Business Ethics

1. AN OVERVIEW OF
BUSINESS ETHICS
Prepared by:
Hamdoon Hussain
B.Sc (Economics), MBA HRM.
Karachi University Business School (K.U.B.S)

2. TOPICS :
• Business and Ethics definition.
• Business Ethics.
• Why study business Ethics?
• Benefits of Business Ethics.
• Framework for studying business Ethics.
• Ethics, society and religion.

4. BUSINESS & BUSINESS ETHICS:
BUSINESS:
• The word business comes from the word busy, and means doing things. In
a business, people work to make and sell products or services. ...
A business can earn a profit for the products and services it offers.
OR
• A business is defined as an organization or enterprising entity engaged in
commercial, industrial, or professional activities. Businesses can be for-profit
entities or non-profit organizations that operate to fulfill a charitable mission or
further a social cause.

5. “
”
BUSINESS IS JUST ADDING VALUES IN
THE CUSTOMER LIFE THROUGH YOUR
PRODUCT OR SERVICES
Ma’am
Engr. Tuba Akram ( BE Electrical, MBA HRM, MPhil HRM)

6. ETHICS
• Ethics demonstrate what is wrong or what is right
DEFINITION
Ethics is defined as a moral philosophy or code of morals practiced by a person or
group of people. An example of ethics is the code of conduct set by a business.

7. BUSINESS ETHICS
Business Ethics:
Business ethics is a form of applied ethics or professional ethics, that
examines ethical principles and moral or ethical problems that can arise
in a business environment. It applies to all aspects of business conduct
and is relevant to the conduct of individuals and entire organizations.

8. “
”
ETHICS DETERMINES BEHAVIOR IN
TERMS OF RIGHT OR WRONG
Ma’am
Engr. Tuba Akram ( BE Electrical, MBA HRM, MPhil HRM)

9. BUSINESS ETHICS
Business ethics refers to implementing appropriate business policies and
practices with regard to arguably controversial subjects.
Some issues that come up in a discussion of ethics include corporate
governance, insider trading, bribery, discrimination, social responsibility, and
fiduciary responsibilities.
The law usually sets the tone for business ethics, providing a basic guideline
that businesses can choose to follow to gain public approval.

10. WHY STUDY BUSINESS ETHICS?
Business ethics are important because they add a line of defense to protect
the company, enable company growth, save money and allow people to avoid
certain legal implications. Following are the major reasons to study business
ethics:
Identify ethical issues
There are vide ranges of issues related to business ethics. Previously implication of
rules and regulations and adherence to administrative orders were considered to be
the only issues that must be addressed but ethical issues vary in nature they could
be in form of below mentioned points:

11. • Harassment and Discrimination in the
Workplace.
• Health and Safety in the Workplace.
• Whistleblowing or Social Media Rants.
• Ethics in Accounting Practices.
• Nondisclosure and Corporate
Espionage.
• Technology and Privacy Practices.

12. Crisis Management
Every business goes through different crisis and the amount of
impact of every crisis is unknown to a business so business ethics
helps manage such crisis and aids to foster smooth running of
business activities and helps maintain peaceful relations between
employees and firm and with stakeholders.
Greater Scruitny of Ethical Misconduct
Ethical misconduct is a major business concern and organizations
are under greater scrutiny than ever by stakeholders.

13. Declining Ethical Standard
Misuse of company resources, abusive behavior, harassment, accounting fraud,
conflicts of interest, defective products, bribery and employee theft are all
problems cited as evidence of declining ethical standards in business and in other
areas like government or sports. Misconduct can occur in any organization.
Society’s Judgement Affects Business Goals
Regardless of an individual’s beliefs about a particular action, if society judges it
to be unethical or wrong, whether correctly or not, that judgment directly affects
the organization’s ability to achieve it’s business goals.

