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Business Ethics

 The word ‘ethics’ is derived from the Greek word ‘ethikos’


which means custom or character
 Business ethics is the application of a moral code of
conduct to the strategic and operational management of a
business. Business ethics and therefore business morality
generally result from an individual's own moral standards
in the context of the political and cultural environment in
which the organization is operating
3 Levels of Business Ethics
• The role of business in the national and international organization
of society
The Macro • The relative virtues of different political/social systems, such as free
enterprise, centrally planned economies, etc.
Level • International relationships and the role of business on an
international scale

The *Corporate social responsibility


Corporate *Ethical issues facing individual corporate entities (private and public
sector) when formulating and implementing strategies
Level

The *The behavior and actions of individuals within


Individual organizations
Level
Importance of Business Ethics
Why should business act ethically?

Keep its commitment


Protect the own interest Protect the interest of
to society to act
of interest business community
ethically

Meet stakeholder Prevent harm to the Build trust with the key
expectations general public stakeholder groups

Protect themselves
from abuse from Protect business Protect the employees
unethical employees reputation of the corporation
and competitors

Create healthy working


environment
Suggestions to Conduct Ethical Decision Making

Is the decision you are


Is the decision you are taking fair? In others
taking legal? If not legal, words, it should be a win
it is not ethical -win equitable risk and
rewards.

The Eleventh Commandment- 'Thou shall not


be ashamed when found', meaning when you
are hauled up over some seemingly unethical
behavior, if one's conscience is clear, then
there is nothing to be ashamed of.
Unethical Issues in Large Organizations
1. Bribery
2. Coercion
3. Insider Trading
4. Tax Evasion
5. Conflicts of Interest
6. Theft
7. Vendor Relationships
8. Bending of Rules
9. Environmental Pollution
10. Wages and Working Condition
Benefits of Managing Ethics in Workplace
1. Attention to business ethics has substantially improved
society
2. Maintain a moral course in turbulent times
3. Cultivate strong teamwork and productivity
4. Support employee growth and meaning
5. Mechanism as an insurance policy
6. Help avoid criminal acts “of omission” and can lower
fines
7. Help manage values associated with quality
management, strategic planning and diversity
management
8. Promote a strong public image
9. Overall benefits of ethics programs
Corporate Governance Ethics
1. Act with honesty & integrity, avoiding actual or apparent conflict of interest in
personal & professional relationships.
2. Provide information that is accurate, complete, objective, relevant, timely & and
understandable to ensure full, fair, accurate, timely, understandable disclosure in
reports & documents that companies file with or submit to, the regulators.
3. Comply with applicable laws, rules & regulations of the country, region & local
governments, & other appropriate public & private regulatory agencies in all material
respects.
4. Act in good faith, responsibility, with due care, competence & diligence without
misrepresenting material facts or allowing one’s independent judgment to be
subordinated.
5. Respect the confidentiality of information acquired in the place of one’s work except
when authorized or otherwise legally obligated to disclose. Confidential information
regard in the course of one’s work will not be used for personal advantage.
6. Share knowledge & maintain skills important & relevant to stakeholder’s needs.
Proactively promote & be an example of ethical behavior as a responsible partner
among peers, in the work environment & the community.
7. Achieve responsible use of & control over all assets & resources employed or entrusted
with.
Characteristics of an Ethical Organization
1. Value System
2. Employee Reviews
3. Workplace Diversity
4. Trust
5. Ease in interaction
6. Effective& clear communication
7. Openness
8. Objectivity and fairness
9. Individual Responsibility
10. Transparency
11. Purpose
Principles that help to Recognize Ethical
Organizations
1. Trustful
2. Open Minded
3. Meet Obligations
4. Have Clear Documents
5. Become Community
Involved
6. Maintain Accounting
Control
7. Be Respectful