References

• Business ethics : methods and application; Christian U. Becker, © 2019

Routledge is an imprint of the Taylor & Francis Group, an informa business

• Ethical Business Linda Ferrell & O. C. Ferrell, Copyright © 2009 Dorling

Kindersley Limited

• Engineering Ethics: Concepts and Cases 5th ed. Jr. Charles E. Harris, et al,.
(2014) Cengage Learning

• Business Ethics in Asia Bulaong, O. Jr. (2014).

• Values and Work Ethics. Saidali, M. (2015).

What do we mean
when say Ethics?
What is the
relationship between
ethics and business?
Ethics and Business are interrelated in various ways,
and it is important for the success of business and the
wellbeing of society that ethics and business are
properly correlated, the proper implementation of
ethics in business so that it contributes to business
success and ensures that business is a positive force
in the world.
Two Fundamental Perspectives:

• The Instrumental Perspective

• The Philosophical Perspective.

THE INSTRUMENTAL PERSPECTIVE OF
BUSINESS ETHICS

The instrumental perspective of business ethics considers the

function of ethics for business.

The task of business ethics is to develop ethical tools that support

business success and to provide knowledge of how to optimally
implement such tools into business strategies, operations, and
organizational design
Ethical values and principles matter for everyday business
activities and are an inherent part of successful business.

For instance, consider small businesses that operate in one location, a

smaller town or city, and serve mainly local customers. Honesty, reliability,
and trustworthiness are crucial factors for the long-term success of such a
business. If the business starts using unethical practices, e.g., by tricking or
neglecting customers and local suppliers, it probably will not stay in
business long. Generally, as the Internet today allows for reviews to quickly
spread and for customers to share information about businesses, ethical
business practice becomes increasingly crucial for business success.
the proper organizational functioning of larger corporations.
The success of corporations depends on various ethical factors,
such as a sound ethical culture, ethical leadership, proper
design and implementation of rules and policies, proactive
prevention of internal frictions and wrongdoing, and a shared
commitment of the leadership and employees to the core
values of the company.

For instance, an ethically corrupt culture, internal frictions, and distrust

can undermine successful work. Significant instances of internal
wrongdoings, such as harassment cases, stealing from the company,
and bribery cases, can threaten business success and result in serious
legal issues. Ethical aspects are also important for managing the
relationship of a corporation with its external framework; that is, its
stakeholders and the societies and environments in which it operates.
the relevance of ethics for individual careers.
Ethical principles, values, and virtues matter in
professional life. Two main factors are crucial for a
successful career: excellent professional knowledge and
display of professional ethics.

Basic ethical principles, such as integrity, reliability, loyalty, and

responsibility, matter for any position and career. In addition, certain
positions or professions require ethical principles that are specifically
relevant to them. For accountants, trustworthiness and objectivity are
crucial; engineers have a specific responsibility for public safety; leaders
need to be responsible and fair; and employees are expected to be
reliable and trustworthy. Also, in professional life, one can encounter
various ethically difficult situations and dilemmas and may have to make,
communicate, and justify tough decisions.
 From an instrumental perspective, it is also
crucial to understand that business ethics is a
highly dynamic and increasingly complex
challenge. Businesses are constantly facing
new ethical challenges and need to have
tools to recognize and effectively address
new and shifting ethical landscapes.
THE PHILOSOPHICAL PERSPECTIVE
OF BUSINESS ETHICS

The philosophical perspective on the relationship

between ethics and business starts from an
ethical viewpoint and asks:

1. What is the ethical meaning of business?

2. What is the meaning of business or
economic aspects within a broader ethical
context?
the relationship between ethics and business from a
philosophical perspective.

It considers the ethical meaning of economic and business

aspects against the backdrop of her personal values and
her conception of a good life.

for instance, (ethical) reasons for having a capitalist market economy.

Proponents of capitalism have argued that this type of economy serves

individuals and society best and supports fundamental ethical
principles, such as individual freedom and equality. Capitalism is
supposed to provide opportunities to everyone, enable everyone to
choose a career and pursue goals, promote fair competition, reward
performance, stimulate innovation and growth, and realize an efficient
allocation of goods and services
We need to reflect on the question of what it means for business in
the 21st century to be a positive force in the world against the
backdrop of the characteristics and challenges of today’s economy.
We need to carefully analyze ethical aspects of the current economic
system and consider whether we need to modify the economy to
properly address new ethical challenges and normative
requirements.

For instance, new ethical challenges result from the issues of

sustainability. Sustainability implies ethical requirements and
expectations for the economy and business that we have not
particularly emphasized so far. In the sustainability perspective, the
economy needs not only be good for our current society and its
individuals, but also good for future generations, nature, and
contemporaries around the world.
The levels of business ethics.

There are many ethical aspects of business, and one

prerequisite for successfully addressing them is to
properly identify the type of ethical aspect that matters
in a specific situation or case.

For instance, an ethical issue could be related to individual decision-making,

organizational design, the structures and the rules of the industry, or societal and
legal aspects, or have a global dimension. The proper identification of the specific
type of ethical issue is a necessary precondition for successfully analyzing and
solving the issue.
It is important to properly identify what ethical issue
belongs to which level, to analyze the interrelation of
different ethical levels, and to understand what level is best
suited to approach a specific ethical issue. Some ethical
challenges cannot be fully addressed by individuals but
require an organizational approach and a solution on the
organizational level.

However, even in such cases, individuals or organizations sometimes need

to make ethical decisions and take action by themselves, particularly in cases
where the level in charge does not, or cannot, fix the issue. With regard to more
complex ethical issues of business, a model of shared responsibilities might be
the best answer and solution.
The relevance of
business ethics –
why is it important?
Ethical challenges are often at the same time
business opportunities or can be turned into business
opportunities. It would therefore be too narrow to see
ethics as a restriction, hindrance, or unavoidable
burden of business practice.

Integrating ethical analysis into strategic management

can reveal many new business opportunities, such as
further efficiency potentials, new markets, new ways
to more robust supply chains, overall improved
products and product life cycles, ethical branding, and
reputation gains.
 Neglect of, or insufficient
dealings with, ethical aspects
can result in substantial
damages and costs.
Enron scandal
of 2001

Financial crisis of 2008

 Gulf of
“The loss of life at the Macondo site on April 20, 2010, and the
Mexico oil
subsequent pollution of the Gulf of Mexico through the summer of
2010 were the result of poor risk management, last-minute changes to
spill in 2010
plans, failure to observe and respond to critical indicators, inadequate
well control response and insufficient emergency bridge response
training by companies and individuals responsible for drilling at the
Macondo well and for the operation of the Deepwater Horizon,” the
latest report said.

VW emissions
scandal in
2015
Question?