Ch:2 Business Ethics

Questions of Ch:-2
1.Principles of personal Ethics, principles Professional Ethics
2.Evolution of Ethics Over the years
3.Honesty, Integrity and Transparency are the touchstones of Business Ethics
4.Distinction Between Values and Ethics
6..Roots of unethical Behavior
- Ethical Decision –Making
1.Explain Principles of personal Ethics
-These involve your morals and values.
-They are instilled generally, during childhood, by your parents, family, and
friends.
-They relate to your deep-rooted principles, and how religiously you follow them
determines the kind of person you are.
The nature of your personal ethics depend on whether your principles have an
optimistic effect on the people surrounding you, i.e., your strict adherence to your
principles must not spoil someone else's life; a negative impact on society due to
your principles violates the very reason you are following the.
• I will always speak the truth

• I will respect all those who are elder to me

• I will never hurt anyone purposely

• I will maintain a caring attitude towards everyone

• Honesty

• Integrity

• Loyalty

• Morality

• Transparency

• Trustworthiness & Honesty

• Integrity

• Keeping a Promises

• Loyalty
 • Fairness

• Concern for others

• Give respect to others

• Speak truth

• Follow rules & regulations

• Openness

• Sincerity

• Concern for the well being of others

• Willingly compliance with the law

• Refusing to take unfair advantages of others

• Benevolence

• Doing Good

• Preventing harm

Principles of Professional Ethics

• Punctuality

• Time management

• No gossip

• Safeguard company privacy

• Honesty.

• Integrity.

• Promise-keeping.

• Leadership

• Loyalty.

• Fairness.

• Caring.

• Respect for others.

• Law abiding.

• Commitment to excellence.

• Accountability

• Reputation and morale

Explain How Business Ethics evolved over a time.

