CHAPTER ONE

1. Business Ethics and Social

Responsibility
 1.1. Ethics: What Does Ethics Mean?
• Derived from Greek word ‘Ethicos’ meaning Character or
Manners

• Science of character of a person expressed as right or wrong

conduct or action.

• ethics is the code of moral principles and values that govern

the behaviors of a person or group with respect to what is
right or wrong.
 Cont’d

• Ethics sets standards as to what is good or bad

in conduct and decision making.

• An ethical issue is present in a situation when

the actions of a person or organization may
harm or benefit others.
 1.2. What is Business Ethics?
• comprises principles and standards that guide behavior in the
world of business

• According to John Donaldson “Business Ethics can be

described as the systematic study of moral (ethical) matters
pertaining to business, industry or related activities,
institutions, or practices and beliefs. It is the systematic
handling of values in business and industry.”
A systematic process of business ethics

Taken Good or
Decided by Leads to together Bad,
Character Conduct Series of Right or
of a man of a person Actions Considered As wrong,
Moral or
Immoral

By which
we can
Judge Known as
again Moral
Judgement

Moral
Standards Requires
1.3. Views in relation ship between business and
ethics
Unitarian View: Business & morality cannot be
separated and it must play by the rules of ethics of the
community.
Moral Structure

Business

Moral Ethics
 Separatist view of Ethics
• Proposed by Adam Smith and Milton Friedman:
Business is a distinct entity and does not include ethics
and morality

Business Ethics
 Integration view of ethics
• Proposed by Talcott Parsons
Law
Government

Morality
Business &
Ethics

Business
Market Systems Society
Ethics
 Cont’d

When business people speak about “business ethics” they

usually mean one of three things:

1. Avoid breaking the criminal law in one’s work related

activity

2. Avoid action that may result in civil law suits against the
company

3. Avoid actions that are bad for the company image

Businesses are especially concerned with these three things

since they involve loss of money and company reputation.
 1.4. Common Unethical Acts...
• lying and withholding needed information

• abusive or intimidating behavior

• misreporting time worked

• discrimination and sexual harassment

• stealing

• breaking environmental and safety laws

• falsifying records

• drug or alcohol abuse

• giving or accepting bribes

 1.5. Sources of Ethical Norms
• Regions
• Fellow Culture
of
Workers
Country
• Family • Professio
• The n

• Friends Individua • Employe

l r
•• Conscien
Religious • Society
• The Law
ce
Beliefs at Large
 1.6. What is social responsibility?

• Formally, corporate social responsibility can be

defined as the obligation of organization
management to make decisions and take
actions that will enhance the welfare and
interests of society as well as the organization.
• “How should we live in relation to each other?”
• it can be a difficult concept to grasp, because
different people have different beliefs as to
which actions improve society’s welfare.