Business Ethics

Unit-1
 Learning Outcomes

Learning Outcomes
I. Explain and define Ethics
II. Discuss theories related to forms of utilitarianism, Deontological, Justice &fairness.
III. Develop deeper insights into ethics
IV. Identify Wage discrimination, problems facing employees; Evaluate family friendly programs
V. Develop understanding of Individual conflicts of interest
VI. Discuss ethics of job discrimination
 Explain Environmental ethics
Unit -1

 Module I Definition of Business Ethics, Fundamental principles of ethics, Moral

development and moral reasoning, managing ethics in organization, Concept of Human
Values Ethics, Conceptual framework in understanding the complementarity between
values and skills, Universal value Vs Local Value
“Ethics always says, “Not I, but thou.” Its motto is, “Not self, but non-self.” The vain ideas of individualism, to
which man clings when he is trying to find that infinite power or that infinite pleasure through the senses, have
to put yourself last, and others before you. The senses say, “Myself first.” Ethics says, “I must hold myself last.”
Thus, all codes of ethics are based upon this renunciation; destruction, not construction, of the individual on the
material plane.” – Swamy Vivekananda
Opening Case

 https://link.springer.com/article/10.1007/s13520-012-0024-6
 Ethics

 Ethics is derived from Greek word ‘Ethos’ which means custom or character
or manners. It means rules of conduct, moral principles.
 In their simplest form, ethics are the moral standards you rely on when you make
a decision. They define what’s right and wrong,
 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.
Business Ethics

 Business ethics, connotes the form of applied ethics, which studies ethical

principles, morals and problems that take place in the business environment. It is
nothing but the integration of day to day morals and ethical norms to
business and applies to all types of busines
 Application of general business ethical ideas to business behaviour.
 Refers to a code of conduct that businesses are expected to follow while doing business.
 Expected by public at large ethics depend on the influence of the place, time, and the situation.
 Promotes healthy working environment, improves profitability, enhances business relations,
 It reduces penalties from public authority , Regulates and protects employees from mistreatment
in organization.
 Allows employees to work in healthy and productive environment thereby enhancing their moral.
 HUMAN VALUE ETHICS

 Human Value may be understood as those values which nurture Good

Human Being (GHB) from within.
 Values are an enduring set of emotional or feeling –level disposition in a
person which:
a. underpin the choice of his/her goals
b. Determine kinds of means used to achieve those goals.

 Values influence both selection of goals

 And choice of means adopted to achieve them.
Human Values and Disvalues

 Values which are healthy, lofty and helpful and preferable are called Human
values (HV). HV causes ethical behavior (contentment, humility, gratitude,
sincerity, honesty, tolerance, etc.)
 Values which are mean, harmful or injurious are termed as Disvalues (DV).DV
causes unethicality (greed, envy, vanity, anger, fear etc.)
 Both HV and DV prevail in an individual.
If sum of HV is greater than sum of DV then the individual is a GHB.
 But if the sum of DV is greater than the sum of HV then he declines in the scale
of GHB.
 Values are cause →Ethics is the effect.
 Complementarities between Values and Skills:

 Every individual, society or country has to take care of 2 aspects: ‘Doing’ the work and ‘becoming’ the
being. When he engages in ‘doing’ he uses skills relevant to particular work.
 Values on the other hand are the basis of ‘becoming’ or ‘not becoming’. If the HV dominate then the skill
will be used in a desirable way and promote ethical action
 If DV dominate efficiency may increase, but ethics may decline.
 Skills are external methods and techniques applied to perform a given task like carpentry, surgery, teaching,
dancing etc. Their role is to make doing efficient according to certain tangible criteria.
 Values on the other hand are the internal motives and impulses, feeling and emotions, behind every external
action.
 This is the basis of becoming a good human being.
 A GHB has to develop holistically-values and skills together.
 As distinguished from efficient work an excellent work is understood as:
 Holistic Excellence = Efficiency + Ethicality
 = Skills + Human Values
Importance of HVE in Organization

 1. Values influence managerial and organizational behavior.

 2. A manager’s values go hand in hand in performing management functions.
 3. A manager’s value system plays a significant role in the performance
appraisal of his subordinates.
 4. An efficient manager solves the organizational conflicts or group conflict
by accommodating different values of himself and those of his people.
 5. Fiedler’s leadership model specifies a particular leadership style
 Pertaining to his or her value orientation.
Types of Values

 1. Instrumental Values: These values relate to means for achieving results. E.g.
Assertiveness, Dependability, hard work, obedience, open mindedness, truthfulness,
good mannered etc.
 2. Terminal Values: These are values for which an individual strives. E.g.
satisfaction, peace, pride, recognition, prosperity etc.
 3. Personal Values: These could be positive or negative values.
 4. Business Values: A company becomes well known by its quality goods, corporate
governance, good services and social responsibilities.
 5. Managerial Values: These could include honesty, integrity, dynamism and
entrepreneurship
Universal Values Vs Local Values

