Business Ethics and Corporate Governance

II Semester MBA ( B - Batch )

( 2021` - ’23 )
 Ethics
Ethics is a branch of axiology which
together with metaphysics, logic and
epistemology constitutes philosophy.

Axiology: "The branch of philosophy dealing with the nature of value

and the types of value, as in morals, aesthetics, religion, and
metaphysics.“
( Webster's New World Dictionary)
 Philosophy
Philosophy means and includes five fields of
study and discourse: logic, esthetics, ethics,
politics, and metaphysics.
(Durant)
 Philosophy
" You then be reasonable," said old Socrates
to Crito, "and do not mind whether the
teachers of philosophy are good or bad, but
think only of Philosophy herself. Try to
examine her well and truly; and if she be
evil, seek to turn away all men from her; but
if she be what I believe she is, then follow
her and serve her, and be of good cheer."
 Logic
Logic is the study of ideal method in thought
and research: observation and introspection
deduction and induction, hypothesis and
experiment, analysis and synthesis.
 Esthetics
• Esthetics is the study of ideal form of
beauty; it’s the philosophy of art
 Ethics
• Ethics is the study of ideal conduct; the
highest knowledge; the knowledge of good
and evil, the knowledge of wisdom of life
 Politics
• Politics is the study of ideal social
organisation( it is not as one suppose the
art and science of capturing and keeping
office) monarchy, aristocracy, democracy,
socialism, anarchism feminism – these are
the dramatis personae of political
philosophy.
 Metaphysics
• Metaphysics is the study of the ‘ultimate
reality' of all things : of real and final nature
of “matter” (ontology), of “ mind“
(philosophical psychology) and the
interrelation of “matter” and “mind”in the
process of perception and knowledge
(epistemology)
Basic Moral Orientations
 On what basis do we make moral decisions?

“Do what the Bible tells you”

“Follow your conscience”
“Watch out for #1”
“Do the right thing”
“Don't dis' me”
“...all Men are created ...with certain unalienable
Rights”
“Make the world a better place”
“Daddy, that’s not fair”
“Be a good person”
"Do what the Bible tells you”
Divine Command Theories
• Being good is equivalent to
doing whatever the Bible--or
the Qur’an or some other
sacred text or source of
revelation--tells you to do.
• “What is right” equals “What
God tells me to do.”
 “Follow your conscience”
The Ethics of Our Inner Voice
• Conscience tells us what is right or wrong
• Often has a religious source
• May be founded in a notion of human
nature
• Is often negative in character, telling us
what is not right
 "Watch out for #1”
Ethical Egoism
• Says the only
person to look out
for is yourself
• Ayn Rand, The
Ethics of
Selfishness
• Well known for her
novel, especially
Atlas Shrugged
 "Do the right thing"
The Ethics of Duty
• Begins with the
conviction that ethics is
about doing what is
right, about doing your
duty.
• Duty may be
determined by:
– Reason
• Kant: Do what any
rational agent should do
– Professional role
• A physician’s duty to
care for the sick
– Social role
• A parent’s duty to care
for his or her children
 "Don't dis' me"
The Ethics of Respect
• Human interactions should be governed
by rules of respect
• What counts as respect can vary from
one culture to another
– Examples:
• spitting in the sand
• showing the soles of one’s shoes-
• What is it that merits respect?
 What counts as respect can vary from
one culture to another
Northern Europe and the Far East as classed as non-
contact cultures. There is very little physical contact beyond
a handshake with people we don’t know well. Even
accidentally brushing someone’s arm on the street warrants
an apology.
An innocent hug made headlines around the world in 2009
when America's first lady, Michelle Obama, broke royal
protocol on a visit to Britain by hugging the Queen.
In much of the Arab world, men hold hands and kiss each
other in greeting, but would never do the same with a
woman.
What counts as respect can vary from
one culture to another

Hand gestures can mean very different things in

different cultures; the ‘OK’ sign in Greece, Spain or
Brazil means you are calling someone an a**hole.
In Turkey, it’s meant to be an insult towards gay
people.
A thumbs up in America and European cultures is
an indicator of a job well done, however in Greece
or the Middle East, it can mean ‘up yours’
 “...all Men are created ...with certain
unalienable Rights”
The Ethics of Rights
• The most influential moral notion of
the past two centuries
• Established minimal conditions of
human decency
“Make the world a better place”
Utilitarianism
• Seeks to reduce suffering and
increase pleasure or happiness
• Demands a high degree of self-
sacrifice—we must consider the
consequences for everyone.
• Utilitarian's claim the purpose of
morality is to make the world a
better place.
 “Daddy, that’s not fair”
The Ethics of Justice
• Begins early in the
family with fairness
to all family
members
• What is fair for one
should be fair for all.
• Treating people
equally may not
mean treating them
the same.
 "Be a good person”
Virtue Ethics
• Seeks to develop individual
character
• Assumes good persons will
make good decisions
• Developed by Plato and
Aristotle
• Integral to the Jesuit tradition
– The Spiritual Exercises
• Provides a way of integrating all
the theories
Your Students’ Moral Orientation
Your Students' Moral Orientation
How important do you think each of the following is in
your students' lives?

N
E
o
x A
L t
t v
V i
r e
e t a
e r
r t t
m a
y l
e g
e a
l e
l
y
l

Re ligious Commands
Conscience
Se lfishness
Duty
Re spect
Rights
Conseque nce s for Eve ryone
Justice
Pe rsonal Virtues
 HONESTY, INTEGRITY AND
TRANSPARENCY ARE THE
TOUCHSTONES OF BUSINESS ETHICS
• Ethical corporate behaviour is nothing but a reiteration of
the ancient wisdom that ‘honesty is the best policy’. The
dramatic collapse of some of the Fortune 500 companies
such as Enron and WorldCom or the well-known auditing
firm Andersen showed that even successful companies
could ultimately come to grief, if their managers did not
practise the basic principles of integrity. For every
profession ‘we would think of a code of conduct or a set
of values, which has a moral content and that would be
the essence of ethics for that profession’. There should
be transparency in operations leading to accountability,
which should ensure safety and protect the interest of all.
 Value and Ethics in Business - A Basic
Understanding
• Business ethics are related to issues of
' what is right ' and ' what is wrong ' while
doing business. The constituents of
business include adherence to truth, a
commitment to justice and public integrity.
What values are to individuals, ethics are
to business.
 Roots of Unethical Behavior

Balancing work and family

Poor leadership

Poor internal communication

Lack of managerial support
 Why should businesses act ethically

• Better company culture

• More satisfied customers
• Attracting employees with integrity
• Growth and sustainable profits & improved
overall performance. 
• Avoiding legal trouble
• Positive impact on the community and on society
as a whole.