1. What is Business Ethics?

ETHICS
o According to the ancient Greek philosopher Socrates, Ethics is the investigation of life.
o It is the discipline dealing with what is good and bad, right or wrong, and with moral duty and
obligation.
o A set of moral principles or values
o A theory or system of moral values
o The principles of conduct governing an individual or group
BUSINESS ETHICS
o The process of evaluating decisions, either pre or post, with respect to the moral standards of a
societys culture.
o It applies to all aspects of business conduct and is relevant to the conduct of individuals and the
entire organizations.

2. Importance of Business Ethics?
It is not just altruism that motivates corporations to operate in a socially responsible manner, but
also in consideration of the bottom line. There are good business reasons for a strong
commitment to ethical values:
Ethical companies have been shown to be more profitable.
Making ethical choices results in lower stress for corporate managers and other
employees.
Our reputation, good or bad, endures.
Ethical behavior enhances leadership.
The alternative to voluntary ethical behavior is demanding and costly regulation.
Without morality, business will be a chaotic human activity.
Business is an integral part of the human body, therefore, the actions of individuals and institutions
in business must be subjected to moral rules and moral evaluation.
Laws are insufficient and cannot cover all aspects of our human behavior thus, ethics is the
unwritten law, written in the hearts of men.
Managers and business leaders must also be trained and prepared to respond to complex
situations bearing ethical consequences over and above the quantitative instruments to measure
and predict expected outcomes.
Peter Drucker argues that the business enterprise is an organ of society and its actions have a
decisive impact on the social scene (not only profit but to consider its moral and social obligations
to its stakeholders)

3. What are the principles of business ethics?
Honesty - be honest in all communications and actions; be truthful, candid and forthright
Integrity - executives earn trust of others through integrity; ethical executives are principled,
honorable, and upright; ethical executives fight for their beliefs and do not sacrifice principle for
expediency
Promise-keeping - ethical executives can be trusted because they make every reasonable effort to
fulfill to the letter and spirit their promises and commitments
Loyalty - ethical executives are loyal to thier organization and the people they work with; ethical
executives avoid conflict of interest and does not disclose information learned in confidence for
personal advantage
Fairness - ethical executives are open-minded, accepts their mistakes, and where appropriate,
theychange their positions and beliefs
Caring - demonstrate compassion and a genuine concern for the well-being of others; ethical
executives seek to accomplish their business objectives in a manner that causes the least harm and
the greatest positive good
Respect - ethical executives adhere to the Golden Rule, striving to treat others the way they would
like to be treated
Law abiding - ethical executives abide by laws, rules and regulations relating to their business
activities
Commitment to excellence - ethical executives pursue excellence all the time in all things
performing their duties; ethical executives are well-informed and prepared and consistently
increase their proficiency in all areas of responsibility
Ethical role models - ethical executives are concious of their responsibilities and of their position of
LEADERSHIP thus seek to be positive ETHICAL ROLE MODELS
Reputation and morale - ethical executives avoid words or actions that might undermine respect
and they take affirmative steps to correct or prevent inappropriate conduct of others
Accountability - ethical executives acknowledge and accept personal accountability of their
decisions and ommissions to themselves, their colleagues, their company, and their community
***1. Be Trustful: Recognize customers want to do business with a company they can trust; when trust is at
the core of a company, it's easy to recognize. Trust defined, is assured reliance on the character, ability,
strength, and truth of a business.
2. Keep An Open Mind: For continuous improvement of a company, the leader of an organization must be
open to new ideas. Ask for opinions and feedback from both customers and team members and your company
will continue to grow.
3. Meet Obligations: Regardless of the circumstances, do everything in your power to gain the trust of past
customer's and clients, particularly if something has gone awry. Reclaim any lost business by honoring all
commitments and obligations.
4. Have Clear Documents: Re-evaluate all print materials including small business advertising, brochures, and
other business documents making sure they are clear, precise and professional. Most important, make sure
they do not misrepresent or misinterpret.
5. Become Community Involved: Remain involved in community-related issues and activities, thereby
demonstrating that your business is a responsible community contributor. In other words, stay involved.
6. Maintain Accounting Control: Take a hands-on approach to accounting and record keeping, not only as a
means of gaining a better feel for the progress of your company, but as a resource for any "questionable "
activities. Gaining control of accounting and record keeping allows you to end any dubious activities promptly.
7. Be Respectful: Treat others with the utmost of respect. Regardless of differences, positions, titles, ages, or
other types of distinctions, always treat others with professional respect and courtesy.

4. What is profit?
The surplus remaining after total costs are deducted from total revenue, and the basis on
which tax is computed and dividend is paid. It is the best known measure of success in
an enterprise.
Profit is reflected in reduction in liabilities, increase in assets, and/or increase in owners' equity. It
furnishes resources for investing in future operations, and its absence may result in the extinction
of a company. As an indicator of comparative performance, however, it is less valuable than return
on investment (ROI). Also called earnings, gain, or income.
a financial gain, especially the difference between the amount earned and the amount spent in
buying, operating, or producing something.