Universal values:
 Human values like contentment, humility, gratitude, sincerity, honesty, tolerance, etc. and Disvalues like
greed, envy, vanity, anger, fear etc are universal.
 These values both desirable and undesirable cut across national frontiers and are Trans cultural.
 The degree of influence exerted by each one of them will differ from individual to individual within each
society. HVs and DVs are universal phenomena though the intensity of their working varies from person to
person.
 Local Values :There is however a definite place for local values too. 2 kinds of local values are observed:
 1. Varying modes of practice of the same universal value.E.g. Humility, respect to elders, a universal value is
outwardly shown in Japan by bowing. In India the mode to express humility and respect is not only to bow
down but to touch their feet.
 2. A purely local value But purely or exclusively local values also bound.E.g. In India Hindus always burn the
dead bodies while in most other communities burial is practiced.
Moral development and moral reasoning

 Moral development is the process through which children develop proper attitudes and
behaviors toward other people in society, based on social and cultural norms, rules, and
laws.
 Moral reasoning is the thinking processes involved in judgments about questions of right
and wrong.
How do we develop morals ?
 One of the best known theory was developed by psychologist Lawrence Kohlberg , he
expanded the theory of Jean Piget.
 Piaget described a two-stage process of moral development. Kohlberg extended Piaget's
theory, proposing that moral development is a continual process that occurs throughout the
lifespan..
Cont.

Kohlberg’ divided the moral development into three levels.

 Pre-conventional
 Judgment based solely on a person’s own needs and perceptions
 Conventional
 Expectations of society and law are taken into account
 Post-Conventional
 Judgment based on abstract, personal principles not necessarily defined by
society’s laws.
Kolbherg Experiment.docx
Stages

 Stages of moral developement.docx

Complementarities between Values and Skills:
 

 Every individual, society or country has to take care of 2 aspects: ‘Doing’ the work and
‘becoming’ the being. When he engages in ‘doing’ he uses skills relevant to particular work.
 Values on the other hand are the basis of ‘becoming’ or ‘not becoming’. If the HV dominate
then the skill will be used in a desirable way and promote ethical action. If DV dominate
efficiency may increase, but ethics may decline.

 Skills are external methods and techniques applied to perform a given task like carpentry,
surgery, teaching, dancing etc. Their role is to make doing efficient according to certain
tangible criteria.

 Values on the other hand are the internal motives and impulses, feeling and emotions,
behind every external action.This is the basis of becoming a good human being.
 Cont.
 A GHB has to develop holistically-values and skills together.As distinguished from efficient work an
excellent work is understood as:

 Holistic Excellence = Efficiency + Ethicality = Skills +

Human Values

 Since Values can be positive (HV) or negative (DV) and skills are regarded as neutral the above
equation can be also written as:
Holistic Excellence = Skills ± Values (Where HV is + and DV is -).
Cont. (Matrix)
Complementarities.docx
Principles of Ethics
 The Principle of Respect for autonomy 

Autonomy is Latin for "self-rule" We have an obligation to respect the autonomy of other persons,
which is to respect the decisions made by other people concerning their own lives. This is also
called the principle of human dignity. It gives us a negative duty not to interfere with the decisions
of competent adults, and a positive duty to empower others for whom we’re responsible.
 The Principle of Beneficence 
We have an obligation to bring about good in all our actions. Corollary principle? We must take
positive steps to prevent harm. However, adopting this corollary principle frequently places us in
direct conflict with respecting the autonomy of other persons.
 The Principle of nonmaleficence 

(It is not "non-malfeasance," which is a technical legal term, & it is not "nonmalevolence," which
means that one did not intend to harm.) We have an obligation not to harm others: "First, do no
harm." 
Cont.

 The Principle of justice 

We have an obligation to provide others with whatever they are owed or deserve. In public life,
we have an obligation to treat all people equally, fairly, and impartially.
Corollary principle: Impose no unfair burdens. 

Combining beneficence and justice: We are obligated to work for the benefit of those who are
unfairly treated.
Rules of Business Ethics

 Encourage healthy competition

 Avoid exploitation of customers
 Pay tax regularly
 Avoid injustice and discrimination
 Discourage secret agreement
 Service before profit
 Accept social responsibilities
 References

 http://web.mnstate.edu/gracyk/courses/phil%20115/Four_Basic_principles.htm
 https://www.britannica.com/science/Lawrence-Kohlbergs-stages-of-moral-development
 Gerald D. Baxter and Charles A. Rarick, “Education for the Moral Development of Manager:
Kohlberg’s Stages of Moral Development and Integrative Education”, Journal of Business Ethics,
June 1987, Pp.243-248.