Ethics is a subject that deals with human being.
Human by their nature are capable of judging
between right and wrong, good and bad behavior.
Thus, the question of ethics arises, as the human
beings are associated with values and morals.
Nature of Ethics
It is associated with values and morals.
Ethics deals with human conduct i.e. voluntary,
force by any persons or circumstances.
Ethics is both Science & Art, but it is more a science,
because it provides systematic knowledge about
moral behaviour and conduct of human beings.
Objectives of Ethics
Ethics deals with human behavior. It assesses
whether a particular act or decision taken by an
individual is moral or not.
To establish moral standards and norms of the
To judge human behavior based on these standards
To assess human behavior and express an opinion
or attitude about the behavior.
To set a standard or code for the moral behavior and
make recommendations about the desired behavior.
It refers to the application of ethical judgements to
Need for Business Ethics
All businesses exist and operate within society and
therefore they should contribute to welfare of
To survive in the market, businesses should gain
loyal customers and perform social responsibility.
Nature of business ethics
Most businesses encounter two types of ethical
problems known as overt and covert ethical
Overt ethical problems deal with bribery, theft,
collusion, etc. They are clear.
Where as covert ethical situations occur in corporate
acquisitions, marketing and personnel policies, capital
investment etc. They are complex, clear and have
skillful ethical solutions.
Business Ethics and
Survival is the name of any business game. If a company
wants to survive it has to think about its profits. Most
businesses operate on the principle that profit is not
linked to ethical consideration.
Eg: Johnson & Johnson
Johnson & Johnson is often recognized as a company
whose ethical behavior is exemplary.
The company clearly prioritizes its responsibilities in its
first to its customer,
second to its employees,
third to its management
fourth to the communities in which it operates,
fifth to its stockholders, “Business must make a sound
profit,” states the credo in describing fifth responsibility,
but at Johnson & Johnson that concern comes after the rest.
A firm that is not performing well is considered as
liability and burden to the society as it cannot discharge
its responsibility to the community welfare of its
employees, revenue to shareholders, and meet customer
Thus profit today is recognized as a characteristic of the
success of a business and justification for its existence.
Stages of Ethical Consciousness in
Law of Jungle
This part of business ethics overlaps with the
Philosophy of business, one of the aims of
which is to determine the fundamental purposes
of a company.
If a company's main purpose is to maximize the
returns to its shareholders, then it should be
seen as unethical for a company to consider the
interests and rights of anyone else.
Corporate Social Responsibility
Issues regarding the moral rights and duties
between a company and its shareholders:
Fiduciary responsibility, Stakeholder concept Vs.
Ethical issues concerning relations between different
Political contributions made by corporations.
The misuse of corporate ethics policies as marketing
Ethics of Accounting
Securities fraud Forex Scams
Ethics of Human Resource
The ethics of Human
covers those ethical
relationship, such as
the rights and duties
the privacy of
the privacy of
Issues relating to
the fairness of the
contract and the
balance of power
• Slavery System
Safety and health
Ethics of sales and
Marketing, which goes beyond the mere
provision of information about a product,
may seek to manipulate our values and
behaviour. To some extent society regards
this as acceptable, but where is the ethical
line to be drawn?
Marketing ethics overlaps strongly with
media ethics, because marketing makes
heavy use of media.
Price Fixation, Price Discrimination, Price
Specific marketing strategies:
Green wash, Spams (electronic), Planned
Content of advertisements:
Attack ads, concealed messages, products
regarded as immoral or harmful
Children and marketing:
Marketing in schools.
Black markets, Grey Markets
This area of business ethics usually deals with the
duties of a company to ensure that products and
production processes do not cause harm.
Some of the more acute dilemmas in this area arise
out of the fact that there is usually a degree of
danger in any product or production process and it
is difficult to define a degree of permissibility.
Defective, addictive and inherently dangerous
products and services (e.g. tobacco, alcohol,
weapons, motor vehicles)
Ethical relations between the company and the
(Pollution, Carbon emissions trading, Environmental
Ethical problems arising out of new technologies:
Genetically modified food, Mobile phone radiation
and its effects on health.
Product testing ethics:
Animal testing, use of economically disadvantaged
groups (such as students) as test objects.
Environment friendly bike
Green initiatives in business range from
environmentally friendly technological
innovation, green tourism, green community,
environmental campaigning and environmental
Ethics of intellectual property,
knowledge and skills
Knowledge and skills are valuable but not easily
"ownable" as objects. Nor is it obvious who has the
greater rights to an idea: the company who trained
the employee, or the employee themselves?
The country in which the plant grew, or the
company which discovered and developed the
plant's medicinal potential?
As a result, attempts to assert ownership and
ethical disputes over ownership arise.
Misuse of the
systems to stifle
Employee Raiding: The
practice of attracting
key employees away
from a competitor to
take unfair advantage
of the knowledge or
skills they may
The practice of
employing all the most
talented people in a
regardless of need, in
order to prevent any
The computer and the WWW are two of the most
significant inventions of the twentieth century. There are
many ethical issues that arise from this technology.
It is easy to gain access to information. This leads to data
mining, workplace monitoring, and privacy invasion.
Medical technology has improved as well.
Pharmaceutical companies have the technology to
produce life saving drugs.
These drugs are protected by patents and there are no
generic drugs available. This raises many ethical questions.
Comparison of business ethical traditions in different
countries. They may be on the basis of their respective
GDP and [Corruption rankings].
Ethical issues arising out of international business
Biopiracy in the pharmaceutical industry.
Issues such as Globalization and Cultural Imperialism.
Varying global standards
The use of Child Labour.
The way in which multinationals take advantage of
international differences, such as outsourcing production
(e.g. clothes) and services (e.g. call centers) to low-wage
Foreign countries often use dumping as a
competitive threat, selling products at prices lower
than their normal value. This can lead to problems in
domestic markets. It becomes difficult for these
markets to compete with the pricing set by foreign
In 2009, the International Trade Commission has been
researching anti-dumping laws. Dumping is often
seen as an ethical issue, as larger companies are taking
advantage of other less economically advanced
Religious Views on Business
The historical and global importance of religious views
on business ethics is sometimes underestimated in
standard introductions to business ethics.
In Asia and the Middle East, religious and cultural
perspectives have a strong influence on the conduct of
business and the creation of business values.
Islamic banking, associated with the avoidance of
charging interest on loans.
Traditional Confucian disapproval of the profit-seeking
Benefits of Managing
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Promotes a strong
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