses, and notational bias will apply to whatever we can

allegedly measure without using our senses. In addition, we have a culture bias—shared with

other trusted observers—which we cannot eliminate. A counterargument to this states that

subjective certainty and concrete objects and causes form part of our everyday life, and that there

is no great value in discarding such useful ideas as isomorphism, objectivity and a final truth.

Some relativists claim that humans can understand and evaluate beliefs and behaviors only in

terms of their historical or cultural context.

Forms of relativism

Anthropological versus philosophical relativism

Anthropological relativism refers to a methodological stance, in which the researcher suspends

(or brackets) his or her own cultural biases while attempting to understand beliefs and behaviors

in their local contexts. This has become known as methodological relativism, and concerns itself

specifically with avoiding ethnocentrism or the application of one's own cultural standards to the

assessment of other cultures. This is also the basis of the so-called "emic" and "etic" distinction,

in which:

• An emic or insider account of behavior is a description of a society in terms that are

meaningful to the participant or actor's own culture; an emic account is therefore culture-
Module 3 : Business Ethics

specific, and typically refers to what is considered "common sense" within the culture

under observation.

• An etic or outsider account is a description of a society by an observer, in terms that can

be applied to other cultures; that is, an etic account is culturally neutral, and typically

refers to the conceptual framework of the social scientist. (This is complicated when it is

scientific research itself that is under study, or when there is theoretical or terminological

disagreement within the social sciences.)

Philosophical relativism, in contrast, is the skeptical position that asserts that the truth of a

proposition depends on who interprets it because no moral or cultural consensus can or will be


Methodological relativism and philosophical relativism can exist independently from one

another, but most anthropologists base their methodological relativism on that of the

philosophical variety.

Descriptive versus normative relativism

The concept of relativism also has importance both for philosophers and for anthropologists in

another way. In general, anthropologists engage in descriptive relativism, whereas philosophers

engage in normative relativism, although there is some overlap (for example, descriptive

relativism can pertain to concepts, normative relativism to truth).

Descriptive relativism assumes that certain cultural groups have different modes of thought,

standards of reasoning, and so forth, and it is the anthropologist's task to describe, but not to

evaluate the validity of these principles and practices of a cultural group. It is possible for an
Module 3 : Business Ethics

anthropologist in his or her fieldwork to be a descriptive relativist about some things that

typically concern the philosopher (e.g., ethical principles) but not about others (e.g., logical

principles). However, the descriptive relativist's empirical claims about epistemic principles,

moral ideals and the like are often countered by anthropological arguments that such things are

universal, and much of the recent literature on these matters is explicitly concerned with the

extent of, and evidence for, cultural or moral or linguistic or human universals (see Brown, 1991

for a good discussion).

The fact that there are various species of descriptive relativism are empirical claims may tempt

the philosopher to conclude that they are of little philosophical interest, but there are several

reasons why this isn't so. First, some philosophers, notably Kant, argue that certain sorts of

cognitive differences between human beings (or even all rational beings) are impossible, so such

differences could never be found to obtain in fact, an argument that places a priori limits on what

empirical inquiry could discover and on what versions of descriptive relativism could be true.

Second, claims about actual differences between groups play a central role in some arguments

for normative relativism (for example, arguments for normative ethical relativism often begin

with claims that different groups in fact have different moral codes or ideals). Finally, the

anthropologist's descriptive account of relativism helps to separate the fixed aspects of human

nature from those that can vary, and so a descriptive claim that some important aspect of

experience or thought does (or does not) vary across groups of human beings tells us something

important about human nature and the human condition.

Normative relativism concerns normative or evaluative claims that modes of thought, standards

of reasoning, or the like are only right or wrong relative to a framework. ‘Normative’ is meant in

a general sense, applying to a wide range of views; in the case of beliefs, for example, normative
Module 3 : Business Ethics

correctness equals truth. This does not mean, of course, that framework-relative correctness or

truth is always clear, the first challenge being to explain what it amounts to in any given case

(e.g., with respect to concepts, truth, epistemic norms). Normative relativism (say, in regard to

normative ethical relativism) therefore implies that things (say, ethical claims) are not simply

true in themselves, but only have truth values relative to broader frameworks (say, moral codes).

