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Business Ethics

First Semester | Unit -1

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 Business Ethics
Unit-1 BBA First Semester

What is Ethics ?
Ethics refers to a code of conduct that guides an individual in dealing with
others.
Ethics is concerned with what is right & what is wrong in human behavior
The word Ethics is derived from Greek word - "Ethos" which means character,
and norms in a group or society.

What are Values ?

Values are the fundamental beliefs and moral principles that reflects in
someone's behavior.
Values of a person can depend on various factors such as family upbringing,
cultural background, personal experience and social influence.

What is Behavior ?
Behavior refers to physical or verbal, action or reaction of an individual in
response to various situations.
Behavior of a person can depend on various factors such as family upbringing,
emotions, cultural background, personal experience and social influence.

Ethics Values Behavior

Values are the Behavior refers to
Set of rules or guidelines fundamental beliefs physical or verbal,
that helps to form the and moral principles action or reaction of an
behavior of a person. that reflects in individual in response
someone's behavior. to various situations.
Ethics mostly applied & Values are mostly Behavior is mostly
reflected in Professional applied & reflected in reflected in day-to-day
Life personal life life
Values are influnced Behavior is influenced
Ethics are influenced by
by Religion, Culture, mainly by society,
Profession, Institution,
Community, Family, environment, personal
Organization etc.
Society etc experience etc.

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What is Business Ethics
Business ethics refers to the set of principles and values that governs an entity
and its business activities.
Business ethics is about doing the right thing in business, even when it's not
legally required.

Importance of Ethics in Business

Ethics in business builds trust with customers, leading to long-lasting
relationships.
It ensures fair treatment of employees, fostering a positive work environment.
Ethical practices enhance a company's reputation and brand value.
Business ethics help in compliance with legal regulations, reducing legal risks.
Ethical decision-making prevents harmful consequences for society and the
environment.
It encourages responsible use of resources, promoting sustainability.
Ethical businesses tend to attract ethical investors and partners.
High ethical standards can lead to increased customer loyalty and repeat
business.
Ethical behavior in business promotes employee morale and productivity.
It contributes to the overall well-being and harmony of society.

Development of Ethics
The development of ethics is a complex process that involves how one can
develop ethics, and how ethics are developed in an individual.
This process is influenced by various factors such as individual values, societal
norms, cultural, and personal experiences, social media etc.

Relevance of Ethics in Business

Ethical Decision Making: Ethical decision making ensures that business practices
align with values such as honesty, fairness, and integrity. Ethical decision making
helps businesses avoid unethical behavior that can lead to legal troubles, damage
to reputation, and long-term negative consequences.
Build Trust & Transparency (Brand Reputation): When a business consistently
makes ethical decisions, it establishes a foundation of trust between the
company, its employees, and its stakeholders. This trust leads to customer
loyalty, positive word-of-mouth, and increased sales. A strong brand reputation
attracts customers.
Employee Morale & Employee Engagement: Ethical business practices
contribute significantly to a positive work environment. Employees who perceive
that their organization operates ethically are more engaged, motivated, and likely
to stay with the company long-term. Ethical treatment of employees includes fair
compensation, equal opportunities, and a safe, respectful workplace.

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 Stakeholders Relationship: Ethical behavior in business helps in maintaining
strong relationships with stakeholders which is essential for long-term success.
When businesses prioritize ethical practices, they are more likely to collaborate
effectively with stakeholders, resolve conflicts, and build partnerships that
benefit all parties.
Long-Term Sustainability: Ethics in business ensure long-term sustainability by
promoting responsible resource management and environmental stewardship,
reducing legal and reputational risks, and fostering strong relationships with
stakeholders, all of which contribute to a resilient and enduring business model.

Arguments against Business Ethics

Business ethics can add extra costs to a company, making products and
services more expensive.
Strict ethical rules may limit a business's ability to compete in a tough market.
Ethical decisions can slow down business processes, affecting efficiency.
Some argue that businesses should focus on profits and not be responsible for
solving social problems.
Ethical standards can vary widely, causing confusion and disagreements.
Businesses might face pressure to compromise ethics in order to survive or
grow.
Excessive ethical regulations can discourage entrepreneurship and small
business growth.
Ethical considerations can be subjective and vary between individuals.
It's challenging to enforce business ethics consistently across all industries.
In a global economy, different countries have diverse ethical norms, creating
complexities for international business operations.

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