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WHAT IS ETHICS?
Ethics originated from the word ethos character or manners Ethics can be defined as the rules or standards governing the conduct of a person or the members of a profession Ethics is concerned with distinguishing between
good and evil in the world, right and wrong human actions, and virtuous and non virtuous characteristics of people.
When more than 100 business people were asked by a sociologist what does ehtical mean to you
More than 50percent defined it as what my feelings tell me is right 25 percent defined it in religious terms as what is in accord with my religious beliefs 18 percent conforms to the golden rule
Personal ethics
referring to the rules by which an individual lives his or her personal life
Professional ethics
the code that guides the professional conduct of people
Ethics is the discipline that examines ones moral standards or the moral standards of the society It questions the applicability of these standards to our lives and whether these standards are reasonable or unreasonable i.e. whether they are supported by good reasons or poor ones
OBJECTIVES OF ETHICS
The primary objective is to define the highest good of man and set a standard for the same Diagnostic goal
Makes evaluative assessment about human behaviour as moral or immoral
Establishes moral standards/norms of behaviour Makes judgment upon human behaviour based on these standards and norms Therapeutic goal
Prescribes moral behaviour, makes recommendations about how to or how not to behave
NATURE OF ETHICS
Deals with human behaviour only The science of ethics is normative science Ethics deals with human conduct which is voluntary and not forced or coerced Ethics is basically an area of dealing with moral judgement regarding voluntary human conduct
SOURCE OF ETHICS
Genetic inheritance Religion Philosophical systems Cultural experience The legal system Codes of conduct
BUSINESS ETHICS
Ethical business performance adhering to societys basic rules that define right and wrong behaviour Major challenges in business balance ethics and economics Should be ethical and economically profitable The ethics of management goes beyond simple acts like bribery, theft and collusions The three terms used to define ethics are
Right Proper Just
Ethical adherence gives rise to efficient economy Government and law can protect to an extent In the long run, Ethics and profits go together Ethics is the conscious appeal to norms and values, we hold ourselves obliged People in business often face ethical questions where balance has to be found between the different and often conflicting rights and interests at stake
Ethics conflicts with profits Business always chooses profits over ethics Ethical behaviour creates the kind of goodwill and reputation that will expand opportunities for profit The first and foremost ethical obligation is to make profits for the shareholders and stakeholders Also to discharge social responsibilities and welfare commitments
Every business exists more on ethical means or in total regard to its social concern to survive long Business needs to function as responsible corporate citizen in the country
The organ of the society that creates wealth
Values and attitudes of managers are a critical element in a companys ethical performance
Ethics expects a manager to be honest within himself and also in the society
Ethics is unstructured Does not have a standard format or framework Is abstract in concept Does not have universal concept If a decision helps in benefiting only to oneself, then it is not an ethical decision
FACTORS INFLUENCING BUSINESS ETHICS Leadership Strategy and Performance Environment Corporate Culture Individual Characteristics
LEADERSHIP
Character is the most crucial and elusive element of leadership Leaders rule us, wield power hence we should be careful whom we choose as leaders Leaders should serve as models and mentors Teaching is one of the primary jobs of leadership
The elements of ethical culture that guide employee thought and action covers:
Leadership Fairness Employee authority structure Reward systems Ethics as a topic of conversation in the organisation Organisational focus that communicates care for the employees and the community
Defining its value structure provides guidance to individual decision makers with the firm, when facing difficult dilemmas
Business strategy
The managerial plan for directing and running a particular business unit
Functional strategy
Plan to manage a principal subordinate activity within a business
CORPORATE CULTURE
Appearance of propriety An ethical decision does not always lead to the highest profits possible It engages in ethical decision making because it is the right thing to do What contributes to the internal culture of the firm as well as to the external stakeholders perception of the firm?
Engaging in ethical behaviour, implementing ethics programs or instituting code of conduct
ENVIRONMENT
Warnings of eco-catastrophe
Burning rivers Dying lakes Oil fouled oceans Air is highly contaminated
We need to find limits to our growth and changes in our life style
Requires an identification of relevant stakeholder and a clear understanding of the vital issues at stake
OBJECTIVES OF BUSINESS ETHICS Evaluates human practices by calling upon moral standards
Analysis and evaluation
Clarifying standards and lines of argument Balanced judgements based on careful assessment of relevant information