Business Ethics

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Introduction
Business Ethics ‡ Public¶s interest in business ethics increased during the last four decades ‡ Public¶s interest in business ethics spurred by the media

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Introduction
Inventory of Ethical Issues in Business ‡ ‡ ‡ ‡ ‡ Employee-Employer Relations Employer-Employee Relations Company-Customer Relations Company-Shareholder Relations Company-Community/Public Interest

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Public¶s Opinion of Business Ethics
‡ To understand public sentiment towards business ethics, ask three questions
± Has business ethics really deteriorated? ± Are the media reporting ethical problems more frequently and vigorously? ± Are practices that once were socially acceptable no longer socially acceptable?

4

Business Ethics: What Does It Really Mean?
Business Ethics:Today vs. Earlier Period
Society¶s Expectations of Business Ethics Ethical Problem Actual Business Ethics

Ethical Problem

1950s

Time

Early 2000s
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Business Ethics: What Does It Really Mean?
Definitions
‡ Ethics involves a discipline that examines good or bad practices within the context of a moral duty ‡ Moral conduct is behavior that is right or wrong ‡ Business ethics include practices and behaviors that are good or bad
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Meaning of Ethics
Character Of a Man Conduct of a person Series of action

Good or Bad

Moral standard

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Nature of Ethics
Deals with Human Conduct Concept Of Ethics

Nature of Ethics Science of Ethics Study of Ethics

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Need of Business Ethics
‡ Business operates within the society ‡ Every business irrespective of size exists more on ethical means or in total regard to its social concern to survive ‡ Business needs to function as responsible corporate citizen in the country.

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Factors Influencing Business Ethics
Individual Characteristics

Culture Nature of Ethics Leadership

Environment

Strategy and performance

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Objectives of Ethics 
Study of human behaviour.  Establishes moral standard/norms of behaviour.  Makes judgment on human behaviour based on these norms.  Prescribes moral behaviour  Express an opinion or attitude about human conduct in general.
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Scope of Business Ethics
Personal level Societal level Stakeholder level Scope of Business Ethics

Internal Policy level

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Different Ethical Practices of People
Ethics Moral Standard Value System of people

Their background

D I F F E R E N T

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Characteristics of an Ethical Decision
Equitable Right

Just

Characteristics Needed for a Ethical decision

Good

Proper

Right

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Business Ethics: What Does It Really Mean?
Two Key Branches of Ethics
‡ Descriptive ethics involves describing, characterizing and studying morality
± ³What is´

‡ Normative ethics involves supplying and justifying moral systems
± ³What should be´

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Conventional Approach to Business Ethics
‡ Conventional approach to business ethics involves a comparison of a decision or practice to prevailing societal norms
± Pitfall: ethical relativism

Decision or Practice Norms

Prevailing

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Sources of Ethical Norms
Fellow Workers Fellow Workers Regions of Country

Family The Individual Conscience Friends

Profession

Employer

The Law

Religious Beliefs

Society at Large

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Ethics and the Law
‡ Law often represents an ethical minimum ‡ Ethics often represents a standard that exceeds the legal minimum
Frequent Overlap

Ethics

Law

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Making Ethical Judgments
Behavior or act that has been committed compared with Prevailing norms of acceptability

Value judgments and perceptions of the observer

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Ethics, Economics, and Law

6-14

Four Important Ethical Questions
‡ What is? ‡ What ought to be? ‡ How to we get from what is to what ought to be? ‡ What is our motivation for acting ethically?

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3 Models of Management Ethics
1. Immoral Management²A style devoid of ethical principles and active opposition to what is ethical. 2. Moral Management²Conforms to high standards of ethical behavior. 3. Amoral Management
± Intentional - does not consider ethical factors ± Unintentional - casual or careless about ethical considerations in business
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3 Models of Management Ethics
Three Types Of Management Ethics

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Three Approaches to Management Ethics

6-18

Three Models of Management Morality and Emphasis on CSR

6-19

Moral Management Models and Acceptable Stakeholder Thinking

6-20

Making Moral Management Actionable
Important Factors
‡ Senior management ‡ Ethics training ‡ Self-analysis

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Developing Moral Judgment

6-22

Developing Moral Judgment

6-23

Developing Moral Judgment
External Sources of a Manager¶s Values
‡ ‡ ‡ ‡ ‡ Religious values Philosophical values Cultural values Legal values Professional values
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Developing Moral Judgment
Internal Sources of a Manager¶s Values
‡ ‡ ‡ ‡ ‡ Respect for the authority structure Loyalty Conformity Performance Results
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Elements of Moral Judgment
‡ ‡ ‡ ‡ Moral imagination Moral identification and ordering Moral evaluation Tolerance of moral disagreement and ambiguity ‡ Integration of managerial and moral competence ‡ A sense of moral obligation
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Elements of Moral Judgment
Amoral Managers Moral Managers

Moral Imagination Moral Identification Moral Evaluation Tolerance of Moral Disagreement and Ambiguity Integration of Managerial and Moral Competence A Senses of Moral Obligation
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