Business Ethics

What we will learn today

• Define and discuss what business ethics
means

• Draw a mind map, diagram or list of the

ethical issues faced in business

• Answer questions on the ethical decisions

of three companies
 What is meant by ethics?
An ethic is a moral principle or set of moral values held by
an individual or a group.

Ethical behaviour is behaviour which is considered to be

right and moral.

Business ethics are the values and principles which

operate in the world of business. They form the moral
framework of the organisation.
Business ethics help firms decide what
actions are right or wrong in certain
circumstances.

E.g. Should a firm relocate to a country

paying lower level of wages?
Should a firm release a life-saving drug
after limited testing?
Should advertising aimed at children be
restrained?
 Definition of business ethics

DEFINITION According to AndrewCrane,"Business

ethics is the study of business situations,
activities, and decisions where issues of right
and wrong are addressed."
UNDERSTANDING OF BUSINESS
ETHICS
concerned with
Moral issues in
Business ethics
ethics

Morality of medical
Medical ethics concerned with practices and
policies

concerned with
Morality of political
Political ethics
affairs
The 3 C’s of business ethics
 COMPLIENCE

The need for compliance of rules including

• Laws
• Principles of morality
• Policy of the company
 CONTRIBUTION

Business can make to the society

• The core values
• Quality of product/service
• Employment
 CONSEQUENCES

•Toward environment inside and outside the organization.

•Social responsibility towards shareholders, bankers, customers
and employees of organization
•Good public image, sound activities-good image.
Objectives of business ethics

A. Analysis and Evaluation

B. Approaches to resolve ethical

dilemmas
FEATURES OF BUSINESS
ETHICS
• Code of conduct : Business ethics is a code of conduct. It tells what to do
and what not to do for the welfare of the society. All businessmen must follow
this code of conduct.

• Based on moral and social values : Business ethics is based on moral and
social values. It contains moral and social principles (rules) for doing
business. This includes self-control, consumer protection and welfare, service
to society, fair treatment to social groups, not to exploit others, etc.

• Gives protection to social groups : Business ethics give protection to

different social groups such as consumers, employees, small businessmen,
government, shareholders, creditors, etc.

• Provides basic framework : Business ethics provide a basic framework for

doing business. It gives the social cultural, economic, legal and other limits of
business. Business must be conducted within these limits
.
• Voluntary : Business ethics must be voluntary. The businessmen must
accept business ethics on their own. Business ethics must be like self-
discipline. It must not be enforced by law.
• Requires education and guidance : Businessmen must be given proper
education and guidance before introducing business ethics. The
businessmen must be motivated to use business ethics. They must be
informed about the advantages of using business ethics. Trade Associations
and Chambers of Commerce must also play an active role in this matter.

• Relative Term : Business ethics is a relative term. That is, it changes from
one business to another. It also changes from one country to another. What
is considered as good in one country may be taboo in another country •New
concept : Business ethics is a newer concept. It is strictly followed only in
developed countries. It is not followed properly in
NEED/ IMPORTANCE OF BUSINESS ETHICS
 PRINCIPLES F BUSINESS
ETHICS
 Avoid exploitation of customer
 Avoid profiteering
 Encourage healthy competition
 Ensure accuracy
 Pay taxes regularly
 Get the accounts audited
 Fair treatment to employees avoid injustice and
discrimination
 No bribe and corruption
 Discourage secret agreement
 Service before profit
 Practice fair business
 Avoid monopoly
 Fulfill customer's wants
 Service motive
 Optimum utilization of resources
 Intensions of business
 Woodrow Wilson's rules
 Rule of publicity
 Rule of equivalent price
 Rule of conscience in business
 Rule of spirit of service
Thank you