CHAPTER (1)

An Overview of ETHICS
 Objective

■ To describe the definition of ethic

■ To know the important of business ethics

■ To know the actions that are corporations taking to reduce business ethics risks

■ To know the approach that you can take to ethical decision making

■ To understand the risk of negative impact due to the unethical use of information
technology
 WHAT ARE ETHICS?

■ Each society forms a set of rules that establishes the boundaries of generally accepted
behavior.

■ Often, the rules are expressed in statements about what people should or should not
do.

■ These rules fit together to form the moral code by which that society lives.

■ The term morality refers to social conventions about right and wrong that are widely
shared that they are the basis for an established common consensus.
 WHAT ARE ETHICS?

■ However, one’s view of what is moral may vary by

1. age

2. cultural group

3. ethic background

4. religion

5. gender
 Definition of Ethics

■ Ethics are beliefs regarding right and wrong behavior.

■ An individuals interpretation of ethical behavior is strongly influenced by a combination

of family influences, life experiences, education, religious beliefs, personal values, and
peer influences.
 Virtues Vs. Vices
■ Virtues are habits that incline us to do what is acceptable
■ Vices are habits that incline us to do what is unacceptable.
 Virtues

Fairness, generosity, honesty and loyalty are

examples of virtues.
Fairness
Generosity
Vanity, greed, envy, and anger are examples of vices.
Envy
Anger
 Value

A person’s virtues and vices help define that person’s value system, the complex scheme of
moral values by which one chooses to live.
 Importance of Integrity

■ People with integrity:

– Act in accordance with a personal code of principles

– Extend to all the same respect and consideration

– Apply the same moral standards in all situations

■ Integrity is one of the conerstones of ethical behavior.

ETHICS IN THE BUSINESS WORLD

■ Risk is the product of multiplying the likelihood of a negative event happening by the
impact of such an event happening.

■ Thus, if the likelihood of an event happening is high and the potential negative impact is
large, the risk is considered great.

■ Ethics have come to the top of the business agenda because the risks associated with
inappropriate behavior have increased both in their likelihood and in their potential
negative impact on the organization.
 Why Fostering Good Business Ethics is
important
■ There are five reasons why corporations need to promote an ethical work environment
by encouraging employees to act ethically when making business decisions and by
supporting them when they do so:

1. To protect the organization and its employees from legal action

2. To create an organization that operates consistently

3. To produce good business

4. To avoid unfavorable publicity

5. To gain the goodwill of the community

 To protect the organization and its employees from
legal action

■ U.S. Supreme Court established that an employer can be held responsible for the acts of its
employees

■ This principle is called respondent superior

■ Coalition of several legal organizations argues establishment of ethics and compliance programs
should reduce criminal liability of organization
To protect the organization and
its employees from legal action
Distinguishing between a bribe and a gift
Bribes Gifts

Are made in secret as they are neither Are made openly and publicly as a gesture
legally nor morally acceptable of friendship or goodwill

Are often made indirectly through a third Are made directly from donor to recipient
party

Encourage an obligation for the recipient to Come with no expectation of a future favor
alter his or her behavior in some way for the donor
favorable to the donor
Identify bribes and gifts
?
?
?
? End
 Create an organization that operates consistently

Many organization have the following values in common:

1. Operate with honesty and integrity, staying true to what we believe

2. Operate according to our standards of ethical conduct-both in words and

action(“walk the talk)

3. Treat our colleagues, customers and consumers as we want to be treated

4. Strive to be the best at what matters most to our company

5. Accept personal responsibility for our actions

6. Value diversity

7. Make fact-based, principle-based decisions

1. Operate with honesty and integrity, staying true to what we
believe
2. Operate according to our standards of ethical conduct-both in words and

action
3. Treat our colleagues, customers and consumers as we
want to be treated
4. Strive to be the best at what matters most
to our company
5. Accept personal responsibility for our actions
6.Value diversity
7. Make fact-based, principle-based decisions
End
To produce good business
 To produce good business
■ Good ethics means good business/improved profits

■ Companies that:

– Produce safe and effective products

– Provide excellent service that retains customers

– Develop and maintain strong employee relations

Produce safe and effective products
Provide excellent service that retains customers
Develop and maintain strong employee relations
To produce good business
 To produce good business

• Suppliers/business partners place priority on working with companies that operate in a

fair and ethical manner

■ Bad ethics means bad business/waning profits

– Bad ethics can lead to bad business results

– Bad ethics can have a negative impact on employees

End
To avoid unfavorable publicity
 To avoid unfavorable publicity

The public reputation of a company strongly influences :

 the value assigned to its stock by shareholders

 how consumers regard its products and services

 the degree of oversights it receives from government agencies

 the amount of support and cooperation it receives from business partners.

End
To gain the goodwill of the community
 To gain the goodwill of the community

■ Organizations have fundamental responsibilities to society

– Making contributions to charitable organizations and nonprofit institutions

– Providing benefits for employees in excess of legal requirements

– Choosing economic opportunities that might be more socially desirable than

profitable

■ Socially responsible activities create good will

■ Good will makes it easier for corporations to conduct business

Thank You!