14. BENEFITS OF BUSINESS ETHICS
The field of business ethics is rapidly changing as
more firms recognize the benefits of improving ethical
conduct and the link between business ethics and
financial performances.
Among the rewards for being more ethical and
socially responsible in businesses are
 Increased efficiency in daily operations
 Greater employee commitment
 Increased investor willingness to entrust funds

15. BENEFITS OF BUSINESS ETHICS
• Improved customer trust and satisfaction
• Better financial performance

16. BENEFITS OF BUSINESS ETHICS
Ethics Contributes to Employee
Commitment

17. BENEFITS OF BUSINESS ETHICS
• Ethics Contributes to Employee Commitment
Employee commitment comes from employees who believe their future is tied to that of
the organization and their willingness to make personal sacrifices for that organization.
The more a company is dedicated to taking care of its employees, the more likely it is that
the employees will take of the organization.

18. BENEFITS OF BUSINESS ETHICS
Ethics Contributes to Employee Commitment
Issues that may foster the development of an ethical climate for employees may include
Safe work
environment
Competitive
salaries
Fulfillment of
all
Obligations
Absence of
abusive
behavior
Social
Programme

19. BENEFITS OF BUSINESS ETHICS
Ethics Contributes to Employee Commitment
• Employees perception of their firm as having an ethical enviromnent leads to
performance-enhancing outcomes within the organization.
• An organization with a strong, ethical corporate culture helps to increase group
creativity, decrease turnover, and increase job satisfaction.
• Trusting relationship within an organization between both managers and their
subordinates and upper management contribute to greater decision-making efficiencies.
• When companies are viewed as highly ethical by their employees, they were six times
more likely to keep their workers.

20. BENEFITS OF BUSINESS ETHICS
Ethics Contributes to Investor Loyalty
 Investors today are increasingly concerned about the ethics, social responsibility, and
reputation of companies in which they invest.
 Investors recognize that an ethical climate provides a foundation for efficiency,
productivity and profits; while negative publicity, lawsuits and fines can lower stock prices
and diminishes customer loyalty and threaten a company’s long-term viability.
 Gaining investors trust and confidence is vital to sustaining the financial stability of the
firm.

21. BENEFITS OF BUSINESS ETHICS
Ethics Contributes to Customer Satisfaction
 Customer satisfaction is one of the most important factors in successful business
strategy.
 By focusing on customer satisfaction, a company continually deepens the customer’s
dependence on the company, and as the customer’s confidence grows, the firm gains a
better understanding of how to serve the customer so the relationship may endure.
Successful businesses provide an opportunity for customer feedback, which can engage
the customer in cooperative problem solving.

22. BENEFITS OF BUSINESS ETHICS
Ethics Contributes to Profits
• A company cannot nurture and develop an ethical culture unless it has achieved
adequate financial performance in terms of profits.
• Ethical conduct toward customers builds a strong competitive position that has been
shown to positively affect business performance and product innovation.
• Companies that are perceived by their employees as having a high degree of honesty
and integrity have a much higher average total return to shareholders than do
companies perceived as having a low degree of honesty and integrity.

24. FRAMEWORK FOR STUDYING BUSINESS
ETHICS
• Applying Moral Philosophies to Business Ethics.
• Absolutes and Developing an Ethical Decision-Making Process.
• Social Responsibility and Stakeholders, Profits, and Integrity
• The Impact of Organizational Culture on Ethical Decision-Making.
• Ethical Issues in International Business, Employment, Technology and Privacy,
Marketing, and the Environment.
• Developing an Effective Ethics Program.

25. ETHICS, SOCIETY & RELIGION
• The Difference Between Ethics and Religion. When academics talk about ethics, they
are typically referring to decisions about right and wrong. ... While religion promotes
proper social behavior based on the teaching of a deity or a supreme being
etc. Ethics are based on logic and reason rather than tradition or injunction
• Emile Durkheim proposed that religion has three major functions in society: it provides
social cohesion to help maintain social solidarity through shared rituals and beliefs,
social control to enforce religious-based morals and norms to help maintain conformity
and control in society

26. CONCLUSION
Ethics are important not only in
business but in all aspects of life
because it is an essential part of the
foundation on which of a civilized
society is build. A business or
society that lacks ethical principles
is bound to fall sooner or later.

27. THANKYOU