ETHICS

Recently a peon was appointed in your office (DM office). He is illiterate and mentally not sound. Ever since his
appointment he has been more of a ‘burden’ than any help in the office. He doesn’t know any work. Staff in your office
feel that their work is disturbed by his behavior. The peon is always found to be talking either alone or with anyone he
encounters. He is not obeying your staff’s orders in the office.

He was appointed on sympathy grounds after his father’s untimely death. His mother is ill and always bedridden. His
income is the only source for his family now. He got the job after lobbying by a group representing his caste. He was
appointed by your predecessor after he was pressurized by local MP. Some moves to remove him by your predecessor
were met with public protests by a group representing his caste.
You are very strict and disciplined  in your office. You are being respected in your district for your integrity and honesty.
You come to know about the peon few days after you assume power. You have observed his behavior and found him to
be unfit to continue in his job. The peon has no other relatives except his mother.

Explain how will you deal with the peon and what decision will you take.
Study Question 1: What is ethical behavior?

Ethics
• Code of moral principles.
• Set standards of “good” and “bad” as opposed to “right” and “wrong.”
Ethical behavior
• What is accepted as good and right in the context of the governing moral
code.

Management 8/e - Chapter 3 7

Ethics – A branch of philosophy concerned with ways of
thinking philosophically about morality, and moral
judgment.
Open-Ended Questions?
• Are ethical decisions important?
• What happens without ethics?
• What is the relation between society – ethics – morals – moral
judgment?
 Examples of Ethical Decisions

An American journalist, the first, to visit the Soviet Union after the Chernobyl accident found a
very provocative story. He was taken on a tour of the plant with some American engineers after
the 1986 explosion. What he found out about what happened the night the reactor exploded was
frightening. It seems that night two of the engineers were playing around with one of the
reactors, in what later the Soviets described as an "Unauthorized experiment." The engineers
were trying to see how long a turbine would free-wheel if they took the power off it. To do this
they had to take reactor four off-line. They by- passed six different security systems with
warning lights saying "extremely dangerous do not continue." They shut off the alarms rather
than the experiment. The engineers even padlocked open the valves on the reactor so they
wouldn't automatically close. These engineers were two of the people considered excellent in
their field. If they had been in America they would have been seen as Yale, Harvard, or MIT,
graduates. They would have had 4.0 GPA's and highly revered.
What ethical decisions were involved in this
story?

What kind of ethical decisions did the

engineers make?
Take out a piece of scrap paper!

• Do not put your name on the paper, this is

anonymous!
• Would you cheat on an important exam? “Yes or
No”
A survey of American students showed that 65% would
cheat!

Were you truthful? Is it ethical to answer truthfully?

Who gets hurt when people are unethical? What if GM
cheated you when they built your car?
Think back to the Engineers
• How ethical were the Engineers?
• How moral were the Engineers?
• What is the difference?
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?
Comparing Working Conditions

Bangladesh The UK

Wage per month: £12 £813

Wage per week: £3 £203
Wage per hour: 33p £5.35
Hours per week: 90hrs 38hrs
What ethical issues are faced by business?
• Should firms use child labour?

• Is animal testing needed in products and ingredients?

• What wages should firms pay to poor countries?

• To what extent should firms seek to be environmentally friendly?

• Should firms get involved in certain activities?

e.g making weapons
Who cares about business ethics?
• Customers
• Managers/Owners/Shareholders
• Pressure Groups/Activists
• Workforce
• The Community
• Trading Partners
Why be ethical?

•Create good image and good press

•To act within the law
•Because the owners want to be
•It is one of their unique selling points
•To attract customers/employees/investors
•To be socially responsible
Two sides to every story
• Companies often find it difficult to please all of its stakeholders, as they have
different interests.

• Being ethical depends on an individual view of what is

right and wrong. What might be considered
good behaviour to one individual, may
seem bad to another.

• Ultimately companies aim to make a profit and

sometimes this can conflict with acting in a responsible way.

• Larger, global companies can often find it difficult to regulate their activities in
other countries.
The worst offenders
The Fraser 2006 rating on ethical reputation (1st being regarded as least
ethical), based on interviews with 1,300 adults:

1)McDonald's
2)Nike
3)Shell
4)Adidas
5)Barclays
6)Coca-Cola
7)BP
8)Camelot (National Lottery)
9)American Express
True or False?
Is the following statement true or false?

“Ethics has to do with whether my feelings are right or wrong.”

True – but we must realise that

sometimes our feelings can cloud are
judgement and make it difficult to see
both sides.
True or False?
Is the following statement true or false?

“Ethics has to do with my religious beliefs.”

True – it can be linked to religious

beliefs, but remember it is much more
than this.
True or False?
Is the following statement true or false?

“Being ethical is doing what the law always requires.”

True – people and business have to

follow law, but remember that some
laws may be unethical.
True or False?
Is the following statement true or false?

“Ethics consists of the standards of behaviour our society expects.”

True – but remember that society is

sometimes unpredictable and cruel.
 lop m e n t o f
Deve
u al E th ic s
Individ
 ob E thi c al
On-the-J
Dilemmas

Telling the truth and

adhering to deeply felt
Situation in which a business ethical principles in
decision may be influenced business decisions.
for personal gain.

Employee’s disclosure
of illegal, immoral, or
unethical practices in
the organization.
Businesspeople expect
employees to be loyal
and truthful, but ethical
conflicts may arise.
 g a n i z at io n s
How Or ct
E t hic a l C o n d u
Sh ape
 espon sib il it y
Are as of R
THANK YOU