(Many normative ethical relativist arguments run from premises about ethics to conclusions that

assert the relativity of truth values, bypassing general claims about the nature of truth, but it is

often more illuminating to consider the type of relativism under question directly.)

Ethnocentrism is the tendency to believe that one's ethnic or cultural group is centrally

important, and that all other groups are measured in relation to one's own. The ethnocentric

individual will judge other groups relative to his or her own particular ethnic group or culture,

especially with concern to language, behavior, customs, and religion. These ethnic distinctions

and sub-divisions serve to define each ethnicity's unique cultural identity.

Principlism is a system of ethics based on the four moral principles of:

1. Autonomy--free-will or agency,
2. Beneficence--to do good,
3. Nonmaleficence--not to harm, and
4. Justice--social distribution of benefits and burdens
Module 3 : Business Ethics

Essay Question 6

What are universal values and how are they helpful for sorting out how to act in a global

economy? Refer to Donaldson’s ethical algorithm in your response.

In the increasingly globalizing business environment, the issues of common good between the

host country and the parent country are becoming a vexing issue. This has prompted us to search

for Universal values that may serve as tools for the common good. Approach: Firstly, we

understood the concept of common good and its relation with ethics in the context of

International Trade. Then, we analyzed various conflicting cross-cultural values which include

bribery, child labor, and environmental pollution which affect the common good through various

case studies. An attempt is made to identify the applicability of Universal Values in these cases

and its impact on global economy. We have suggested strategies that business person can adopt

to compete ethically in corrupt environments based on certain guidelines such as Caux Principles

that can be applied across various cultures. Findings: The study identifies strategies to apply

universal values in international trading. The extent to which the cross-cultural value conflicts

are resolved depends on the implementation of universal values by MNCs. Research limitations:

In view of the paucity of time, the various aspects of ethics as applied to international trade could

not be considered. This paper identifies scope for further study. Practical implications: The

universal values and standards identified help multinational organizations to manage the ethical

challenges effectively and contribute to the common good. Originality/ value: The discussions

concerning international trade generally revolve around a particular a policy or how a particular

policy affects a particular sector of the economy, industry, country or region but seldom

discusses the issue of values and ethics. So, there are only few formal researches done on the

aspect of ethics of international trade and its impact on common good. This paper provides a
Module 3 : Business Ethics

frame-work for discussion of ethical issues and identifies universal values applicable in

international trading. Keywords: Ethics, International Trade, Universal Values, Common Good

Globalization has been defined as the process by which an activity or undertaking becomes

global in scope. (Sundaram & Black, 1997). The recent expansion of global business and fall of

trade barriers worldwide have underlined the interest in the topics of ethical behavior and social

responsibility. In addition, as many scholars believe, human rights and environmental

conservation are gaining increasing more recognition in both academic and commercial settings

(Jones, 1991). With the globalization scenario, companies are operating with global groups of

stakeholders to explore the business opportunities throughout the world. As business becomes

less fixed territorially, and corporations are increasingly engaging in overseas markets they

suddenly finding themselves confronted with new and diverse, sometimes even contradicting,

ethical demands. The conflict occurs essentially because of difference in moral values. Moral

values which were taken for granted in the home market may get questioned and pose many

ethical challenges as soon as corporations enter foreign markets. (Mahdavi, 2001). This leads to

search for universal values that may be applicable across the globe. This search has prompted the

study on Universal values.

Ethics is the moral principle that individuals inject into their decision making process and that

helps temper the last outcome to conform to the norms of their society (Duffy, Schumacher,

Michael, Vitell, & Scott, 1999). Moreover, ethical principles have the very profound function of

making behavior predictable. The truly global companies must come to grips with the legal and

moral atmosphere in which they operate. As local companies increasingly engage in cross-border

trade and investment, managers need to recognize that the task of managing an international

business differs from that of managing a purely domestic business in many ways. First of all, the
Module 3 : Business Ethics

differences come from the simple fact that countries are different. Countries differ in their

cultures, socio-economic and political systems, legal systems and levels of economic

development. Despite widespread globalization, still there are many big and enduring differences

between the countries. For a global company, doing international trade, the values followed by

different countries result in many conflicts and pose ethical challenges. The elementary human

