Ethical Aspects of Business

Dr. D.K.Srivastava

Lecture 4
Emerging Business Ethics Issues
• People make ethical decisions only after they recognize that a
particular issue or situation has an ethical component, therefore a
first step towards understanding business ethics is to develop
awareness about ethical issues.

• Ethical issues typically arise because of conflict among individuals'

personal moral philosophies and values, the values and culture
organization in which they work and values and culture of society in
which they live.
• Recognizing Ethical Issues:

• An ethical issue is simply a situation, a problem or even an

opportunity that requires thought, discussion or an investigation
before a decision can be made.
• Fairness: It is the quality of being just, equitable and impartial.

• Fairness clearly overlaps with concept of justice, equity and morality.

• In business there are three fundamental elements that seem to

motivate people to be fair, namely, equality, reciprocity and
optimization.
• Integrity is one of the most important quality for all of us. It means
uncompromising adherence to ethical values.

• An organization’s integrity usually rests on its enduring values and

unwillingness to deviate from standard of behavior.
• At a minimum, businesses are expected to follow all applicable laws
and regulations. In addition, organization should not knowingly harm
customers, clients, employees or even other competitors through
deception, misrepresentation or coercion.
• The fact BP repeatedly placed profits over safety of employees and
the environment culminated in 2010 Deepwater Horizon explosion,
which released 206.2 million gallons of oil into gulf of Mexico.

• Cheveron continues to fight an order to pay USD 8.6 billions to clean

pollution in Ecuadorian rainforest after local residents won a lawsuit
against the company.
Questions

• Can an honest man/women be successful in business?

• Gandhi refused to copy a word during exam in the school. What was the
word?

• Honesty refers to truthfulness or trust worthiness.

• “There is an incident which occurred at the examination during my first
year at the high school and which is worth recording. Mr. Giles, the
Educational Inspector, had come on a visit of inspection. He had set us five
words to write as a spelling exercise. One of the words was 'kettle'. I had
mis-spelt it. The teacher tried to prompt me with the point of his boot, but
I would not be prompted. It was beyond me to see that he wanted me to
copy the spelling from my neighbor's slate, for I had thought that the
teacher was there to supervise us against copying. The result was that all
the boys, except myself, were found to have spelt every word correctly.
Only I had been stupid. The teacher tried later to bring this stupidity home
to me, but without effect. I never could learn the art of 'copying'. ”
• In business, equality is about how wealth or income is distributed
among employees within a company, a country, or across globe.
• Reciprocity is an interchange of giving and receiving in social
relationships.
• Discriminating on the basis of gender, race, or religion is generally
considered to be unfair because these qualities have little impact on a
person’s ability to do a job.
• Ideas of fairness are sometimes shaped by vested interest. One or
both parties in the relationship may view an action as unfair because
the outcome was less beneficial than expected.
• Ethical Issues & Dilemmas in Business:

• An ethical issue is a problem situation, or opportunity that requires an

individual, group, or organization to choose among several options
that must be evaluated as right or wrong, ethical or unethical.
• 1. Misuse of Company Resources:

• Although, many companies have different viewpoints and policies

with regard to use of company resources, the misuse of these
resources has been identified as the leading form of misconduct in
the organization.
• Because misuse of company resources is such widespread problem,
many companies such as Boeing have implemented official policies
delineating the acceptable use of company resources.

• Boeing’s policy states that the use of company resources is acceptable

when it does not result in significant added costs, disruption of
business processes, or any other disadvantage to company. It further
states that the use of company resources for non-company purpose is
only acceptable when an employee receives explicit permission to do
so. (Assignment)
• Conflict of Interest:

• A conflict of interest exists when an individual must choose whether

to advance his or her own interest, those of organization, or those of
some other groups.

• To avoid conflict of interest, employees must be able to separate their

private interests from business dealings.
• Corporate Intelligence:
• Defined broadly, it is the collection and analysis of information on
markets, technologies, customers, and competitors as well as on
socioeconomic and external political trends.
• Discrimination:
• Although, a person’s racial and sexual prejudices belong to the
domain of individual ethics, racial and sexual discrimination in
workplace creates ethical issues within the business world.
• Discrimination on the basis of race, color, religion, sex, marital status,
sexual orientation, disability, age, national origin or veteran status is
illegal in USA.
• Discrimination remains a significant ethical issue in business despite
decades of legislation attempting to outlaw it.
• Sexual Harassment:

• It can be defined as any repeated, unwanted behavior of sexual

nature, perpetrated upon one individual by another.

• Read the act in Legal part of the course.