Business Ethics

Dr. Azra Ishrat

 Definitions

Ethics involves a discipline that examines good

or bad practices within the context of a moral
duty
Moral conduct is behavior that is right or
wrong
Business ethics include practices and
behaviors that are good or bad
 Ethics involves learning what is right or wrong,
and then doing the right thing

Statements around application of values are

sometimes called moral or ethical principles
 Values and Ethics
Values are personal in nature
It is a view of life and judgment of what is
desirable that is very much part of persons
personality and groups morale
Values are imbibed from parents, teachers and
elders
Are dynamic yet constant in nature
Ethics is generalized value system
What values are to individual; ethics are to
business
 Principles of Personal Ethics
Concern and respect for the autonomy of
others
Honesty and willingness to comply with the
law
Fairness and ability not to take undue
advantage of others
Benevolence and preventing harm to any
creature
 Principles of Professional ethics
Impartiality: Objectivity
Openness; full disclosure
Confidentiality: trust
Due diligence: duty of care
Avoiding apparent or potential conflict of
interest
Loyalty towards profession
 Values and Ethics in Business
Business ethics is related to issues of what is
right and what is wrong while doing business
 What is business ethics
Ethics is conception of right and wrong
behavior, defining for us which actions are
moral and when they are immoral
Business ethics is application of general ethical
idea to business behavior
Ethical beh is expected by the public
 Reasons for having business ethic as
Facilitates and promotes good to society
Improves profitability
Foster business relations
Enhances employee productivity
Reduces criminal penalties
Protects employees from harmful action by their
employer
Minimizes clashes of personal values and
business goals
Allow people to act consistently
 What is not business ethics
Ethics is different from Religion
Ethics is not synonymous with law
Ethical standards are different from cultural
traits
Ethics is different from feeling
Ethics is not a collection of values
 Code of conduct and ethics for
managers
Integrity: manager must be morally upright.
Impartial: manager should look at and treat
all aspects of an issue in fair and unprejudiced
manner
Accountability: managers need to be
responsible for all their actions
Honesty
Transparency
 Roots of unethical behaviour
Balancing work-life
Poor leadership
Poor internal communication
Lack of management support
Need to meet the goal
 Benefits from managing ethics at
workplace
Attention to business ethics leads to improved
society
Ethical practice contributes to high
productivity and strong team work
Changing situations requires ethical edu
Ethical practices create strong public image
 Characteristics of ethical organization
At ease in interacting with diverse internal and
external stakeholder group
They are obsessed with fairness
Responsibility is individual rather than
collective. personal responsibility is high
They see their activities in term of purpose
 Theories of ethics
utilitarian theory
Is a normative theory that places the locus of right and
wrong solely on the consequence or outcome
Utilitarian approach to ethics implies that no moral
act(act of stealing) or rule(never lie)is intrinsically right
or wrong rather is a matter of overall non moral good
(pleasure, health, knowledge satisfaction) produced in
the consequences of doing that act or following that
rule
Equates pleasure with good and evil with pain
Recognizes the role of pain and pleasure in human life
Approves and disapproves of an action on the basis of
the amount of pain and pleasure brought about
 Universalism approach
Is based on the concept of moral absolutism.
i.e if something isnt right for one person or
one situation it isnt right for anyone
anywhere
 Right Theory
Advocated by Immanuel Kant
Indi right would include the rights to
a)Free consent
b)Freedom of conscience
c)Privacy
d) Free speech
e)Due process
While legal rights are protected by law moral rights
have to be protected by society.
 Ethics of Duty
An action is morally good if it reflects goodwill
When we act from duty our action has moral worth
When we act from feeling , self interest the it has no
true moral worth
Kant introduced humanistic dimension to business
decision
Principle of Kant
To act only in ways that one would wish others to act
when faced with similar situation
Always treat people with respect and disgnity.
 Justice Theories
All person should be guided by fairness, justice,
equity and sense of impartiality.
In modern context ethical decisions should
result in situation where all indi are treated
equally and in some cases when they are
treated unequally there should be some
defensible basis for it.
 Ethics of Care
It suggests that interpersonal relationships and care or
benevolence as a virtue as central to moral action.
It is based on belief that:
Persons have varying degrees of dependence and
interdependence on one another
Those particularly vulnerable to one's choices and their
outcomes deserve extra consideration to be measured
according to their vulnerability to one's choices.
It is necessary to attend to contextual details of
situations in order to safeguard and promote the actual
specific interests of those involved.