values and standards of major ethical-religious traditions were formed by individuals who,

themselves, are part of a highly complex socio-dynamic process in the course of evolution. Even

though the forces of globalization tend to integrate the word economically, problems are

experienced due to lack of moral inspiration or orientation. We live in an age in which many

traditional mores have lost their credibility; when many institutions have been drawn into

identity crisis; and when ethical standards and norms are frequently either marginalized or

unstable. The points discussed above point to the need for a new moral consensus within the

global society with a return to an acceptance and practice of minimum human values and

standards. So, what are the human values and standards which, in our contemporary and

globalizing world, can be regarded as universally valid and acceptable? This makes us to search

for some universal values which are valued and respected in all cultures. 2.1 What are Universal

Values? Universal values are values that a great many human beings in the vast majority of

places and situations, at almost all times, do in fact hold in common, whether consciously and

explicitly or as expressed in their behavior. Second, something could have universal value when

all people have reason to believe it has value. (Jahanbegloo, 1991) On the basis of global ethics,

we have shown that the basic values which underlie all other values are:

1. HUMANITY: Every human being must be treated humanely

2. RECIPROCITY: What you do not wish done to yourself, do not do to others.

Module 3 : Business Ethics

3. CROSS-CULTURAL CONFLICTS: The most common issues faced by managers doing

business in foreign lands stems from the realization that different culture often have quite

different value systems. When these value systems conflict, business must choose whether to

obey the values of their home country or conform to local values and practices. The Conflicts

that arise in international trading due to different cultures, socio-economic and political systems,

legal systems and levels of economic development include: Bribery, child labor, environmental

issues, outsourcing, Pricing, Advertising issues etc.

4. UNIVERSAL ETHICAL THEORIES: In order to solve the conflicts which contain global

ethical issues, decision- making process can be influenced by many ethical approaches. These

approaches can be classified “descriptive-prescriptive and communicative approach” (Alexander,

2003) and “normative (prescriptive), and descriptive (positive)” theory of marketing ethics

approach. These approaches helps us to solve ethical dilemmas by adopting universal values

common to all the cultures and seek for the common good of all the nations.
Module 3 : Business Ethics

References :

Making Globalization Good. New York: Oxford University Inc. Hartman, L. P., & Chatterjee, A.

(2007). Perspectives In Business Ethics (3rd ed.). New Delhi: Tata McGraw-Hill Publishing

Company Limited. ILO. (2003). Retrieved october 10, 2010, from ILO:

.pdf Jahanbegloo. (1991).

Conversations with Isaiah Berlin. Halban Publishers. Jones. (1991).

Ethical Decision Making by individuals is in organization. Academy of Management review.

mahdavi, i. (2001).

Sundaram, A. K., & Black, J. S. (1997). The International Business Environment - Text and

Cases. New Delhi: Prentice Hall of India Private Limited.

Velasquez, M. (2010). Business Ethics - Concepts and Cases. New Delhi: PHI Learning Private


Colvin, G. (2002). Between right and right [Electronic version]. Forbes, 146 , 66.

Cruver, B. (2002). Anatomy of greed. New York: Carroll & Graf.

Module 3 : Business Ethics

Gentile, M., Parks, S., & Piper, T. (1993). Can ethics be taught? Boston: Harvard Business


Jones, D. (2001). Job-cutting firms target bottom 10%. Retrieved December 21, 2002, from

Lynch, J. (1998). Corporate compassion: Succeeding with care. London: Cassell.McKay, Q.

(1997). Is lying sometimes the right thing for an honest person to do? Provo, UT: Executive


Nelson, K. & Trevino, L. (1999). Managing business ethics: Straight talk about how to do it

right. New York: John Wiley & Sons.

Regulate thyself; Wall Street governance [Electronic version]. (2002). The Economist (US).

October 12, 2002.

Seglin, J. (2002). Good for goodness' sake: what we mean when we talk about ethics [Electronic

version]. CFO, the magazine for senior financial executives, 18 (10) 75-77.

Seligman, D. (2002). Oxymoron 101 [Electronic version]. Forbes, 170 , 164.

Sheridan, C. (1996). Enlightened self-interest. Retrieved December 21, 2002, from