Business Ethics

Understanding
Business Ethics

December 2020
Ethics
Ethics is the study
of moral
obligation
involving the
distinction between
right and wrong.
“ The rules about how
entrepreneurs ought to
behave are referred to
as business ethics.
Business
Ethics
 Business Ethics
*Adherence to ethical standards
contributes to the smooth flow of
business exchanges. It establishes trust
between buyers and sellers and between
lenders and borrowers.
 Factors Influencing
Ethical Behavior
Ethical behavior, whether by a person or a business
entity, is influenced by any or a combination of the
following:
1. situation;
2. rewards system;
3. individual differences; and
4. other factors.
Code of
Ethics
Code of Ethics
The code of ethics
is a formal
document
indicating the
entrepreneurship’s
adapted principles
of appropriate
behavior.
 Code of Ethics
A code of ethics can be made effective if
the following requirements are met:
1. It should refer to specific unethical practices*; and
2. it must be supported by top management.
Rewards and
Punishments
Concerning
Ethical Behavior:
Internal
Programs
for
Resolving
Conflicts
Ethics
Review
Committees
Provision
of
Training in
Ethics for
Employees
Top
Management
Support
Ethical
Issues Facing
Entrepreneurships
 Entrepreneurships face ethical
questions on a daily basis. These
springs from the following
relationships:
1. between the company and the customers;
2. between the company and its personnel and
employees;
3. between the company and its business associates;
4. between the company and the investors and the
financial community.
Relation with Customers
Entrepreneurs
are expected by
society to treat their
customers fairly
and not to act in
ways that will be
harmful to them.
The Right
to Be Safe
The Right
to Be
Informed
The Right
to Choose
The Right
to Be Heard
Relations with Personnel
and Employees
Good ethical
conduct requires
entrepreneurs to be
aware of their
responsibilities
to employees.
Workplace
Safety
Quality of
Life
Issues
Avoiding
Discrimination
Preventing
Sexual
Harassment
 Preventing Sexual
Harassment
1. issue a specific policy statement prohibiting sexual
harassment;
2. develop a complaint procedure for employees to follow;
3. create a work environment that encourage sexually harassed
employees to report their experiences;
4. establish a committee to investigate sexual harassment claims;
5. take disciplinary actions against harassers