You are on page 1of 15

Business Ethics

Questionable Ethical Standards

A growing number of normal businesses are coming into question Weapons sales Nuclear technology Land mines Infected blood products White collar crime Discrimination against women & minorities Price fixing Bid rigging Drugs Asbestos Cigarettes Alcohol

Comparison of Business Ethics and Social Responsibility

Business Ethics Refers to the principles and standards that define acceptable conduct in the world of business. Social Responsibility
Refers to a businesss obligation to maximize its positive impact and minimize its negative impact on society.

Ethical Issue Categories

Conflict of interest Fairness and honesty Communications Business relationships

Factors Influencing Managerial Ethics

Individual Factors
Work Background Family Status

Organizational Factors
Top Level Management Philosophy The Firms Reward System Job Dimensions

Environmental Factors
Economic Conditions Social and Cultural Institutions Competition


Codes of Ethics
Formalized rules and standards that describe what a company expects of its employees

Framework for Ethical and Moral Decision making

1. Recognize a Moral issue 2. Get the facts 3. Evaluate the alternatives from various moral perspectives 4. Make a decision 5. Act, then reflect on the decision later

Objectives of Ethics
Ethics studies human conduct and evaluates these as moral or immoral and right or wrong and good or bad. Ethics sets moral standards and norms for human behaviour. Ethics evaluates past behaviour against standards and norms and then makes judgment upon human behaviors as right or wrong and moral or immoral. Ethics prescribes moral standard behaviour and also provides solution about how to behave in a given specific situation.

Characteristics of Moral Standards

Moral standards deals with matters we think of serious consequences for human well being. Moral standards cannot simply be established or changed by the law or authority. Moral standard override self interest . Moral standards are based on impartial considerations. Moral standards are associated with special moral vocabulary.


Top management must adopt & unconditionally support an explicit corporate code of conduct. Employees must understand that ethical behavior begins at the top & that senior management expects all employees to act accordingly Managers & others must be trained to consider the ethical implications of all business decisions An ethics office must be set up. Outsiders must be told about the ethic program. The ethics code must be enforced

Ten Moral Rules/Commandments

Dont kill Dont cause pain Dont disable Dont deprive of freedom Dont deprive of pleasure Dont deceive Keep your promise Dont cheat Obey the law Do your duty

Questions to Consider in Determining Whether an Action is Ethical Are there any potential legal restrictions or violations that could result from the action? Does you company have a specific code of ethics or a policy on the action? Is this activity customary in your industry? Are there any industry trade groups that provide guidelines or codes of conduct that address this issue?

Branches of Ethics
Normative Ethics Meta Physics Applied Ethics Moral Ethics Descriptive Ethics

Normative ethics: Deals with how individuals can decide the correct moral action that they should take in a given situation of ethical nature.( Two philosophers Socrates and John stuart mill) Meta ethics: Understand the nature of ethical properties and judgments such as true values can be found and theory behind moral principles. Applied ethics: It deals with ethical theories developed by various philosophers in our every day of life. Ex: Should you turn in your friend at workplace for taking home office supplies? Is it right have an abortion ?

Moral ethics: The branch of ethics raises questions like: How people develop their morality? Why certain aspects of morality differ across cultures? Why certain aspects of morality are generally universally applicable? Descriptive ethics: This branch of ethics focuses on application aspect of ethics. Speaking alternatively, this branch of ethics studies how people actually conduct in real world, rather than attempts to just theorize about how people should conduct in their day to day affairs.