You are on page 1of 20


from Greek word Ethicos meaning Character or Manners

of character of a person expressed as right or wrong conduct or action. of moral principles prescribing code, explains what is good and right, or bad and wrong.



Character of a man

Decided by

Conduct of a person

Leads to

Series of Actions

Taken together Considered As

Good or Bad, Right or wrong, Moral or Immoral

By which we can Judge again Moral Standards

Known as Moral Judgement


Studies human behavior and makes evaluative assessment about them as moral or immoral Establishes moral standards and norms of behavior Makes judgment upon human behavior based on these standards and norms Prescribes moral behavior and makes recommendations about how to or how not to behave

Expresses an opinion or attitude about human conduct in general

comprises According

principles and standards that guide behavior in the world of business to John Donaldson Business Ethics can be described as the systematic study of moral (ethical) matters pertaining to business, industry or related activities, institutions, or practices and beliefs. It is the systematic handling of values in business and industry.

Unitarian View: Business & morality cannot be separated and it must play by the rules of ethics of the community.

Moral Structure


Moral Ethics


by Adam Smith and Milton Friedman: Business is a distinct entity and does not include ethics and morality



Proposed by Talcott Parsons

Government Law


Morality & Ethics

Market Systems

Business Ethics


When business people speak about business ethics they usually mean one of three things: 1. Avoid breaking the criminal law in ones work related activity 2. Avoid action that may result in civil law suits against the company 3. Avoid actions that are bad for the company image

Businesses are especially concerned with these three things since they involve loss of money and company reputation.

Relationship between law and moral standards

Laws and moral standards overlap to a certain extent Law represents a minimum set of standards for producing a desired human behaviour Ethics often represents a standard that exceeds the legal minimum
Frequent Overlap



lying and withholding needed information abusive or intimidating behavior misreporting time worked discrimination and sexual harassment stealing breaking environmental and safety laws falsifying records drug or alcohol abuse

giving or accepting bribes

belief that nothing will be done

fear of retaliation fear of being viewed as a troublemaker


is a subsystem of society
all stakeholders concerned

Empowers Reduction

in cost of friction with social environment Important for organizations leaders because they influence the ethical climate for the rest.

Personal gain
Individual values widely differ with organizational goals

Managers values and attitudes

Competitive pressures Cross-Cultural contradictions

Fellow Workers


Regions of Country



The Individual
Conscience Friends Employer

The Law

Religious Beliefs

Society at Large



Key features of effective ethics training programs

Top management support. Open discussion. A clear focus on ethical issues. Integration of ethics into the organization. A mechanism for anonymously reporting ethical violations. Reward ethical conduct.


The reporting of perceived unethical matters. Reducing the fear of retaliation against whistleblowers
Anonymous hotlines and web sites Personal, confidential guidance



An ethics specialist who plays a role of critical questioner in top-managements decision-making. Serves as the Board of directors social conscience. Helps prevent groupthink and blind conformity


of Ethics

Published statement of moral expectations for employee conduct Requirements for an effective ethics code
Must describe specific practices as unethical (e.g., kickbacks, payoffs, gifts, falsification of records, and misleading product claims). Must be firmly supported and fairly enforced by top management.