Business Ethics Prepared By : OMAR SALEMMOHAMMED AL-FERI HANI AL-NAJJAR AHMED ABU-ASSIUNDER SUPERVISION : MR.NIZAR NAIM
Business EthicsTitles :• Definition of business ethics• Importance of business ethics• Ethical business practices• Unethical business practices• Cost of using unethical business• Business ethics and organization• Business ethics and social responsibility• Factors that influence business ethics• Can ethical dilemma affect on business ethics?• Business ethics theories• Business ethics and globalization
Definition of business ethicsBusiness ethics are ethics that refer to the moral rules and regulations governing the business world."Business ethics is the study of business situations, activities, and decisions where issues of right and wrong are addressed.“Business ethics are that functions which leads to choosing right decision at right time which leads for the welfare of not only business owners but also society, consumers, stakeholders and its employees.Business ethics now days have become so important that no business can survive in market without following them.
Importance of business ethicsBusiness ethics help the organization to protect their reputations .Business ethics is needed to make business activities fair and reasonable for consumers .Business ethics is especially important in dealing with customers , including customer service and customer issues .Business ethics help the organization in determining obligations and duties toward individual and groups outside the organization .
Ethical business practices • Following are a few ethical business practices that should be followed to build an honest reputation and ensure smooth running of the organization. Investors: Ensuring safety of their money and timely payment of interest . Employees: Provision of fair opportunities in promotions and training, good working conditions, and timely payment of salariesCustomer: Complete information of the service and product should be made available.Personal information of the customers should not be used for personal gain . Competition: Unscrupulous tactics and methods should be avoided while handling competitors. Environment: Polluting industries should ensure compliance with the government norms regarding air, water and noise pollution.
Unethical business practices Resorting to dishonesty, trickery or deception Greed to amass excessive profit Creation of false documents to show increased profits Avoiding penalty or compensation for unlawful act Harming the environment byexceeding the government prescribed norms for pollution Lack of investigation
Cost of using unethical businessIf the organization acts in illegal way the organization is forced to have a supervisor from outside the organization , this supervisor is considered as ethics monitor not as control manager , he is responsible for the evaluating the performance of the organization such as the process of decision making .so :The organization should have members resist the employee who try to behave in illegal and unethical ways for their interest at the expense of interest of the organization .
Business Ethics and organization• Business Ethics helps the managers in establishing the organizational goal• Business Ethics helps the managers to determine what is the best way to achieve the organizational goals . Business ethics determine if the organization is allowed to produce harmful product . Business ethics specify what actions should be undertaken to make high profits.
Business Ethics and social responsibility• Ethics can define the organizational social responsibility by : Showing the obligations and duties toward individual and groups outside the organization Establishing an ethical code that describe the acceptable behaviors enforced by punishment system keep the safety of it’s employeesProtect the nature environment by both producing a safety products and reduce pollution cases
Factors that influence Business EthicsLeadershipIf the leader can lead in ethical ways and motivates the employees the employees will perform in legal ways.PersonalityIs the pattern of relatively enduring ways the a person feels . Thinks and behaviors .Personality has been shown to influence career choices , job satisfaction , stress , leadership and some aspects of job performance.Determinants of personality : Nature and nurture .Company policySelection, recruiting , training , promotion programs , accepting diversity .
Cont …External environmentPolitical stability is the most important external factor that affect on business ethics . Ex: civil war .Economic is also important specially in recession and inflation .CompetitorsIf one of the competitors act in illegal way and he gains more profits we must not take in consideration that the main reason for achieving high profits that is referred to illegal way. ( harmful products )
Can Ethical Dilemma affect on business ethics ? ..Ethical dilemma can be defined as the quandarymanagers experience when they have to decide ifthey should act in away that might benefit otherpeople or groups and is the right thing to do eventhough doing so might go against their own andtheir organization interests.The ethical dilemma here is to decide which courseof action is the lesser of two evils
Business Ethics TheoriesBusiness owners and managers can use an ethics theory and select the most appropriate for using in their operationsA few different business ethics theories exist , these are : The utilitarian theory Rights theory Justice theory Common good theory Virtue approach theoryThese theories can be used on their own or in combination with each other. Each theory includes specific traits or characteristics that focus on specific ethical principles that can help companies correct business issues.
Cont …1. The utilitarian theoryIs the oldest theory, focuses on using ethical actions that will promote the most good or value among a society while limiting the amount of harm to as few people as possible , it was propagated by many philosophers, such as Jeremy Bentham, James Mill, and Mills son John Stuart Mill. Businesses can use this theory to ensure the outcome of various situations helps the maximum amount of stakeholders.2. Rights theoryIs based on the belief that all individuals have rights in life and should be treated with respect and dignity , Morals play a large role in this because individuals must personally use ethical behavior in order to achieve the end goal without mistreating people.3. Justice theoryis where all humans are treated equally through society, regardless of rank, position, class, creed, or race. This is also known as the fairness approach.
Cont …4. The common good theorypromote the common values and moral or ethical principles found in a society. This varies from place to place, based on countries specific cultural or societal beliefs. For example, the moral principles found in Japan will often be different than those in the United States.5. The virtue theoryis a bit more difficult for businesses to implement, as its approach focuses on following ethical principles that should be evident in society. These principles or virtues seek to replace the current values if they do not bring about the most good or best development of humanity.
Business Ethics and GlobalizationThe world has changed and new values have been developed.as the global economy expands, the companies will being to dealmore with others from different cultures , values , beliefs and religions.sothe global business world requires companies to take into account its people values to follow ethically practices . personal values need to be considered when a company is formingits policies .so briefly we can note that many companies make large effort to be sensitiveand closed to personal values .