ON THE TOPIC
ETHICAL ISSUES IN BUSINESS
G ROUP – 3
UNDER THE GUIDANCE OF
RAJASHREE S. KINI
L AYNA M ELBA
WHAT ARE BUSINESS ETHICS ?
• Business ethics are moral principles that guide the way a business behaves.
• Acting in an ethical way involves distinguishing between “right” and
“wrong” and then making the “right” choice.
• Ethics is a branch of philosophy which seeks to find answers about the
moral concepts like bad, good, evil, right, wrong, etc.
• Business ethics is the study of business situations, activities, and decisions
• Fairness in business dealings means being objective and having
an interest in creating a win-win situation for both parties
whether that is employer-employee or company-client.
• Honesty applies to every part of running a business while
making a profit.
• Personal ethics are usually considered as the foundation for
running ethical businesses.
• Ethical behaviour and corporate social responsibility can bring
significant benefits to a business.
• For example:
• Attract customers to the firm's products, thereby boosting sales
• Make employees want to stay with the business, reduce labour
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 share price
high, thereby protecting the business from takeover.
ETHICAL ISSUES IN BUSINESS
• Due to increased emphasis on the business ethics over last three decades,
this field is suffering and is troubled by the lack of proper directions and is
struck in the issues like logic, reasons etc.
• The past conception of the companies about the ethical issues in business
was related to the administration of rules, regulations in the organizations.
• Today, people from the top management level and the business owners
have understood that this concept of ethical issues in business is far
superior than handling the rules and regulations and their effective
• There are wide ranges of issues related to the business ethics
currently observed by the market analysts. today,
• Ethical issues can be varying in nature.
• professional ethics .
• Employee right issues which can be further divided into different
• Functional areas of business .
• In the current business environment, the issues like fairness, justice
and honesty are the main issues that are posing complex dilemma to
• Any wrong or biased decision can have a profound impact on the
goodwill of the company as well as its market position..
• If they choose to use legality and profitability as their measurement
in determining what is right from wrong then business ethics will
surely become irrelevant..
BUSINESS FUNCTION ETHICS
• The function of this business unit is to provide understanding about
the four basic aspects of a business- Product, Price, Place and
• It provides interface to the management related not only to the
customers but the other related parties like media, investors,
distribution system, supply chain partners, legal framework, as well
• Marketing can be defined as “practices that emphasize transparent,
trustworthy, and responsible personal and organizational marketing
policies and actions that exhibit integrity as well as fairness to
consumers and other stakeholders”
• Accounting ethics articles help in understanding the importance of
business code of ethics, besides the profit/loss, balance sheets and
• Enhancing the financial figures and statements which is manipulated
for the purpose of achieving something which is unethical.
• The most fundamental or essential ethical issues that businesses
must face are integrity and trust.
• When customers perceive that a company is exhibiting an
unwavering commitment to ethical business practices, a high
level of trust can develop between the business and the people
it seeks to serve.
• Diversity Issues :
An ethical response to diversity begins with
recruiting a diverse workforce, enforces equal opportunity in all
training programs and is fulfilled when every employee is able to
enjoy a respectful workplace environment that values their
contributions. Maximizing the value of each employee’s contribution
is a key element in your business's success.
• Decision-Making Issues : Ethical decision-making processes should
centre on protecting employee and customer rights, making sure all
business operations are fair and just, protecting the common good
and making sure individual values and beliefs of workers are
• Compliance and Governance Issues : Businesses are expected to fully
comply with environmental laws, federal and state safety regulations,
fiscal and monetary reporting statutes and all applicable civil rights
laws. Commonly it states that, no one may ask any employee to break
the law, or go against company values, policies and procedures.
• Social Networking Ethics : Comments regarding employers or coworkers posted on social networking websites are costing employees
jobs across the country. (eg facebook)
• The ethical and legal challenges surrounding the use of social media
and its consequences in the workplace affects the business industry as
a whole because employers across the nation are setting policies
regarding employee use of these websites while working and even
what these workers can say when off the clock.
• The line between an employer's right to monitor employees and an
employee's right to privacy can easily blur in this climate it has to be
• Harassment in the Workplace : Maintaining professional workplace
relationships between employees is a continuing challenge for
employers regardless of the industry.
• This challenge can become more difficult when the image companies
choose to project has a significant sexual charge.
• There's never an excuse or a justifiable reason for harassment of any
kind in any workplace, though a willingness to use sexually charged
imagery in advertising may indicate a working climate where harmful
behaviours can occur with costly lawsuits resulting from permissive
ADVANTAGES OF BUSINESS ETHICS
• Business ethics offer companies a competitive advantage..
• Good will of the firm hikes depending on its responds towards it
• Productivity through rigid, firm and sincere workers as well as other
business chain members.
• Through increasing morale and trust business can increase their
• Publicity due to well and ethical performance of the company. ‘Words
of mouth’ is the fastest and best source to gain market. Thus a good
performance will helps in publicity through words of mouth of general
• Acceptance of product.
For example : most of consumers prefer classmates notebook of ITC
just because it is eco-friendly and also it contributes a part of its profit
for social welfare.
DISADVANTAGES OF BUSINESS ETHICS
• Business ethics reduce a company's freedom to maximize its profit..
• Diversity in achievements.
For example. A company may diverse from its achievements and turn
towards any other directions.
• Extra expenditure in some cases.
For example, in some cases company may incur extra cost for solving
certain ethical issues like accident compensation, solution for
• Now that we understand the idea of business ethics, it is important to
practice good ethical behaviour. Leading by example; teaching by
example; being a role model; these are all things that will come if you
practice ethical behaviour and chose to make the right decisions.
• One of the most formidable challenges is avoiding immoral
management, and transitioning from an amoral to a moral
management mode of leadership, behavior, decision making, policies
and practices. Moral management requires ethical leadership. It
entails more than just "not doing wrong."
• Moral management requires that managers search out those
vulnerable situations in which amorality may reign if careful,
thoughtful reflection is not given by management. Moral management
requires that managers understand, and be sensitive to, all the
stakeholders of the organization and their stakes.
• If the moral management model is to be achieved, managers need to
integrate ethical wisdom with their managerial wisdom and to take
steps to create and sustain an ethical climate in their organizations. If
this is done, the desirable goals of moral management are achievable.