Contents



                                                                                            1.      What is bu...
Business and values                                                                 The stakeholder model for identifying ...
Why is business ethics important for a company?                               The business case

                         ...
Simple ethical tests for a business decision




       • Transparency:
          Do I mind others knowing what I have dec...
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An Introduction to Business

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An Introduction to Business

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An Introduction to Business

  1. 1. Contents 1. What is business ethics? 2. Why is this subject important? An Introduction to Business 3. What can companies do about it? Ethics Senida Buza SIFE Alumni Vodafone Albania SIFE Albania Leadership Weekend 17 November 2007 2 C1 14 November 2007 Introduction to Business Ethics What are business ethics topics and issues? • Whistle blowing / Speaking up • Conflicts of interest • Bribery, corruption • Gifts, facilitation payments • Exec Pay 1. What is business ethics? • Supplier relations • Human rights • Environmental responsibility • Lobbying and • Security political donations • Data protection • Work/home balance • Governance • Supply chain policy • Fair treatment of • Child, sweatshop labour customers • Advertising and •Harassment, discrimination & bullying sales practices 3 C1 4 C1 14 November 2007 14 November 2007 Introduction to Business Ethics Introduction to Business Ethics Issues covered by Business Ethics What is business ethics? • Systemic issues─questions raised about the economic, political, legal, or Business ethics is other social systems within which businesses operate. These include questions about the morality of capitalism or of the laws, regulations, … about how business is conducted industrial structures, and social practices within which businesses operate. • Corporate issues─questions raised about a particular company. These … about the application of ethical values to business behaviour include questions about the morality of the activities, policies, practices, or organizational structure of an individual company taken as a whole. • Individual issues─questions about a particular individual within an … over and above the law organization and their behaviors and decisions. These include questions Law is mandatory (you must abide) about the morality of the decisions, actions, or character of an individual. Ethics is discretionary (you have a choice) Note: Where the law is not enforced there is a choice between adhering to and ignoring the law! 5 C1 6 C1 14 November 2007 14 November 2007 Introduction to Business Ethics Introduction to Business Ethics 1
  2. 2. Business and values The stakeholder model for identifying responsibilities and commitments The core values of a company include business values and ethical values – although the distinction might be blurred Employees Suppliers Business Values include: Ethical Values include: COMPANY Shareholders / Communities •… •… Providers of Incl governments, regulators Guardian of environmental responsibility finance OTHER INTERESTED PARTIES: Customers Competitors, NGOs Media 7 C1 8 C1 14 November 2007 14 November 2007 Introduction to Business Ethics Introduction to Business Ethics Relationship to other concepts Relationship to other concepts Business Ethics needs to be distinguished from Business Ethics needs to be distinguished from … Corporate Social Responsibility … ethical business, e.g. fair trade, social enterprise, Co-operative Bank HOW vs WHAT Business Ethics / Corporate Corporate Social Responsibility Responsibility “Doing things ethically” “Doing ethical things” i.e. “The way we do business” e.g. voluntary community and social programmes 9 C1 10 C1 14 November 2007 14 November 2007 Introduction to Business Ethics Introduction to Business Ethics External pressures on business Media Corporate & governance NGO debate Public interest perceptions 2. Why is the subject important? Growth of socially Board of responsible Company investment Legislation Conspicuous Customer corporate Employee demand misbehaviour concerns 11 C1 12 C1 14 November 2007 14 November 2007 Introduction to Business Ethics Introduction to Business Ethics 2
  3. 3. Why is business ethics important for a company? The business case • Helps to retain ‘licence to operate’ • Protects and improvers sales , reputation and company image; • Improvers faithfulness and engagement of its employees; • Increases reputation • Prevents business loss; • Increases employee loyalty and commitment • Empowers communication channels for interest groups. • Decreases risk • Some evidence for superior financial performance etc. 13 C1 14 C1 14 November 2007 14 November 2007 Introduction to Business Ethics Introduction to Business Ethics A code of ethics • A formal expression of your ethical commitments and responsibilities • Tells the world what the organisation considers its obligations to be • Tells staff what you expect of them • Guides them in what to do when they face ethical dilemmas • Helps ensure that employee behaviour is consistent within the organisation’s values 3. What can companies do about it? 15 C1 16 C1 14 November 2007 14 November 2007 Introduction to Business Ethics Introduction to Business Ethics Developing and implementing an ethics policy Ethical Decision-Making When does a business problem involve ethics? • Draft a code – Based on the company’s values • When it is not covered by the law – Issues model vs stakeholder model • It raises moral problems for a member of the team • Consult employees (and other stakeholders) when drafting the code • If it makes you reflect on what is a correct and incorrect response • Communication, awareness-raising and training • If you are forced to consider where your obligations and duties lie. • Provision of channels for speaking-up • Monitoring and review • Requires leadership and commitment at board or director level 17 C1 18 C1 14 November 2007 14 November 2007 Introduction to Business Ethics Introduction to Business Ethics 3
  4. 4. Simple ethical tests for a business decision • Transparency: Do I mind others knowing what I have decided? • Effect: quot;When in Rome, do as the Romans do.quot; Who does my decision affect or hurt? y • Fairness: Would my decision be considered fair by those affected? 19 C1 20 C1 14 November 2007 14 November 2007 Introduction to Business Ethics Introduction to Business Ethics Questions? Prisoners dilemma 21 C1 22 C1 14 November 2007 14 November 2007 Introduction to Business Ethics Introduction to Business Ethics Conclusion Reference • Nor does it mean that ethical behavior is always rewarded or that unethical • Institute of Business Studies IBS behavior is always punished. On the contrary, unethical behavior • Vodafone Albania Corporate Responsibility sometimes pays off, and the good guy sometimes loses. To say that ethical behavior is the best long-range business strategy means merely that, over the long run and for the most part, ethical behavior can give a company significant competitive advantages over companies that are not ethical. • Ethical behavior is the best long-term business strategy for a company 23 C1 24 C1 14 November 2007 14 November 2007 Introduction to Business Ethics Introduction to Business Ethics 4

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