TI PRESENTED BY – NAZMA AKHTAR

LASKAR & BHARGAV JYOTI PATHAK

IMPORTANCE OF BUSINESS ETHICS

 CONTENTS
 Introduction
 Business Ethics
 Foundations of Ethical Behaviour
 Nature of Business Ethics
 Organizational/Business Ethics
 Ethical Issues relating to business
 A Crisis in Business Ethics
 Organizational and Global Ethical Structure
 Ethics contributes to Employee Commitment
 Ethics contributes to Investor Loyalty
 Ethics contributes to Customer Satisafaction
 Concluding Rewmarks
INTRODUCTION
Ethics concern an individual’s moral judgement about right
and wrong . Decisions taken within an organization may be
made by individuals or groups, but whoever makes them will
be influenced by the culture of the company. The decision to
behave ethically is a moral one ; employees must decide
what they think is the right course of action. This may
involve rejecting the route that would lead to the biggest
short-term profit.
INTRODUCTION
Ethical behaviour and corporate social responsibility can bring
significant benefits to a business. For example they may be
like:

 Attract customers to the firm’s products, thereby boosting

sales and profits. Make employees want to stay with the
business, reduce labor turnover and therefore increase
productivity.
 Attract more employees wanting to work for the business,
reduce recruitment costs and enable the company to get the
most talented employees.
 Attract investors and keep the company’s shape price high,
thereby protecting the business from takeover.
BUSINESS ETHICS

Business ethics means conducting all aspects of businss and

dealing with all stakeholders in an ethical manner.
FOUNDATIONS OF ETHICAL BEHAVIOUR

Treat others as you would be treated :

 Respect
 Honesty
 Trust
NATURE OF BUSINESS ETHICS

Business ethics has a five part structure :

 The specification pof moral judgement
 Moral judgement and the moral standard
 Justification of moral judgement
 Logical reasoning and moral judgement
 Moral judgement and moral responsibility
WHY IS IT IMPORTANT?

Ethics influence and contribute to:

 Employee commitment
 Investor and customer loyalty and confidence
 Legal problems and penalties
 Customer Satisfaction
 The ability to build relationships with stakeholders
 Cost Control
 Performance, Revenue & Profits
 Reputation & Image
ETHICAL ISSUES RELATING TO BUSINESS

Honesty-Communication and behaviour consistent with facts

 Disclosure of Information
 Promises/Commitments
 Laws and professional standards
 Representation of others like shareholders
Unfair Competition
 Refrain from bribes and excessive gifts (that sway judgement)
 Avoid quid pro quo transaction
 Comply with “anti-trust” laws (these relate to pricing,
monopolistic practices)
ETHICAL ISSUES RELATING TO BUSINESS

Just compensation
 Respect intellectual propert (product piracy)
 Treat employees fairly

Respecting rights of others

 Treat others with fairness and respect regardless of age, religion
& ethnic group.
 Respect the community you operate in by paying fair share of
economic costs.
 Respect others and future generations by treating the
environment well.
 A CRISIS IN BUSINESS ETHICS

 Consumer trust of businesses is declining

 No sector is exempt from ethical misconduct
 Stakeholders determine what is ethical/unethical
-- Investors
-- Employees
-- Customers
-- Interest Groups
-- Legal System
-- Community
ORGANISATIONAL & GLOBAL ETHICAL
CULTURE

Ethical Culture :
 Describes the component of corporate culture that captures the
values and norms that an organization defines as appropriate
conduct
 Created shared values

Goal is to :
 Minimize need for enforced compliance
 Maximize utilization of principles/ethical reasoning
ETHICS CONTRIBUTES TO EMPLOYEE
COMMITTMENT
 Comes from employees who believe their future is tied to the
organization.
 Are willing to make personal sacrifices for the organization
-- The more dedication on the part of the company, the greater
the employee dedication.
-- Concerns include a safe work environment, competitive
salaries and benefit packages, and fulfillment of contractua l
obligations.
ETHICS CONTRIBUTES TO INVESTORS
LOYALTY
 Companies perceived by their employees as having a high
level of honesty and integrity are more profitable than
companies with a low level of honesty and integrity
 Ethical climates in organization’s provide platform for :
-- Efficiency
-- Productivity
-- Profitability
ETHICS CONTRIBUTES TO CUSTOMER
SATIFACTION

 Consumers respond positively to socially concerned

businesses
-- Being good can be extremely profitable
 Customer satisfaction dictates business success
 A strong organizational ethical climate places customer’s
interests first.
 Research shows a strong relationship between ethical
behaviour and customer satisfaction.
CONCLUDING REMARKS
 An integrity approach to business can yield strenghtened
competitiveness : it facilitates the delivery of quality
products in an honest, reliable way. This approach can
enhance work life by making the workplace more fun and
challenging. It can Improve relationships with
stakeholders and can install a more positive mindset that
fosters creativity and innovations among the stakeholders.
 The purppose of ethics is to enhance our lives and our
relationships both inside and outside of the organization.