Business Ethic

Dr. Htay Htay

Associate Professor
Business and Economics Department
Two Import words : Business and Ethics
➢Business ethics is a combination of two important words : Business and
Ethics.
❖ Business
• is any organized activity by an individual and organization to produce and
sell, a profit goods and services that the need of societies .
❖ Ethics
• on the other hand is about one’s ability to differentiate right from wrong.
• Put together, business ethics is a form of applied ethics or professional
ethics that examines ethical principles and moral or ethical problems that
arise in a business environment .
• Business Ethics has an overarching effect on business, Individual and
entire organization.
Moral value and Ethics
• The two key terms- moral values and ethics- that are essential to
understanding the nature of ethical behavior in organizations .
• When social scientists speak of moral vales (usually more simply
referred to as moral), they are referring to people’s fundamental
beliefs regarding what is right or wrong, good or bad.
• One of the most important sources of moral value is the religious
background, beliefs and train we receive. Although people’s moral
values may differ, several are widely accepted.
• For example, most people believe that being charitable to
someone in need is right where as killing an innocent person is
wrong.
• Based on these beliefs, people are guided in ways that influence
the decisions they make and the actions in which they engage.
These standards are referred to as ethics.
Ethics

• It refers to standards of conduct that guide people’s decision and behavior.

• (e.g., not stealing from others).
• Most organizational scientists acknowledge that it is not a company ‘s
place to teach employees moral values. After all, these come with people as
they enter the workplace. However,
• It is a company’s responsibility to set clear standards of behavior and to
train employees in recognizing and following them.
• Just as organizations prescribe other kinds of behavior that are expected in
the workplace . (e.g., when to arrive and leave), so too should they
prescribe appropriate ethical behavior (e.g., how to complete expense
reports and what precise is considered a bribe).
Business Ethics
• Business Ethics refers to the study of people’s tendencies to behave
in morally appropriate ways in organizations. It is sometimes
called corporate ethics.
• It also be defined as the written and unwritten codes of principles
and values determined by an organization’s culture that govern
decisions and actions within that organization.
• It has an overarching effect as it applies to aspects of business
conduct on behalf of both individuals and the entire company.
 Business ethics
Introduction
• Business ethics is a form of applied ethics or professional ethics
that examines ethical principles and moral or ethical problems
that arise in a business environment.
• Business ethics comprises organizational principles, values, and
norms that may originate from individuals, organizational
statements, or from the legal system that primarily guide
individual and group behavior in business.
• It applies to all aspects of business conduct and is relevant to the
conduct of individuals and entire organizations.
Principles, Values
Principles
are specific and pervasive boundaries for behavior that
should not be violated. Principles often become the basis for rules.
• Some examples of principles could include human rights, freedom of
speech, and the fundamentals of justice.
Values
are enduring beliefs and ideals that are socially enforced.
• Several desirable or ethical values for business today are teamwork,
trust, and integrity. Such values are often based on organizational or
industry best practices.
• Investors, employees, customers, interest groups, the legal system, and
Ethics

➢Ethics is defined as behavior or decisions made within

a group’s values.

In our case,

➢We are discussing decisions made in business by

groups of people that represent the business
organization.
Why is it important?
Ethics influence and contribute to:
• Employee commitment
• Investor and customer loyalty and confidence.
• Legal problems and penalties.
• Customer satisfaction.
• The ability to build relationships with stakeholders.
• Cost control.
• Performance, revenue, and profits.
• Reputation and image
 Why study business ethics?
Business ethics has become a major concern in business today.
Decreased trust
leads to a reduction in customer satisfaction and
customer loyalty, which in turn can negatively impact the firm
or industry.
There is no doubt negative publicity associated with
major misconduct lowered the public’s trust in certain business
sectors.
➢ There are a number of ethical issues that must be addressed to
prevent misconduct.
▪ Mis-use of company resources,
▪ abusive behavior,
▪ harassment,
▪ accounting fraud, conflicts of interest,
▪ defective products,
▪ bribery,
▪ product knockoffs, and employee theft
are all problems cited as potential risk areas.
Every organization has the potential for unethical behavior.

➢Whether correct or not, that judgment directly

affects a company’s ability to achieve its business
goals.

➢For this reason alone, it is important to understand

business ethics and recognize ethical issues.
 The Reasons for Studying Business Ethics

➢ Business ethics is more than an extension of an individual’s own

personal ethics.
➢An individual’s personal moral values are only one factor
in the ethical decision-making process.
➢Business must deal with individuals’ personal moral dilemmas
because such dilemmas affect everyone’s ability to function on the
job.
Normally,
• a business does not dictate a person’s morals. Such
policies would be illegal.
• Only when a person’s morals influence his or her
performance on the job does it involve a dimension
within business ethics.
• Just being a good person and having sound personal
values may not be sufficient to handle the ethical issues
that arise in a business organization.
Con’t
• Although truthfulness, honesty, fairness, and openness are often
assumed to be self-evident and accepted,
• business-strategy decisions involve complex and detailed
discussions.
• A person’s experiences and decisions at home, in school, and in
the community may be quite different from his or her experiences
and decisions at work.
• Many business ethics decisions, managerial responsibility and
ethical leadership for the conduct of other
requires knowledge of ethics and
compliance processes and systems.
Principles for Positive Business Ethics
• Business Ethics are built on Personal Ethics.
• Business Ethics are based on Fairness.
• Business Ethics require Integrity.
• Business Ethics Truth-telling
• Business Ethics require a Business Plan
• Business Ethics apply Internally and Externally
• Business Ethics require a Profit
• Business Ethics are values-based
• Business Ethics come from the Boss
 Common Types of Ethical Issues
within organizations

• Health and Safety

•Technology
•Transparency
•Fair Working Conditions
Factors highlighting
the Importance of business ethics
• Long-term growth
• Cost and risk reduction
• Anti-capitalist sentiment
• Limited resources
• Ethics lays the strategic decision –making
• They increase employee retention
• An ethical business attracts investors
• Ethical practices help in building and maintaining reputation
Characteristics of Business Ethics

• A Discipline
• Ancient Concept
• Personal Dignity
• Related to Human Aspect
• Study of Goals and Means
 Conclusion
➢Ethics are the building block of our society and thus should be
the building block of our corporations.
Henry Kravis states,
▪ “If you build that foundation, both the moral and the ethical
foundation, as well as the business foundation…then the building
won’t crumble.” It is essential not to let greed cloud judgment.
President G W. Bush said,
▪ At this moment, America;s highest economic need is higher
ethical standards- standard enforced by strict laws and upheld by
responsible business leaders.
Robert D. Hass, former chairman of Levi Strauss Co.,
▪ Posited that “ A company’s values what it stands for, what
its people believe in – are crucial to its competitive success .”