Role of Ethics in Business

By Kiran Shet

1

1

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 
   

EmployeeEmployee-Employer Relations EmployerEmployer-Employee Relations CompanyCompany-Customer Relations CompanyCompany-Shareholder Relations CompanyCompany-Community/Public Interest
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Public¶s Opinion of Business Ethics  

Gallup Poll finds that only 17 percent to 20 percent of the public thought the business ethics of executives to be very high or high 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?
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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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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 Prevailing Norms

Decision or Practice

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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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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

3 Models of Management Ethics
Three Types Of Management Ethics

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3 Models of Management Ethics
1.

2.

3.

Immoral Management²A style devoid of Management² ethical principles and active opposition to what is ethical. Moral Management²Conforms to high Management² standards of ethical behavior. Amoral Management 


Intentional - does not consider ethical factors Unintentional - casual or careless about ethical considerations in business
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Three Approaches to Management Ethics

6-18

Making Moral Management Actionable
Important Factors 
 

Senior management Ethics training SelfSelf-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
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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Questions??

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