BUSINESS ETHICS

By: Ms. Shweta Goel

WHAT IS ETHICS?

▪ Ethics is a collection of moral principles and rules of conduct accepted by

part or all the member of a society
▪ Ethics, also called moral philosophy, the discipline concerned with what is
morally good and bad and morally right and wrong. The term is also
applied to any system or theory of moral values or principles..
▪ It is a discipline that identifies good or evil, just or unjust, fair or unfair
practices
▪ The term ethics is derived from the Greek word ethos, meaning custom or
character.
WHAT IS BUSINESS ETHICS?

▪ Business ethics can be defined as written and unwritten code of principles

and values that govern decisions and actions of individuals within an
organization
▪ Business ethics apply not only to how the business interact with the world
at large but also to their one on one dealing with a single customer.
▪ Business ethics is the study of appropriate business policies and practices
regarding potentially controversial subjects including corporate
governance, insider trading, bribery, discrimination, corporate social
responsibility, and fiduciary responsibilities.
DEFINITIONS OF BUSINESS ETHICS

▪ According to Andrew Crane,

▪ “Business ethics is the study of business situations, activities, and decisions where
issues of right and wrong are addressed.”
▪ According to Raymond C. Baumhart,
▪ “The ethics of business is the ethics of responsibility. The businessman must
promise that he will not harm knowingly.”
▪ Business ethics is the study of how a business should act in the face of ethical
dilemmas and controversial situations. This can include a number of different
situations, including how a business is governed, how stocks are traded, a
business' role in social issues, and more.
 EXAMPLES

Ethical Unethical
▪ Obey the company rules and ▪ Taking credit for others work
regulations
▪ Lies
▪ Communicate effectively
▪ Verbal harassment
▪ Fair treatment and salary to employees
▪ Unpaid Overtime
▪ No adulteration
▪ Sexual harassment
▪ Professional relationship
▪ Money laundering
▪ Take responsibility
▪ Nepotism
▪ Respect your colleagues ▪ Sex for job/ promotion
SCOPE OF BUSINESS ETHICS

▪ Business ideas and objectives need to be harmless

▪ Product and services must not be harmful
▪ Business location must not cause difficulty to the neighboring people
▪ Fuel consumption, by product and wastage must not cause injury and discomfort to the
surrounding people
▪ Customer should be served with true information
▪ Employees should be hired without discrimination with fair wage, providing work safety
and healthy working conditions, opportunities for promotion, retirement benefits
▪ Cause no harm to the community and urbanization
▪ Help the government through regular taxes dues; faithfully follow national, economic,
business and industrial policies
▪ Social contributions tp various affairs of the society
 BASIS FOR
COMPARISON MORALS ETHICS

Meaning Morals are the beliefs of the individual or group as Ethics are the guiding principles which help the individual or
to what is right or wrong. group to decide what is good or bad.

What is it? General principles set by group Response to a specific situation

Root word Mos which means custom Ethikos which means character
Governed By Social and cultural norms Individual or Legal and Professional norms
Deals with Principles of right and wrong Right and wrong conduct
Applicability in No Yes
Business

Consistency Morals may differ from society to society and Ethics are generally uniform.
culture to culture.

Expression Morals are expressed in the form of general rules Ethics are abstract.
and statements.

Freedom to think and No Yes

choose
 FEATURES OF BUSINESS ETHICS

▪ Code of conduct
▪ Based on moral and social values :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
▪ Provides basic framework
▪ Voluntary
▪ Requires education and guidance
▪ Relative Term
▪ New concept
Poor personal ethics

Narrow Outlook
CAUSES OF
UNETHICAL
Poor corporate culture BEHAVIOUR

Pressure to achieve goals

Immoral leadership
MEASURES FOR ENCOURAGING
BUSINESS ETHICS

Hire and Consider ethical

Promote ethical
promote ethical aspects in
culture
persons decision making

Improve
Appoint ethics
corporate Moral courage.
officer
governance
APPROACHES TO ETHICS

Utilitarian Rights Justice

approach approach approach
Improvement of society

Teamwork and productivity

RELEVANCE OF
Facilitate Change ETHICS AND VALUES
IN BUSINESS
Cordial employer-Employee relation

Adherence to law

Public image

Stability and Growth

ELEMENTS OF BUSINESS ETHICS

❏Ethical Imagination
❏Ethical Identification
❏Ethical Evaluation
❏Tolerance of Ethical Disagreement
❏Ethical Competence
❏Obligation
DECISION MAKING PROCESS

▪ Ethical decision-making refers to the process of

evaluating and choosing among alternatives in a
manner consistent with ethical principles. In
making ethical decisions, it is necessary to
perceive and eliminate unethical options and
select the best ethical alternative.
DECISION MAKING PROCESS
Defining the
problem

Developing
alternative solutions

Evaluation of
alternatives

Choice of best
alternative

Implementing the
Decision

Follow up
 ETHICAL DECISION MAKING
▪ Ethical decision making involves taking into consideration ethical issues
at various stages of decision making process.
▪ This approach is called PLUS approach
P- Policies
L- Legal
U- Universal
S- Self
 EHICAL ISSUES IN BUSINESS
 Self- Dealing
 Information Manipulation
 Anticompetitive Behaviour
 Opputunistic Exploitation
 Substandard Working Conditions
 Environment Degradation
 Corruption
 MANAGEMENT PROCESS AND ETHICS

Planning
Management
process Oganising

Staffing

Directing

Controlling
ELEMENTS OF MANAGERIAL
PERFORMANCE
▪ Goals
▪ Perceptions
▪ Actions
▪ Disturbance
▪ Controlled Conditions