1.
Importance of
Business Ethics
Presented By :
Naveed Ahmed – M.Arslan – Hafiz Rohail

2.
Introduction
• Ethics concern an individual's moral judgment about right and
wrong. Decisions taken within an organization may be made by
individuals or groups, but whoever makes them will be influenced by
the culture of the company. The decision to behave ethically is a
moral one; employees must decide what they think is the right
course of action. This may involve rejecting the route that would
lead to the biggest short-term profit.

3.
Introduction
Ethical behavior and corporate social responsibility can bring
significant benefits to a business. For example, they may:
• Attract customers to the firm's products, thereby boosting sales and
profits
make employees want to stay with the business, reduce labor
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.
Unethical behavior or a lack of corporate social responsibility, by
comparison, may damage a firm's reputation and make it less
appealing to stakeholders. Profits could fall as a result.

4.
Business Ethics
• Business Ethics means conducting all aspects of business and
dealing with all stakeholders in an ethical manner.

5.
Foundations of Ethical Behavior
Treat others as you would be
treated
– Respect
– Honesty
– Trust

6.
Nature of business ethics
Business ethics has a five part structure:
1. The specification of moral judgment
2. Moral judgment and the moral standard
3. Justification of moral judgment
4. Logical reasoning and moral judgment
5. Moral judgment and moral responsibility

7.
Organizational/Business Ethics
Why is it important ?
• Ethics influence and contribute to:
• Employee commitment.
• Investor and customer loyalty and confidence.
• Legal problems and penalties.
• Customer satisfaction.
• The ability to build relationships with stakeholders.
• Cost control.
• Performance, revenue, and profits.
• Reputation and image.

8.
Ethical Issues Relating to Business
• Honesty—communication and behavior consistent with facts
• Disclosure of information
• Promises/commitments
• Laws and professional standards
• Representation of others like shareholders (applies to board
members)
• Unfair competition
• Refrain from bribes and excessive gifts (that sway judgment)
• Avoid quid pro quo transaction
• Comply with “anti-trust” laws (these relate to pricing, monopolistic
practices)

9.
Ethical Issues Relating to Business
• Just compensation
• Respect intellectual property (product piracy)
• Treat employees fairly
• Respecting rights of others
• Treat others with fairness and respect regardless of age, religion,
ethnic group,
• sex, economic status, etc., especially children, women, and
subordinates
• Respect the community you operate in by paying fair share of
economic costs
• you create
• Respect others and future generations by treating the environment
well

10.
A Crisis in Business Ethics
• Consumer trust of businesses is declining
• No sector is exempt from ethical misconduct
• Stakeholders determine what is ethical/unethical
– Investors
– Employees
– Customers
– Interest groups
– Legal system
– Community

11.
Organizational and Global Ethical
Culture
Ethical culture:
Describes the component of corporate culture that captures the
values and norms that an organization defines as appropriate
conduct
• Creates shared values
Goal is to:
• Minimize need for enforced compliance
• Maximize utilization of principles/ ethical reasoning

12.
Ethics Contributes to Employee
Commitment
• Comes from employees who believe their future is tied to the
organization’s
• Are willing to make personal sacrifices for the organization
– The more dedication on the part of the company, the greater the
employee dedication
– Concerns include a safe work environment, competitive salaries
and benefit packages, and fulfillment of contractual obligations

13.
Ethics Contributes to Investor Loyalty
• Companies perceived by their employees as having a high level of
honesty and integrity are more profitable than companies with a low
level of honesty and integrity
• Ethical climates in organizations provide platform for:
– Efficiency
– Productivity
– Profitability

14.
Ethics Contributes to Customer
Satisfaction
• Consumers respond positively to socially concerned businesses
– Being good can be extremely profitable
• Customer satisfaction dictates business success
• A strong organizational ethical climate
places customers’ interests first
• Research shows a strong relationship between ethical behavior and
customer satisfaction

15.
Concluding Remarks
• An integrity approach to business can yield strengthened
competitiveness: it facilitates the delivery of quality products in an
honest, reliable way. This approach can enhance work life by
making the workplace more fun and challenging. It can improve
relationships with stakeholders and can instill a more positive
mindset that fosters creativity and innovations among the
stakeholders.
• The purpose of ethics is to enhance our lives and our relationships
both inside and outside of the organization.

16.
Thank You