BUSS 207 BUSINESS AND IT ETHICS

BUSS 207 BUSINESS AND IT

ETHICS
 BUSS 207 BUSINESS AND IT ETHICS

Copyright
All rights reserved. No unauthorised reproduction of this manual or part thereof in any
form is allowed.

1
 BUSS 207 BUSINESS AND IT ETHICS

About this STUDY MANUAL

BUSS 207 BUSINESS AND IT ETHICS, has been produced by .

All Modules produced by are structured in the same way, as
outlined below.

How this STUDY MANUAL is structured

The course overview

The course overview gives you a general introduction to the course.
Information contained in the course overview will help you
determine:

 If the course is suitable for you.

 What you will already need to know.

 What you can expect from the course.

 How much time you will need to invest to complete the course.

The overview also provides guidance on:

 Study skills.

 Where to get help.

 Course assignments and assessments.

 Activity icons.

 CHAPTERs.

We strongly recommend that you read the overview carefully

before starting your study.

The course content

The course is broken down into CHAPTERS. Each CHAPTER

2
 BUSS 207 BUSINESS AND IT ETHICS

comprises:

 An introduction to the CHAPTER content.

 CHAPTER outcomes.

 New terminology.

 Core content of the CHAPTER with a variety of learning

activities.
 A CHAPTER summary.
 Assignments and/or assessments, as applicable.
Resources
For those interested in learning more on this subject, we provide
you with a list of additional resources at the end of this STUDY
MANUAL; these may be books, articles or web sites.
Your comments
After completing Business and IT Ethics, we would appreciate it if
you would take a few moments to give us your feedback on any
aspect of this course. Your feedback might include comments on:

 Course content and structure.

 Course reading materials and resources.

 Course assignments.

 Course assessments.

 Course duration.

 Course support (assigned tutors, technical help, etc.)

Your constructive feedback will help us to improve and enhance

this course.

3
 BUSS 207 BUSINESS AND IT ETHICS

Course overview

Introduction
Businesses deal with people, and with people come ethical dilemmas which can be everyday
problems or more abstract problems, or the ethical status of the industry, or system, one is involved
in.This course introduces students to ethics-related aspects of the business decision-making
process. Business ethics is the application of our understanding of good practices in technology
transactions, business activities and other business pursuits. The course aims to instruct the student
on: defining business ethics and explaining the structure and role of professional institutions and
codes of conduct and practice appropriate to professionals, discussing the relevance of ethical
principles in business and at the workplace, ethical theories and frameworks, corporate governance,
ethics and external exchanges customers as well as the local and wider community. It is expected
that after completing this course the student will appreciate the relevance of ethical practices in
business.
The whole course unit is composed of twelve lectures with relevant case studies to support the
student to demonstrate and show understanding and appreciation of the business ethics.

Objectives
By the end of this unit you should be able to:
At the end of the course, the student should be able to:
1. Identify the rights, duties and responsibilities of, and relationships between, organizations
and their internal (employees) and external stakeholders (customers, local and wider
communities).
2. Apply the core concepts of ethical thinking and ethical management practice.
3. Judge the appropriateness and impact of being a socially responsible organization.

4
 BUSS 207 BUSINESS AND IT ETHICS

COURSE CONTENT
1. Introduction to business ethics
2. Ethical theories and frameworks, use of case studies to relate to ethical theory
3. Ethical principles in business ,Ethics and the workplace
4. The nature of professionalism, Professional competence: ethical decency,
integrity, objectivity and independence, confidentiality, Professional codes of
ethics, Computer professional codes of ethics,
5. Computer ethics,
6. Ethical and legal use of software,
7. Ethical issues: conflicts of interest, whistle blowing
8. Ethics in advertising, publicity and solicitation,
9. Ethics and external exchanges customers, local and wider community,
globalisation
10. Ethics and corporate responsibility, corporate governance, The role of business
in society,
11. Corporate Social Responsibility

TABLE OF CONTENTS
Lecture 1: Title
1.1 Introduction
1.2 Specific Objectives
1.3 Lecture Outline
1.4 Lecture
1.5 End of lecture activities (self –tests)
1.6 Summary
1.7 Suggestion for further reading

5
BUSS 207 BUSINESS AND IT ETHICS

6
 BUSS 207 BUSINESS AND IT ETHICS

LECTURE ONE:
1.1 Introduction

Welcome to the first lecture on introduction to business ethics. In this lecture we shall introduce
various concepts relating to ethics and business.

1.2 Specific Objectives

At the end of the lecture you should be able to:

 Define business ethics

 Describe the relationship between business ethics and the law
 Distinguish between ethics and morality
 Explain the role of ethics in business

1.3 Lecture One Outline

1.3.1 Introduction to business ethics

1.3.2 Ethics and morality
1.3.3 Ethics and the law
1.3.4 Business ethics and its role

1.3.1 Introduction
To people many the terms business and ethics are contradictory concepts when put together.
Various scandals such as Enron, Anderson, WorldCom, Tyco and Hollinger have reinforced this
view. Undesirable business activities such as environmental pollution, payment of bribes,
exploitation of workers and deception of consumers have highlighted the unethical ways
companies conduct business.
However such malpractices don’t mean there are no values and principles in business practice. In
fact business practice would not be possible if corporate directors always lied, buyers and sellers
never trusted each other or employees didn’t work together.

