Business

Ethics
 ORIGIN OF THE WORD
‘ETHICS’
Origin from the Greek Word

‘ethikos’
and Latin word
‘ethicus’

Which means human character and conduct.

 DEFINITION OF ETHICS
Webster’s collegiate thesaurus defines the word
‘ethics’ as
 The code of conduct governing an individual or a
group.
 The discipline dealing with good and bad with
moral duty and obligation.
 The complex of ideals, beliefs or standards that
characterizes a group, community or people.
 The group of moral principles or set of values.
 ETHICS v/s MORALITY
Ethics concerned with
actions that are proper or improper,
conduct that is right or wrong,
decisions that are fair or unfair.

Morality varies from

individual to individual because the values
and cultural traits of individuals may
differ. Further, what is moral according to
one person may be immoral according to
another.
 NATURE OF ETHICS

 It is a subject that deals with human

beings.
 It is more a science than an art.
 It is a normative science.
 It deals with human conduct that is
voluntary and not forced.
 OBJECTIVES OF ETHICS
 To assess whether a particular act or decision
taken by an individual is moral or not.
 To establish moral standards and norms of the
behavior.
 To judge human behavior based on these
standards and norms.
 To assess human behavior and express an
opinion or attitude about the behavior.
 To set a standard or code for the moral behavior
and make recommendations about the desired
behavior.
CONCEPT OF BUSINESS
ETHICS
1. Business ethics refers to the application
of ethical judgements to business
activities.
2. Business ethics concerns itself with what
is right or wrong in the workplace.
3. It explains that business can generate
profits being ethical.
 DEFINITION OF
BUSINESS ETHICS
Laura Nash defined business ethics as
“ the study of how personal moral norms
apply to the activities and goals of
commercial enterprise. It is not a separate
moral standard, but the study of how the
business context poses its own unique
problems for the moral person who acts as
an agent of this system.”
 NATURE OF BUSINESS
ETHICS
An ideal ethical decision comprises of
following virtues:
 Right – Morally correct
 Equitable – Just and equal
 Good – Highest good for all concerned
 Proper – Appropriate and acceptable
 Fair – Honesty
 Just – Action
NEED FOR BUSINESS
ETHICS
All businesses exist and operate within
society and therefore they should
contribute towards the welfare of the
society. To survive in the market,
businesses should gain loyal customers
and perform social responsibility .
 SIGNIFICANCE OF
BUSINESS ETHICS
The role of business ethics in performance

Employee
Commitment and
Trust

Ethical Investor
Loyalty Profits
Climate and Trust

Customer
Satisfaction
and Trust
 ETHICS
CONTRIBUTES TO
EMPLOYEE
COMMITMENT
 ETHICS
CONTRIBUTES TO
INVESTOR
LOYALTY
 ETHICS
CONTRIBUTES TO
CUSTOMER
SATISFACTION
 ETHICS
CONTRIBUTE TO
PROFITS
Most of all learning to
think, reason and act
ethically is one of the
benefit of business
ethics.
ARGUMENTS FOR
AND AGAINST
BUSINESS
ETHICS
 ARGUMENTS
SUPPORTING ETHICS IN
BUSINESS
 Ethics applies to all human activities.
 Business cannot survive without ethics.
 Ethics is consistent with profit seeking.
 Prisoner’s dilemma argument.
 Customers and employees care about
ethics.
 OBJECTIONS TO
BRINGING ETHICS INTO
BUSINESS
 In a free market economy, the pursuit of
profit will ensure maximum social benefit.
 A manager's most important obligation is
to the company.
 Business ethics is limited to obeying the
law.
FRAMEWORK
FOR STUDYING
BUSINESS
ETHICS
BUSINESS ETHICS
LEVELS
Individual Level
Organizational Level
Association Level
Societal Level
International Level
 BUSINESS ETHICS
STUDIES
Business ethics is a study of moral
standards and how these apply to the social
systems and organizations through which
modern societies produce and distribute
goods and services and to the behaviors of
the people who work within these
organizations. Business ethics, in other
words, is a form of applied ethics. It not
only includes the analysis of moral norms
and moral values but also attempts to apply
the conclusions of this analysis to that
assortment of institutions, organizations,
activities and pursuits that we call business.
 KINDS OF ETHICAL
ISSUES
There are three different kinds of issues
that business ethics investigates:
1. Systemic
2. Corporate
3. Individual
Systemic issues in business
ethics are ethical questions
raised about the economic,
political, legal, and other social
systems or institutions within
which business operate.
Corporate issues in business ethics
are ethical questions raised about a
particular organization. These
include questions about the morality
of the activities, policies, practices,
or organizational structure of an
individual company taken as a whole.
Individual issues in business ethics
are ethical questions raised about a
particular individual or particular
individuals within a company and
their behaviors and decisions. These
include questions about the morality
of the decision, actions, or character
of an individual.