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Ethics is the discipline that examines ones moral standards or the moral standards of the society.

Ethics (Different Meanings)

Principles of conduct governing an individual or a group. The study of morality

The discipline that examines ones moral standards or the moral standards of a society. 1. Normative study 2. Descriptive study

Business Ethics

Business ethics is a specialized study of moral right or wrong. It concentrates on moral standards as they apply to business policies, institutions and behaviour.

Business Ethics

It is the study of moral standards and how these apply to the systems and organisations through which modern societies produce and distribute goods and services, and to the people who work within these organisations.

Business Ethics
Business ethics not only includes the analysis of moral norms and moral values, but also attempts to apply the conclusion of this analysis to that assortments of institutions, technologies, transactions, activities that we call business.

Issues that Business Ethics Investigates

Systemic issues Corporate issues Individual issues


Morality are the standards that an individual or a group has about what is right and wrong ,or good and evil.

Moral and nonmoral standards

Moral standards: The norms about the kind of actions believed to be morally right or wrong as well as the values placed on the kinds of objects believed to be morally good and morally bad. Non-moral standards: The standards by which we judge what is good or bad and right or wrong in a non-moral way.

Five characteristics of Moral Standards

Involved with serious injuries or benefits. Not established by law or legislature Should be preferred to other values including self-interest Based on impartial considerations Associated with special emotions and vocabulary

Moral Development
LEVEL ONE: PRECONVENTIONAL STAGES 1. Stage One: Punishment and Obedience Orientation 2. Stage Two: Instrument and Relativity Orientation LEVEL TWO: CONVENTIONAL STAGES 1. Stage Three: Interpersonal Concordance Orientation 2. Stage Four: Law and Order Orientation

Moral Development

LEVEL THREE: PRECONVENTIONAL OR PRINCIPLED STAGES 1. Stage Five: Social Contract Orientation 2. Stage Six: Universal Ethical Principles Orientation

Moral Reasoning

Moral reasoning refers to the reasoning process by which human behaviours, institutions, and policies are judged to be in accordance with or in violation of moral standards.

Moral Reasoning



Moral reasoning always involves two important components: An understanding what reasonable moral standards require, prohibit, value, or condemn. Evidence and information that shows that a particular person, policy, institution or behaviour has the kinds of features that these moral standards require, prohibit, value or condemn.

Moral Reasoning

Moral standards

Factual information concerning the policy, institution or behaviour under consideration.

Moral judgment on the rightness Or wrongness of the policy, institution, or behaviour.

Arguments for and against Business Ethics

Arguments Supporting Ethics in Business




Ethics apply to all human activities. Business is a human activity. Business cannot survive without ethics. It requires a minimal adherence to ethics. A stable society required to carry out business dealings. Ethics is consistent with profit seeking. Examples of companies where ethics and profit co-exist.

Reason to Bring Ethics into Business

Prisoners dilemma argument It is a situation where two parties choose to co-operate or not, and where both gain when both co-operate, but if only one co-operates the other one gains even more, while if both do not co-operate both lose.

B B does not cooperates cooperate with A With A A cooperates A : 1 year A : 3 years with B B : 1 year B : Free A does not cooperate A : Free A : 2 years With B B : 3 years B : 2 years

Lesson from Prisoners dilemma

When people deal with each other repeatedly, so that each can later retaliate against or reward the other party, cooperation is more advantageous than continuously trying to take advantage of the other party. Over the long run and for the most part, it is better to be ethical than to be unethical.

Customers and employees care about ethics. Unethical practices in a company : Customers stop buying products of that company. Employees exhibit higher absenteeism, higher turnover, lower productivity and demand higher wages. Ethical practices in a company : Customers attracted to that company. Employees exhibit lower levels of absenteeism and turnover, show higher levels of trust and commitment to the organization and its management, and demand lower wages.

Arguments Against Ethics in Business

Persons involved in business, they claim, should singlemindedly pursue the financial interests of their firm and not sidetrack their energies or their firms resources in to doing good works Three different kinds of arguments are advanced in support of this view.

First, some have argued that in perfectly competitive free markets, the pursuit of profit will by itself ensure that the members of the society are served in the most socially beneficial ways. To be profitable, each firm has to produce only what the members of society want and has to do this by most efficient means available.

Here we examine some of the questionable assumptions on which the argument rests



Most industrial markets are not competitive. Several ways of increasing the profits actually injure society Firms are producing what the members of the society wants, but infact wants of large segments of society are not met.

Second kind of argument advanced to show that business managers should singlemindedly pursue the interest of the firm and should ignore ethical considerations.

The arguments used to justify a managers unethical or illegal conduct

1.He should be excused because he did it not for himself but for the company.
2.There are no limits to the managers duties to serve his employer. But an agents duties has been defined by the LAW OF AGENCY.

3.If a manager agrees to serve a firm, then the agreement automatically justifies whatever the manager does on behalf of the firm.

Third kind of objection is that business ethics is essentially obeying the law.