Business Ethics - Basic Principles

• Questions that need addressing
– What is Ethics and business ethics – What are the stages of moral development – Should moral standards be applied to business – When is a person morally responsible for doing wrong

Business Ethics - Basic Principles
• Merck Example for River blindness (1979) of medicine for animals , Ivermectin • Cost of devpt 100 million USD • Population affected 18 million by 1979 • Population at risk 85 million • WHO, Govt. not willing to fund

Business Ethics - Basic Principles
• Ethics and business seem to be a contradiction to each other • Whenever ethics conflicts with profits, businesses choose profits over ethics • Latest research indicates that businesses that do not so, gain in the long term?? Test cases Wipro, Infosys v/s HCL, Reliance

Business Ethics - Basic Principles
• Ethics – A study of morality, basically investigating it and generating results of that investigation • Morality – Standards that an individual or a group has about what is wrong and what is right, or good and evil

Business Ethics - Basic Principles
• Moral Standards
– The norms about the actions that we believe are morally right or wrong
• Example: Stealing is bad, helping others is good

– Where do these come from – Even though we may believe in them, we don’t live up to them all the time

Business Ethics - Basic Principles
• Non Moral Standards
– Where we don’t get caught into dilemmas – Language grammatically correct or not – Athletic standards etc.

Business Ethics - Basic Principles
• Characteristics that distinguish Moral standards and Non Moral standards
– Matters that can seriously injure or benefit human beings – Moral standards are not established by authoritative bodies like law etc. – Are based on impartial considerations – These are associated with special emotions, shame, guilt, or pride, self respect – These are felt to be preferred over other values

Business Ethics - Basic Principles
• Ethics
– discipline that examines one’s moral standards or that of a society – It is normative study, i.e. defines what is wrong or right, and is not a descriptive study like sociology or anthropology

Business Ethics - Basic Principles
• Business ethics
– Study of moral right and wrong as applied to business – Investigates three types of issues
• Systemic (Micro and Macro environment) • Corporate (issues related to organization) • Individual (issues related to individuals in orgs)

Business Ethics - Basic Principles
• Ethics and Globalization & rise of MNCs
– Ethical Arguments that are pro this process
• Products standardization, Economic sizes, more people can access,

– Ethical Arguments that are against these processes
• Shifting of businesses from places like US with tough environmental laws, selling goods banned elsewhere, differing ethical views of different cultures leading to ethical relativism, polygamy, abortion etc.

Business Ethics - Basic Principles
• Arguments against Ethical relativism • When two people or two groups have different beliefs, philosophers point out that at least one of them is wrong

• Read the handout about Philosopher James Rachels’ views on this (Handout -1)
• There seem to be some universal rights or wrongs, Nazi holocaust, human slavery, discrimination between people on basis of color, caste, creed, religion etc.

Business Ethics - Basic Principles
• Technology & Business Ethics
– IT creating new ethical challenges on information ownership, individual privacy – Biotechnology is raising new questions about fiddling with plants, animal and humans genetically

Business Ethics - Basic Principles
• Moral Development process • Lawrence Kohlberg’s model –Six Stages
– Level One: Preconventional Stages
• Stage One: Punishment & Obedience orientation • Stage Two: Instrumental & Relative Orientation
» Actions as Instruments for satisfying child’s needs

Business Ethics - Basic Principles
• Moral Development process • Lawrence Kohlberg’s model- Six Stages
– Level Two: Conventional Stages
• Stage Three: Interpersonal Concordance Orientation (peer group, relatives etc.) • Stage Four: Law and Order orientation (country, society)

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