BUSINESS ETHICS

What is Ethics?
The values an individual uses to interpret whether any
particular action or behavior is considered right or
wrong.
Ethics is the branch of philosophy that
focuses on morality and the way in which
moral principles are applied to everyday life.
Ethics has to do with fundamental questions
such as
What is fair?
What is just?
What is the right thing to do in this situation?

Ethics involves an active process of applying

values, which may range from religious
principles to customs and traditions

Business Ethics
Can be defined as the critical, structured
examination of how people & institutions
should behave in the world of commerce.
In particular, it involves examining
appropriate constraints on the pursuit of
self-interest, or (for firms) profits, when the
actions of individuals or firms affects
others.
The study and examination of moral &
social responsibility in relation to business
practices & decision- making in business

MODAL OF BUISINESS
ETHICS

WHY TO BOTHER WITH BUSINESS

ETHICS?

We need to study business ethics to

make better decisions for ourselves,
the businesses we work for and the

Moral
It is concerned with the principles of
right and wrong behaviour and the
goodness or badness of human
character.

Values
Business is a fair exchange
of values

Values are the rules by which we make decisions about right

and wrong, should and shouldn't, good and bad. They also tell
us which are more or less important, which is useful when we
have to trade off meeting one value over another.

Sources of Ethical Norms

Philosophical
systems

Fellow
Workers

Family

Regions of
Country

Profession
The
Individual

Friends

Conscience

Employer

The Law

Religious
Beliefs

Society at
Large

ETHICAL RESPONSIBILITIES
WHAT INFLUENCES ETHICAL BEHAVIOR?
Levels of moral development
Level one:

preconventional

Level two:

conventional

Level three:

principled
9

LEVEL ONE: PRECONVENTIONAL:

An individual acts in her own best
interest and thus follows rules to
avoid punishment or receive rewards.
This individual would break moral
and legal laws.
10

 LEVEL TWO: CONVENTIONAL:

An individual conforms to the

expectations of others, such as
family, friends, employer, boss,
and society and upholds moral and
legal laws.
11

 LEVEL THREE: PRINCIPLED:

An individual lives by an internal set of

morals, values, and ethics. These are
upheld regardless of punishments or
majority opinion. The individual would
disobey orders, laws, and consequences
to follow what he believes is right.
12

Ethical dilemma
Is also known as moral dilemma. Ethical
dilemma is any situation in which
guiding moral principles cannot
determine which course of action is
right or wrong. To obey one action,
would result in transgressing another.

Guidelines for Dealing with

Ethical Dilemmas
Is
Is
Is
Is

it
it
it
it

legal?
right?
beneficial? To whom? How much?
harmful? To whom? How much?

Guidelines for Dealing with

Ethical Dilemmas (cont.)
Would you be willing to allow
everyone to do what you are
considering?
Would you like your family to know?
Would you like your decision printed
in the newspaper?
Have you consulted others who are
objective and knowledgeable?

Whistle-Blowing
Definition:
The disclosure by an
employee of illegal,
immoral, or
illegitimate
practices by the
organization.
Eg-US based
company ENRON
fraud.

Guidelines:
Be sure you are right
(keep accurate records)
Try to resolve the
situation in-house first
Consult an attorney
before contacting the
media, etc.
Realize you could be fired
Dont expect to profit
financially

Managerial values &

attitudes

Discrimination

Employee privacy

Whistleblowing

The right to work

Working conditions, occupational health & safety

Work life balance

Fair wages
Freedom of conscience & freedom of speech in workplace

Organization of workers in works councils & trade unions, participation in

companys decisions

Working conditions

Promotion, firing, disciplinary proceedings

Employee participation & association

Electronic privacy and data protection

Due process & layoffs

Equal opportunities, affirmative action, sexual & racial harassment

Fair treatment in the interview, non discriminatory rules for recruitment

Relevant duties

Module 2

UTILITARIANISM
[Jeremy Bentham and John Stuart Mill]

The utilitarianapproach to ethical decision making focuses on

taking the action that will result in the greatest good for the greatest
number of people.

Theutilitarianapproach to ethical decision making focuses on taking

the action that will result in the greatest good for the greatest
number of people. Considering our example of employing low-wage
workers, under the utilitarian approach you would try to determine
whether using low-wage foreign workers would result in the greatest
good.

Its pretty simple, the greatest good for the greatest NUMBER of
people requires you to do the thing that benefits the most folks.
This may not be the thing that brings about the greatest happiness
overall.
action is right if it tends to promotehappinessand wrong if it tends
to produce the reverse of happiness

Utilitarianism focuses on acts that produce the greatest ratio of good

to evil for everyone:---STRENGTH:
Forces thinking about the general welfare and stakeholders.
Allows personal decisions to fit into the situation complexities.
WEAKNESS:
Ignores actions that may be inherently wrong.
May come into conflict with the idea of justice.
Difficult to formulate satisfactory rules for decision making.

UNIVERSALISM
[Kants Theory]

The universalist approach to ethical decision making is similar to

the Golden Rule.

One should treat others as one

would like others to treat oneself
Or
One should not treat others in ways
that one would not like to be
treated.
Universalism is the belief that ideas and
practices can be applied everywhere
without modification.
if an action is right (or wrong) for
others, it is right (or wrong) for us.

What are Rights ?

A Right is an entitlement to something. A person has a right when

that person is entitled to act in a certain way or is entitled to
have others act in a certain way towards him.

Theory of Rights
[Robert Nozick]

Everyone has a set of rights; and

Its up to the governments to protect those rights.

Justice

Justice is a the duty to treat all fairly

distributing the risks and benefits equally.

Theory of Justice
[Blame John and John Rawls]

Greatest Liberty Principle Each person has an equal

right to basic rights and liberties.
Focus is on outcomes Are people getting what they
deserve?
Strength Basic premise - The protection of those who
are least advantaged in society.
Criticisms Doesnt examine the costs of producing the
equality.

Virtue

The quality of doing what is right and avoiding

what is wrong.

Virtue ethics
Virtue ethics is an approach that deemphasizes rules, consequences and
particular acts and places the focus on the kind of person who is acting.
The issue is not primarily whether an intention is right, though that is
important; nor is it primarily whether one is following the correct rule; nor is
it primarily
whether the consequences of action are good, though these factors are not
irrelevant.

man named Rahul considers whether or not to

steal a drug which he cannot afford to buy in
order to save the life of his mother.
Rahul predicament(difficult situation).
The mothers disease.
The druggists refusal to lower his price.
Should Rahul steal the drug?
The reason for and against stealing are then
explored through a series of questions that vary
and extend the parameters of the dilemma in a
way design to reveal the underlying structure of
moral thought.

Ethics of care

This is a theory about what makes actions right or wrong. It

emphasize universal standards and impartiality, ethics of care
emphasize the importance of relationships.

Law
A law is as we know a government rule,
anywrittenorpositiveruleorcollecti
onof
rulesprescribedundertheauthority
ofthe
stateornation,asbythepeopleinit
s constitution.

Legal ethics
Legal ethics encompasses an ethical code governing
the conduct of persons engaged in the practice of law
and persons more generally in the legal sector.

Legal ethics
Legal ethics encompasses an ethical code governing
the conduct of persons engaged in the practice of law
and persons more generally in the legal sector.