Introduction:
 • Business ethics refers to the moral principles that guide the operations of a
company or business.
• Common issues that fall under this umbrella include employer-employee
relations, discrimination, environmental issues, bribery, insider trading, and
social responsibility.
• While many laws exist to set basic ethical standards within the business
community, it is largely dependent upon the leadership within the business
to develop a code of ethics.
• While practicing strong ethics keeps business within the parameters of the
law, it can also serve to build goodwill and brand equity. That's because
popular social issues often drive business ethics. When different issues come
to the forefront, organizations respond by bringing their ethical tenets in line
with new social norms.
Business Ethics in the '60s
• The 1960s brought the first major wave of changes in business ethics.
Cultural values were shifting, with individualism and fierce dedication to
social issues such as environmentalism and world peace coming into vogue.
• Business ethics guide a company's operations and includes such things as
environmental issues, social responsibility, and employee-employer
relations.
• While laws related to business ethics to exist, it is up to each business to
establish a code of ethics within the company.
• Business ethics saw a notable shift in the 1960s when more companies
started embracing social responsibility.
• While young workers in the 1960s were idealistic and wanted to make the
world a better place, employers found their work ethic, compared to that of
previous generations, was lacking.
• Companies responded to the changing times by beefing up human resources
departments, establishing mission statements, and outlining codes of
conduct.
• In response to the changing desires of their employees, however,
businesses also began embracing social responsibility at a level not
previously seen.
• In fact, the 1960s saw businesses trumpet environmental friendliness for
the first time and companies also looked for new ways to give back to their
communities
 Business Ethics in the ‘70s and ‘80s
• During the 1970s and 1980s, two events shaped changes in business
ethics: defence contractor scandals that became highly publicized during the
Vietnam War and a heightened sense of tension between employers and
employees.
• In response, the government implemented stricter policies governing
defence contractors, and companies revamped contracts with employees to
focus less on rigid compliance and more on values.
Popular management philosophy shifted from pure authoritarianism towards
more collaboration and working on equal footing.
Business Ethics in the ’90s and Environmentalism
• The 1990s saw a rebirth of environmentalism, new heights in social
responsibility reaching, and graver legal ramifications for ethical missteps.
• Tobacco companies and junk food manufacturers, for example, faced
heightened scrutiny, along with several important lawsuits over the public
health ramifications of their products.
• Oil companies and chemical companies had to contend with increasing
public pressure to answer for environmental damage.
• Class action lawsuits rapidly gained in popularity and, in response,
businesses were forced to spend more on legal departments.
The Online Realm in 2000+
• From the year 2000 forward, business ethics have expanded to the online
realm.
• The big ethical dilemmas of the 21st century have mostly cantered on
cybercrimes and privacy issues.
• Crimes such as identity theft, almost unheard of 20 years before, are a
threat to anyone doing business online.
• As a result, businesses face social and legal pressure to take every measure
possible to protect sensitive customer information.
• The rise in popularity of data mining and target marketing has forced
businesses to walk a fine line between respecting consumer privacy and
using online activities to clean valuable marketing data.
EXPLAIN HOW TO INCORPORATE HONESTY AND INTEGRITY INTO YOUR
BUSINESS?
 • Keep your word
• Keep your commitments
• Pay attention to your environment
• Stay focused
• Surround yourself with honest people
• Take responsibility
• Respect your employees
• Responsibilities towards stakeholders
• Ready to say sorry
Explain How To Encourage & Maintain Integrity at work place?
• To set a Target(Leading by Examples)
• Compliance with Law
• To show a loyalty
• Reducing Punishments
• To help the Co-workers
• Create good environment-Open & Transparent
• Give a Personal Life Examples
• Clear Communication
• Reward system
• Set regular integrity self-assessments
• Take action when a staff member acts in contravention to your outline of
integrity
Explain How To Encourage & Maintain transparency at work place?
• Set up ethical purpose
• Share advantages & Disadvantages of product & Services
• Share everything with employees as well as with shareholders (goal, vision,
success & failures)
• Attention towards Value & Ethics
• Share the value, policies, practice to employees
 • Do promotion, rewards
• Avoid Punishments
• Maintain Rules & Regulation
• Follow Rule of Equality
Why Honesty, Transparency &Integrity required at work place? OR
Explain importance of Honesty, Transparency & Integrity.
• To increase sales
• To achieve the goal of company
• To Create good Market Image
• To Increase reputation of Company
• For Honesty
• For employees safety
• Sustainability
• Look differently As compare to competitors
• To increase Price of market share
• For safety
• Can get new business opportunities
• Easily get finance from market
• Employees motivation & satisfaction
• Gain Trust, loyalty from other stakeholders
• Investors are ready to Invest their money in our company
• Customer will not switch over because of transparency of business
• Motivated to improve our services
• To take ethical Decision
• To gain new customers
• For profit, survival & growth for company
• Practice Win-Win Partnerships with Our Suppliers
Explain Roots of Unethical Behavior.
1. Personal Ethics
2. Unethical Organizational Culture
3. Immoral Leadership
4. Unrealistic Performance Expectations
5. No Code of Ethics
6. Fear of Reprisal
7. Impact of Peer Influence
8. Setting a Bad Example
Explain Ethical decision making process.
1.Gather the facts:
- Don’t jump to conclusions without the facts
-Questions to ask: Who, what, where, when, how, and why.
-However, facts may be difficult to find because of the uncertainty often found
around ethical issues
-Some facts are not available
-Assemble as many facts as possible before proceeding
-Clarify what assumptions you are making!
2.Define the ethical issues:
- Don’t jump to solutions without first identifying the ethical issue(s) in the
situation.
- Define the ethical basis for the issue you want to focus on.
- There may be multiple ethical issues – focus on one major one at a time
3. Identify the affected parties (stakeholders) :
- Identify all of the stakeholders
- Who are the primary or direct stakeholders?
- Who are the secondary or indirect stakeholders?
- Why are they stakeholders for the issue?
- Perspective-taking -- Try to see things through the eyes of those individuals
affected
- may be multiple ethical issues – focus on one major one at a time.
4.Identify the consequences :
-Think about potential positive and negative consequences for affected parties by
the decision (Focus on primary stakeholders to simplify analysis until you become
comfortable with the process).
-What are the magnitude of the consequences and the probability that the
consequences will happen.
-Short term vs. Long term consequences – will decision be valid over time.
- Secrecy consequences – What are the consequences if the decision or action
becomes public?
- Did you consider relevant cognitive barriers/biases? Consider what your decision
would be based only on consequences – then move on and see if it is similar
given other considerations
5. Identify the obligations (principles, rights, justice):
-Obligations should be thought of in terms of principles and rights involved
A) What obligations are created because of particular ethical principles you might
use in the situation? Examples: Do no harm; Do what you would have anyone in
your shoes do in the given context.
B) What obligations are created because of the specific rights of the stakeholders?
-What rights are more basic vs. secondary in nature? Which help protect an
individual’s basic autonomy?
-What types of rights are involved – negative or positive?
-C) What concepts of justice (fairness) are relevant – distributive or procedural
justice?
-Did you consider any relevant cognitive barriers/biases?
-Formulate the appropriate decision or action based solely on the above analysis
of these obligations
6.Consider your character and integrity :
-Consider what your relevant community members would consider to be the kind
of decision that an individual of integrity would make in this situation.
-What specific virtues are relevant in the situation?
-Disclosure rule – what would you do if the New York Times reported your action
and everyone was to read it.
-Think about how your decision will be remembered when you are gone.
-Did you consider any relevant cognitive biases/barriers?
-What decision would you come to based solely on character consideration.
7.Think creatively about potential actions:
-Be sure you have not been unnecessarily forced into a corner
-You may have some choices or alternatives that have not been considered
-If you have come up with solutions “a” and “b,” try to brainstorm and come up
with a “c” solution that might satisfy the interests of the primary parties involved
in the situation.
8.Check your gut :
-Even though the prior steps have argued for a highly rational process, it is
always good to “check your gut.”
-Intuition is gaining credibility as a source for good decision making – knowing
something is not “right.”
-Particularly relevant if you have a lot of experience in the area – expert
decision-making
9.Decide on the proper ethical action and be prepared to deal with
opposing arguments:
- Consider potential actions based on the consequences, obligations, and
character approaches.
- Do you come up with similar answers from the different perspectives?
- Do the obligation and character help you “check” the consequentialist preferred
action?
- How can you protect the rights of those involved (or your own character) while
still maximizing the overall good for all of the stakeholders?
- What arguments are most compelling to you to justify the action ethically? How
will you respond to those with opposing viewpoints?
10. Implement decision(take corrective action):
At last we have to implement plan, and be ready for alternative solution or it may
happen we can’t get result according to our expectation then ready to change it
and if plan not works find out deviation and take corrective action.
Explain Difference between Ethics & Value
Points Ethics
Meaning Ethics refers to the guidelines for
conduct, that address question
about morality
What are System of moral principles
they
Consistency Uniform
Tells What is morally correct or
incorrect, in the given situation
Determines Extent of rightness or wrongness
of our options
What it Constrains
does
Ethics are the set of rules that
govern the behaviour of a
- person, established by a group or
culture
when we have to make a choice
between two things, wherein
- ethics determine what is right
Value
Value is defined as the
principles and ideals, that helps
them in making judgement of
what is more important.
Stimuli for thinking
Differs from person to person
What we want to do or achieve
Level of importance
Motivates
Values refer to the beliefs for
which a person has an
enduring preference.
when we have to make a
choice between two things,
wherein values determine what
is important