Learning Objectives

An Overview of Business Ethics Ethics & Conduct Nature of Ethics Objectives of ethics Business Ethics Managerial Dilemmas Business Ethics & Profits Relationship between business & ethics Nature of ethics in business Characteristics of Business Ethics Ethical Decision Making

Ethics..
Latin term is ethicus Greek term is ethikos Means character or manner

Ethics..
Is said to be - the science of morals, moral principals or recognized rules of conduct.

Conduct..
Is a series of actions that, when taken together, can be termed as good or bad, right or wrong, moral or immoral.

Ethics.
Can also be termed as the science of character of a person expressed as right or wrong conduct or action.

Nature of Ethics:
Deals with human beings only.

Is a field of social science.

Is a normative science.

Deals with human conduct which is voluntary and not forced by persons or circumstances.

Objectives of ethics
Ethics establish moral standards and norms of behaviour. Make judgments on human behaviour based on these standards and norms. Prescribes moral behaviour and makes recommendations on how to or how not to behave.

Expresses opinion or attitude about human conduct in general.

Business Ethics

Business Ethics

Is the application of ethics in business.

It proves that business can be ethical & still generate profits.

Managerial Dilemmas
At times profit maximization & discharging of social responsibilities at the maximum limit cannot be carried out simultaneously.

One is bound to affect the other adversely.

A conflict arises between profit concern & social concern.

 A business is considered ethical if it tries to reach a trade off between pursuing its economic objectives & its social obligations

Business ethics & profits

Then..
Profit is a dirty word.. Jawarharlal Nehru ( 1950)

Now..
It is unethical for a company to make losses.

Business ethics & profits

Business ethics dictates that the first responsibility of business is to remain profitable & generate revenue for its shareholders and the society. It is unethical for a company to make lossess.

Relationship between business & ethics

The only objective of business is to reap profits & it has got nothing to do with ethics Church had taken upon itself the moral responsibility of business, taking moral decisions like business must remain closed on Sundays..

Relationship between Business & Ethics

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3

The Unitarian View The Separatist View

The Integration View

The Unitarian view

Was emphasized by the church

Business is a subset of the moral structure of the society.

Business & morality cannot be separated .

Business must play by the rules of morality set by the society.

Profit was a dirty word.

The Unitarian view

MORAL STRUCTURE

BUSINESS
MORAL ETHICS

The Separatist view

Was put forth by Adam Smith and Milton Friedman Asserted that the only goal of business should be profit maximization.

Ethics & morality play no part in business conduct.

Business should go on with the business of producing goods & services efficiently & leave the solution of social problems to governmental agencies & concerned individuals.

The Separatist view

SOCIETY
BUSINESS ETHICS

The Integration View

Was proposed by Talcott Parsons,

Sought to integrate ethical behaviour & business into a new area called BUSINESS ETHICS.

The view states that business is an economic entity & has the right & the need to make profits, but it must also discharge its obligations to the society where it exists & operates. Profits is certainly not a dirty word, but neither is morality & ethics in business.

The Integration view

GOVT. LAW

MORALITY & ETHICS

BUSINESS
MARKET SYSTEM SOCIETY

Nature of ethics in business

Overt ethical problems
Bribery, theft, Sabotage etc
Clear for every one to see

Covert ethical problems

Market wars, acquisitions, personnel policies etc.
Are more complex

Most business take care not to be so overt

Not so transparent

Defy ethical solutions

For a decision to be ethical, it should possess the following:

RIGHT
EQUITABLE GOOD PROPER FAIR JUST

That which is morally correct That which is just and equal

That which brings in the highest good for all concerned. That which is appropriate & acceptable
That which is honest & due. That justice is not only done but also seen to have been done.

Ethics is unstructured & abstract in concept.

If an ethical decision merely results in benefit to oneself, then it is not an ethical decision. The very concept of being ethical means, that it results in some good for the larger society and not just for oneself.

Characteristics of business ethics

1. Ethical decisions vary with the individual perspective of different persons.

2. Ethical decisions are not limited to themselves but affect a wide range of other situations as well.

3. Most ethical decisions involve a trade off between costs incurred & benefits received.

4. The consequences of most ethical decisions are not clear.

5. Every person is individually responsible for the ethical or unethical decision & action that he or she takes

6. Ethical decisions are voluntary human actions.

Group Discussion
For & against business ethics

Group Activity

THANK YOU