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UNIT : 1
INTRODUCTION
WHAT IS ETHICS?
Business ethics refers to the principles and standards that guide behavior in the
world of business. It involves making decisions that consider the impact on
various stakeholders, including customers, employees, suppliers, and the
community. Ethical business practices encompass honesty, integrity, fairness, and
social responsibility. Adhering to ethical standards helps build trust, maintain a
positive reputation, and contribute to the overall well-being of both the business
and society.
NATURE OF BUSINESS ETHICS:-
The nature of business ethics revolves around the study and application of moral
principles within the business context. It involves examining the values and
principles that guide decision-making and behavior in the business environment.
Key aspects of the nature of business ethics include integrity, honesty, fairness,
accountability, and consideration of the impact of business actions on various
stakeholders.
- Moral Principles: Business ethics is centered on the study and application of
moral principles within the business realm.
- Decision-Making Guidance: It provides a framework for decision-making,
emphasizing values such as integrity, honesty, and fairness.

- Stakeholder Consideration: The nature of business ethics involves considering

the interests and well-being of various stakeholders, including customers,
employees, suppliers, and the community.
- Dynamic and Adaptive: Business ethics is dynamic, evolving with societal norms
and cultural values, adapting to changing perspectives on responsible business
conduct.

- Accountability and Responsibility: It emphasizes accountability for actions and

the responsibility of businesses to contribute positively to both their internal
operations and the external environment.
- Reflects Ethical Dilemmas: Business ethics addresses ethical dilemmas that may
arise in the course of business operations, challenging decision-makers to
navigate complex situations ethically.

- Contribution to Well-being: Ultimately, business ethics aims to contribute to

the overall well-being of the organization and the broader community by
promoting ethical behavior and responsible business practices.
SCOPE OF BUSINESS ETHICS:-
- Functional Areas: The scope of business ethics extends across various
functional areas of business, including marketing, finance, human resources, and
operations.
- Corporate Governance: It involves principles and practices related to corporate
governance, ensuring transparency, accountability, and ethical conduct in
decision-making at the highest levels of an organization.

- Stakeholder Relations: Business ethics encompasses the ethical treatment of

stakeholders, considering the interests of customers, employees, suppliers,
investors, and the broader community.
- Compliance and Legal Standards: It includes adherence to laws and regulations,
with a focus on legal standards as a baseline for ethical business behavior.

- Environmental and Social Responsibility: Business ethics extends to

environmental sustainability and social responsibility, encouraging businesses to
consider their impact on the environment and society.
- Global Perspective: With the increasing globalization of business, ethics
extends globally, addressing cross-cultural differences and promoting ethical
standards in international business practices.

- Decision-Making Processes: It guides decision-making processes, helping

businesses navigate ethical dilemmas and make choices that align with moral
principles.
- Codes of Conduct: The scope of business ethics involves the development and
implementation of codes of conduct and ethical guidelines within organizations.

In summary, the scope of business ethics is broad and includes considerations

across different business functions, relationships with stakeholders, adherence
to legal standards, and a commitment to environmental and social responsibility.

FACTS AND VALUES OF BUSINESS ETHICS:-

- *Facts*:
1. *Legal Compliance*: Adhering to laws and regulations is a factual aspect of
business ethics, ensuring businesses operate within legal boundaries.
2. *Stakeholder Interests*: Recognizing and addressing the diverse interests of
stakeholders, including employees, customers, and the community, is a factual
consideration in ethical decision-making.
3. *Corporate Governance Structures*: The establishment and adherence to
corporate governance structures within organizations contribute to the factual
implementation of ethical practices.
4. *Environmental Impact*: Acknowledging and mitigating the environmental
impact of business operations, such as carbon emissions or waste disposal, is a
factual dimension of ethical business conduct.

- *Values*:
1. *Integrity and Honesty*: Upholding principles of integrity and honesty in
business transactions and communications is a core value of business ethics.
2. *Fairness and Equity*: Valuing fairness and equity in dealings with employees,
customers, and partners promotes ethical behavior within an organization.
3. *Responsibility and Accountability*: Emphasizing responsibility for the
consequences of business actions and holding individuals and organizations
accountable aligns with ethical values.
4. *Social Responsibility*: The value of social responsibility involves businesses
contributing positively to society, supporting community initiatives, and
addressing societal issues.
Facts in business ethics often revolve around compliance with established
standards, while values highlight the ethical principles and virtues that guide
behavior and decision-making within the business context.

ETHICAL SUBJECTIVISM AND RELATIVISM :-

- *Ethical Subjectivism*:
- Definition: Ethical subjectivism is the view that the truth or falsity of moral
statements is subjective and varies from person to person. In other words,
ethical judgments are based on individual feelings, beliefs, or opinions.
- Perspective: From an ethical subjectivist standpoint, what is morally right or
wrong depends on an individual’s personal perspective or cultural background.
- *Ethical Relativism*:
- Definition: Ethical relativism is the idea that moral principles are not universally
applicable; instead, they are relative to specific cultures, societies, or historical
contexts.
- Cultural Variation: Ethical relativism acknowledges that what is considered
morally acceptable may differ across cultures, and there is no absolute standard
for moral judgment.
- Challenges: Critics argue that ethical relativism may lead to moral relativism,
where any action could be deemed morally acceptable within a particular
cultural framework, potentially undermining the concept of universal human
rights.
In summary, ethical subjectivism focuses on individual perspectives, while ethical
relativism extends this idea to cultural and societal contexts, positing that moral
truths are contingent upon cultural or individual beliefs. Both positions challenge
the notion of universal moral principles.

What Is Moral Development?

Moral development is the process by which people develop the distinction
between right and wrong (morality) and engage in reasoning between the two
(moral reasoning).
Level 1. Preconventional Morality
Stage 1 (Obedience and Punishment):
Stage 2 (Individualism and Exchange):

Level 2. Conventional Morality

Stage 3 (Developing Good Interpersonal Relationships):
Stage 4 (Maintaining Social Order):

Level 3. Postconventional Morality

Stage 5 (Social Contract and Individual Rights)
Stage 6 (Universal Principles):

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