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The Social Function of

Business Ethics
E th i c s

 also called moral philosophy,

the discipline concerned with
what is morally good and bad
or right and wrong
 s E t h i c s
Busines

 also known as Corporate Ethics, is a

form of applied ethics or professional
ethics, that examines ethical principles
and moral or ethical problems that can
arise in a business environment.
 Why should businesses be
ethically sensitive?
• Businesses play a major role in keeping the economy alive,
it is therefore necessary to ensure the proper and ethical
governance of businesses.
• Business people – manager, employees and the
organizational leaders must behave in an ethical manners
in managing and operating a business. Otherwise, no one
will be willing to invest or loan money to the business.
• Business activities must be viewed and examined from the
perspective of morality.
• Business without ethics threatens the survival of human
society and in some cases, destroy the relationship of
people.
 Ethical behavior and corporate social
responsibility can bring significant benefits to a
business..
 Attract customers to the firm’s products, which
means boosting sales and profits
 Make employees want to stay with the business,
reduce labor turnover and therefore increase
productivity
 Attract more employees wanting to work for the
business, reduce recruitment costs and enable the
company to get the most talented employees
 Attract investors and keep the company’s share
price high, thereby protecting the business from
takeover
 There are numerous ways in which a
company reflects its ethics.
 maintaining a safe and secure workplace
 preventing discrimination and harassment
 reducing rates of employee’s misconduct
 building loyalty with consumers and
suppliers
 reducing litigation and business
arguments.
 th i cs a n d it s
Business E
f i c C or p or a t e V a l u e s . 
S p eci
• Diversity
• Safe and Secure Workplace
• Commercial Interactions
• Employee Reporting
• Social Media
• Corporate Social Responsibility
 Div er s i ty
• We live in a diverse world and our company should
reflect the importance of diversity, at the board
level, in top management, and our overall
workplace and relationships with outside vendors.

• A diverse workplace has to be a stated objective,

should be measured, and promoted as a way to
build trust internally and externally with our
employees, communities and government
stakeholders.
 re Wor kp l a ce
fe a n d S ecu
Sa

• Companies have to maintain a safe and

secure workplace.
• Employees’ concerns have to be identified
and addressed.
• There is no place for bullying, harassment,
or threats of physical or emotional harm.
• If the company is committed to its
principles, a safe and secure workplace
must be protected
 l In t er act io n s
Comm er ci a

A company conducts numerous business transactions each day, with

consumers, vendors, suppliers, agents, distributors and others.
•Business ethics need to be applied in each of these situations –
honesty, fairness and integrity means that company actors do not cheat,
lie, trick or engage in other behaviors designed to earn a transaction to
the detriment of the other person.
•There is nothing wrong with aggressive competition but within the
confines of honesty, fairness and integrity.
•A company that emphasizes this approach will see positive gains while
avoiding potentially unethical or illegal conduct.
•Ethical business interactions ensure that the company’s interactions are
legal. In fact, there may be occasions where the ethical resolution of a
dispute or a problem may exceed that which is legally required.
 e e R e po r ti n g
Em pl o y
• Companies that encourage and respond promptly to
employee concerns reflect a desire to build trust, act
fairly, and promote integrity in all of its dealings.
• Each employee concern gives the company a valuable
insight into its culture and its ethical performance.
• Companies committed to encouraging and responding
promptly to employee concerns will build robust reporting
systems, communicate the importance of a speak up
culture, and respond swiftly to employee concerns by
investigating any issues raised and remediating any
specific concerns that are substantiated
 Soc i a l M e d i a
 In today’s fast-paced Internet world where a company’s reputation can
be destroyed in a single viral incident.
 companies have to tie its ethical principles to its use of social
networking platforms, such as Facebook, Linked In, Snap Chat.
 If the company is serious about building trust with internal and
external stakeholders, company actors (board members, top
management, supervisors and employees) have to be held
accountable for use of social media (within the confines of labor laws).
 Corporate leaders can set examples of proper use by communicating
with employees internally and projecting a positive message to
external stakeholders about the company’s ethical values and
principles.
 Most importantly, the company can set an example of treating others
with respect and avoiding online controversies and other sites.
 e spo ns i bi l i t y
rat e Soc ia l R
Corpo

•  Companies are devoting greater attention to social

responsibility as an important means to promote its
reputation as a good corporate citizen.
• These programs build trust with external stakeholders and
promote internal loyalty and pride among its leaders and
employees.
• Our business, like other institutions, are valued for their
good deeds and social responsibility programs are an
easy way for companies to demonstrate their commitment
to their communities as an outgrowth of their own
employee values and moral principles
 i n e s s M os t in
A rea s of B us
ic a l A t te n t i o n
N e ed o f Et h
1. Social Responsibility of Capitalist Business
Practice
2. Morality of Advertising
3. Basic Employee Rights, Job Discrimination,
Other Labor-Related Ethical Issues
4. Insider Trading
5. Pollution and Resource Depletion
6. Whistle Blowing
 on s ib i l i t y o f
Social Resp r a c t i c es
s t Bus in es s P
Cap i ta l i
• Milton Friedman (American Economist) famously stated that
the only social responsibility of business is to increase its
profits. On the other hand William Sauser, explained that
business organizations have four levels of responsibility:
1) Earning a profit; 2) Legal responsibility; .3) Ethical
Responsibility and 4) Discretionary Responsibility.
• Responsibilities of businesses beyond profit is called a
Corporate Social Responsibility.
• CSR is a continuing commitment by business to behave
ethically and contribute to economic development while
improving the quality of life of the workforce and their
families, and the local community, and social at large.
 M o r a l i t y o f
Ad v e r t i s i n g

• Deceptive Advertisement – are those

that make false statements about or
misrepresent the product.
 e e R i g h ts , Job
Basic Employ e l a t e d Et h ical
mi n at i on , L a bor-R
Discri
Issues