American International University Bangladesh

Faculty of Business Administration

EMBA Program

Assignment
BUSINESS ETHICS

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Submitted To:

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ZAKIR ABU MOHD SYED
Faculty

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American International University Bangladesh.
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Submitted By:
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Student ID : 19-91513-3
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NAME: GAZI MD MAKSUD UR RAHIM

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 Business Ethics and Corporate Governance

in Bangladesh

1. Introduction

The word ethics is derived from the Greek word “ethikos‘ which means custom or character. It
is the science of morals describing a set of rules of behavior. Business Ethics” can be defined as the
critical, structured examination of how people and institutions should behave in the world of commerce.
In particular, it involves examining appropriate constraints on the pursuit of self-interest, or (for
firms) profits, when the actions of individuals or firms affect others.

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2. Business Ethics

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Business ethics (also corporate ethics) is a form of applied ethics or professional ethics that
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examines ethical principles and moral or ethical problems that arise in a business environment. It
applies to all aspects of business conduct and is relevant to the conduct of individuals and entire
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organizations.
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According to Potter Stewart-―”Ethics is knowing the difference between what you have
a right to do and what is right to do.” According to Valdemar W. Setzer-―”Ethics is not
definable, is not implementable, because it is not conscious; it involves not only our thinking, but also
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our feeling”. According to Thomas Erskine-―”In the New Testament, religion is grace and ethics
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is gratitude.” According to Bertrand Russell-―”Ethics is in origin the art of recommending to

others the sacrifices required for cooperation with oneself.”
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Business ethics is the application of a moral code of conduct to the strategic and operational
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management of a business. Business ethics and therefore business morality generally result
from an individual's own moral standards in the context of the political and cultural environment
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in which the organization is operating.

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 3. Two Broad Areas of Business Ethics

Broad Areas of Business

Ethics
Managerial Moral
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Managerial mischief. Madsen and Shafritz, (1990) explain that "managerial mischief"
includes "illegal, unethical, or questionable practices of individual managers or organizations,
as well as the causes of such behaviors and remedies to eradicate them."

Moral mazes. The other broad area of business ethics is "moral mazes of management”

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and includes the numerous ethical problems that managers must deal with on a daily basis,

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4. Levels of Business Ethics

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In our mission to define business ethics, Johnson and Scholes provide a useful way of
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classifying the diverse elements there in:
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The macro/ systematic level:

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a. The role of business in the national and international organization

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b. The relative virtues of different political/social systems, such as free enterprise, centrally
planned economies, etc.

c. International relationships and the role of business on an international scale

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 The corporate/ company level:

a. Corporate social responsibility

b. Ethical issues facing individual corporate entities (private and public sector) when formulating
and implementing strategies

The individual/ personal level:

a. The behavior and actions of individuals within organizations

5. Importance of Business Ethics

Most of us would agree that it is ethics in practice that makes sense; just having it carefully

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drafted and redrafted in books may not serve the purpose. Primarily it is the individual, the consumer,

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the employee or the human social unit of the society who benefits from ethics. In addition ethics is

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important because of the following:

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Satisfying Basic Human Needs: Being fair, honest and ethical is one of the basic
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human needs. Every employee desires to be such himself and to work for an organization that
is fair and ethical in its practices
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b. Creating Credibility: An organization that is believed to be driven by moral values is

respected in the society even by those who may have no information about the working and
businesses of that organization. British American Tobacco, for example is perceived as an
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organization for good corporate governance and social responsibility initiatives. This perception
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is held far and wide even by those who do not even know what business the organization is
into.
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c. Uniting People and Leadership: An organization driven by values is revered by its

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employees also. They are the common thread that brings the employees and the decision
makers on a common platform. This goes a long way in aligning behaviors within the
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organization towards achievement of one common goal or mission.

d. Improving Decision Making: A man’s destiny is the sum totals of all the decisions that
he/she takes in course of his life. The same holds true for organizations. Decisions are driven
by values. For example, an organization that does not value competition will be fierce in its
operations aiming to wipe out its competitors and establish a monopoly in the market.

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 e. Long Term gains: Organizations guided by ethics and values are profitable in the long
run, though in the short run they may seem to lose money.

f. Securing the Society: Often ethics succeeds law in safeguarding the society. The law
machinery is often found acting as a mute spectator, unable to save the society and the
environment. Technology, for example is growing at such a fast pace that the by the time law
comes up with a regulation we have a newer technology with new threats replacing the older
one. Lawyers and public interest litigations may not help a great deal but ethics can.