1.3.2 Ethics and Morality

According to the dictionary, the term ethics has a variety of different meanings. One of its
meanings is: "the principles of conduct governing an individual or a group‖.
We sometimes use the term personal ethics, for example, when referring to the rules by which an
individual lives his or her personal life. We use the term accounting ethics when referring to the

7
 BUSS 207 BUSINESS AND IT ETHICS

code that guides the professional conduct of accountants.

A second—and more important—meaning of ethics, according to the dictionary, is: Ethics is
"the study of morality."Although ethics deals with morality, it is not quite the same as morality.
Ethics is a kind of investigation—and includes both the activity of investigating as well as the
results of that investigation—whereas morality is the subject matter that ethics investigates.

Ethics is derived from Greek Word ―Ethos‖ which means"character" that is used to describe the
guiding beliefs or ideals that characterize a community, nation, or ideology. Thus, it is a code of
conduct which has social acceptance.
Ethics are not universal and are derived from social values. Ethics keep changing from place to
place, group to group, country to country and time to time. What is considered ethical today may
have been considered unethical a few centuries back. What is ethical in one religious group may
be considered unethical in other group.
So, ethics are time and space dependent. Ethics are what you have learnt from the society
as right or wrong behavior .Ethics is the discipline that deals with that which is good or bad or
with moral duty and obligation. It is branch of philosophy considered as normative science.
Thus, ethics is a system of values, relating to human conduct and motives.

Another closely related word is ―Moral‖. The two are used almost as synonyms but there is a
subtle difference between the two. While ethics begin from the smallest issues, morality
generally addresses issues of grave consequences. We can define morality as the standards that
an individual or a group has about what is right and wrong, or good and evil.
1.3.2.1 Moral Categories.
Immoral are acts not permitted by morality; morally bad; in performing the action, you are doing
something morally wrong; examples of actions that are generally considered to be immoral are:
rape,
Morally permissible are acts permitted by morality; in performing the action, you are not doing
anything immoral.
There are three sub-categories of morally permissible action: obligatory, morally neutral, and
supererogatory:
1. obligatory : required by morality; if you don’t do it, then you’ve done something
immoral for example, saving the life of a baby who is drowning in two feet of water,
when doing so would pose no risk to your own life.
2. morally neutral : neither morally good nor morally bad; no moral value whatsoever
for example, tossing a piece of chalk up in the air and then catching it... doing so has
no consequences for anyone else and only trivial consequences for yourself; it violates
no one’s rights and in fact has nothing to do with anyone else at all.
3. supererogatory: going above and beyond what morality requires; you are not obligated
to do it, so in failing to do it, you would not be immoral; but you’ve done something

8
 BUSS 207 BUSINESS AND IT ETHICS

morally good if you do it for example, saving the life of a stranger who is drowning
100 yards from shore, in choppy water, when you have no training as a lifeguard and
doing so risks your own life.

Moral standards can be distinguished from non-moral standards using five characteristics:

 Moral standards deal with matters that can seriously injure or benefit humans. For
example, most people in society hold moral standards against theft, rape,enslavement,
murder, child abuse, assault, slander, fraud , and so on.
 Moral standards are not established or changed by authoritative bodies. The validity of
moral standards rests on the adequacy of the reasons that are taken to support and justify
them; so long as these reasons are adequate, the standards remain valid.
 Moral standards, we feel, should be preferred to other values, including self-interest.This
does not mean, of course, that it is always wrong to act on self-interest; it only means
that it is wrong to choose self-interest over morality
 Moral standards are based on impartial considerations. The fact that you will benefit
from a lie and that I will be harmed is irrelevant to whether lying is morally wrong.
 Moral standards are associated with special emotions and a special vocabulary (guilt,
shame, remorse, etc.)..

Ethics is the discipline that examines one's moral standards or the moral standards of a society.
It asks how these standards apply to our lives and whether these standards are reasonable or
unreasonable that is, whether they are supported by good reasons or bad reasons.

1.3.3 Law and Ethics

Ethics has often been misunderstood to be conforming to law.The law is a formal set of rules and
standards that is associated with significant legitimate power and authority (to inflict
punishment) in society. Ethics on the other hand, is far less formal – sometimes not even written
down set of values – which are to be observed morally.
Law of the land might change from time to time but ethics remain relatively constant over a
fairly long period of time.An ethical practice today might be coded into a law tomorrow.