6. Suggestions to Conduct Ethical Decision Making

Ethical decision making is a very tough prospect in this dog-eats-dog world. To make correct

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decision there are three questions

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Is it legal? The legality of the decision should be examined not just from the civil law

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perspective, but also in regards to company policies or standards.

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Is it balanced? The purpose of this question is to activate sense of fairness and rationality.
Will the decision be fair or will it heavily favor one party over another, in the both the short and
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long-term?
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How will it make me feel about myself? This last question gets to focus on own emotions,
standards, and sense of morality. it‘s probably an indication that one’s conscience is
wrestling with the decision and its alignment with personal values.
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In this age of liberalization and globalization the unethical conduct will not be tolerated. That is
why the given suggestions may lead to a new frontier to conduct ethical business and survive
successfully in the competitive environment.
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7. Benefits of Managing Ethics in Workplace

Following are the list of benefits that derives from managing ethics in workplace:
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a. Attention to business ethics has substantially improved society, ethics programs help
maintain a moral course in turbulent times, it can cultivate strong teamwork and productivity,
this programs support employee growth and meaning, ethics programs are an insurance
policy, these programs help avoid criminal acts of omission and can lower fines,

b. Ethics programs help manage values associated with quality management, strategic
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 8. Unethical Issues in Large Organizations

Every business has its own ethics which must be followed by every business owner.
This will make the business successful and will win the trust of its employees, customers and all the
people related to the business. People want to buy the product of the company that follows
business ethics. They also recommend this product to many people thus spreading the good will of the
company. But if the company follows unethical practices in business then it will lose the trust of its
customers and its reputation will spoil, thus leading to losses in the company and ultimately
closure of business. Business ethics reflects the philosophy of business and the aim is to determine
the purpose of the company. Researchers and study show that the following unethical issues
hamper the smooth operation of the business in large organizations. They are:

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 9. Managing or Encouraging Ethical Behavior
Managing the financial operations of a company can be a complex effort. Companies need to
balance their desire to grow with the realities of maintaining their financial relationships, satisfying their
investors and making a profit.
a. Government Regulations: The government can do so by legislating more stringent
regulations. But, rules require enforcement and when in many cases there is evidence of Lack
of enforcement even the ethical business person will tend to "slip something by “without getting
caught. Increased regulation may help, but it surely cannot solve the entire business ethics
problems.

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b. Trade Associations Setting Guidelines: Trade associations can and often do provide

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ethical guidelines for their members. These organizations within particular industries are in an

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excellent position to exert pressures on members that stoop to questionable business practices.

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Companies Providing Code of Ethics: Employees can more easily determine and
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adopt acceptable behavior when companies provide them with a "code of ethics." Such codes
are perhaps the most effective way to encourage ethical behavior. A code of ethics is a written
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guide to acceptable and ethical behavior that outlines uniform policies, standards and
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punishments for violations. Because employees know what is expected of them and what will
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happen if they violate the rules, a code of ethics goes a long way towards encouraging ethical
behavior. However, codes cannot possibly cover every situation. Companies must also create
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an environment in which employees recognize the importance of complying with the written
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code. Managers must provide direction by fostering communication, actively modeling and
encouraging ethical decision making, apart from investing in training employees to make ethical
decisions
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d. Whistle Blowing Technique: Sometimes, even employees who want to act ethically
may find it difficult to do so. Unethical practices can become ingrained in an organization.
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Employees with high personal ethics may then take a controversial step called "whistleblowing."
Whistle blowing is informing the press or government officials about unethical practices in an
organization. Whistle blowing could have averted disaster and prevented needless deaths in the
Challenger space shuttle disaster, for example. How could employees have known about life-
threatening problems and let them pass? Whistle blowing on the other hand, can have serious
repercussions for employees; those who make waves sometimes lose their jobs

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 10. Conclusion
The main objective of business is to serve people with their every need for the well-being
of human being and to ensure that, there is no alternative of following business ethics. Since the
practice of business ethics in our country is still not ubiquitous, we are not getting the proper
environment for the business, and thus often we are facing some crisis situation and it is hampering our
total economic development. Our policy makers and the top executives of the organizations should give
more concern in making ethical policies and take proper steps to encourage business executives and
service holders to follow them.

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