1.3.4 Business ethics and its role

Business ethics are not different from ethics in normal sense.It concentrates on moral standards
as they apply to business policies, institutions, and behaviors.It is the study of business situations
, activities and decisions where issues of right and wrong are addressed.
Business Ethics is a study of moral standards and how these apply to the systems and

9
 BUSS 207 BUSINESS AND IT ETHICS

organizations through which modern societies produce and distribute goods and services, andto
the people who work within these organizations. Business ethics, in other words, is a form of
applied ethics. It includes not only the analysis of moral norms and moral values, but also
attempts to apply the conclusions of this analysis to that assortment of institutions, technologies,
transactions, activities, and pursuits that we call business.
As this description of business ethics suggests, the issues that business ethics covers encompass
a wide variety of topics.Though business ethics cover a variety of topics we can distinguish three
different kinds of issues that business ethics investigates.
1. Systemic issues ─Questions about the economic, political, legal, or other social systems
within which businesses operate. These include questions about the morality of capitalism or of
the laws, regulations, industrial structures, and social practices within which businesses operate.
2. Corporate issues ─Questions about a particular company. These include questions about the
morality of the activities, policies, practices, or organizational structure of an individual
company taken as a whole.
3. Individual issues ─ Questions about a particular individual within an organization and their
behaviors and decisions. These include questions about the morality of the decisions, actions, or
character of an individual.

The role of ethics in business has been gaining importance in the recent times due to
geographical spread, growing size of businesses and their ever growing capability to impact the
lives of millions and millions of people. It has also been highlighted by the colossal scams in
some businesses in recent times. The purpose of business is to earn profits. And almost every
business tries to maximise its profits. But the question that arises here is how much profit and at
what social and other costs?
Ethical conduct builds trust among individuals and in business relationships, which validates and
promotes confidence in business relationships. Establishing trust and confidence is much more
difficult in organizations that have established reputations for acting unethically.
There are good business reasons for a strong commitment to ethical values:
1. Ethical companies have been shown to be more profitable.
2. Making ethical choices results in lower stress for corporate managers and other employees.
3. Our reputation, good or bad, endures.
4. Ethical behaviour enhances leadership.
5. The alternative to voluntary ethical behaviour is demanding and costly regulation.
However there are also arguments against ethics in business
1. In a free market economy, the pursuit of profit will ensure maximum social benefit so
business ethics is not needed.
2. A manager’s most important obligation is loyalty to the company regardless of ethics.

10
 BUSS 207 BUSINESS AND IT ETHICS

3. So long as companies obey the law they will do all that ethics requires.

Case Example- (Business Ethics: Concepts and Cases, 7/e Velasquez, 2012)
―If it is legal, then it is ethical. For example, the managers at the financial company Goldman
Sachs recently were accused of helping Greece hide loans larger than European Union rules
allowed by disguising the loans as currency exchanges that legally did not have to be disclosed
as debt. Greece’s debt eventually got so huge that in 2010, it threw Greece and then the entire
European Union into a financial crisis. Goldman Sachs’ managers were accused of behaving
unethically because they helped Greece hide debt that was more than it could handle. But the
managers excused themselves with the statement that ―these transactions were consistent with
European principles [laws] governing their use and application at the time.‖ Since it was legal,
they were saying, it was ethical.‖ In your opinion was it ethical?

1.4 Activities
Activity One
Many Pharmaceutical companies have been often accused of unethical behaviour. They have been
accused of profiteering in the face of human suffering by charging exorbitant prices for their new
formulation. Is it premature to make a judgement in absence of concrete data about their
investments, risks and rewards?
Activity Two
Detect some of the ethical issues that may arise in business.

1.5 Self – Test Questions

1. Define business ethics and examine its importance.
2. Who determines whether a business activity is ethical?
3. Is unethical conduct always illegal?
4. Using examples differentiate between ethics, law and morality

1.6 Suggestions for further reading

Business Ethics: Concepts and Cases, 7/e Velasquez, 2012

1.7 References - Notes extracted form

1. Velasquez, M. G. (2001). Business Ethics Concepts & Cases, Business Ethics, Anderson
2. University DBA.Virtual University of Pakistan Business Ethics –MGT610
3. The Business Ethics Workshop accessed May 1 2014 URL: http://www.saylor.org/books

11
 BUSS 207 BUSINESS AND IT ETHICS

1.6 Summary

 Ethics is the discipline that deals with that which is good or bad or with moral duty and
obligation. It is branch of philosophy considered as normative science
 Morality as the standards that an individual or a group has about what is right and wrong, or
good and evil.
 The law is a formal set of rules and standards that is associated with significant legitimate
power and authority (to inflict punishment) in society. Ethics on the other hand, is far less
formal – sometimes not even written down set of values – which are to be observed morally
 Business Ethics is a study of moral standards and how these apply to the systems and
organizations through which modern societies produce and distribute goods and services,
and to the people who work within these organizations
 Ethical conduct builds trust among individuals and in business relationships, which
validates and promotes confidence in business relationships. Establishing trust and
confidence is much more difficult in organizations that have established reputations for
acting unethically.

12
BUSS 207 BUSINESS AND IT ETHICS

13