Business Ethics Chapter 1

1. DO ETHICS CHANGE WITH TIME?
COMMENT !
Business Ethics - Hassan Khawar 1

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3. Business Ethics - Hassan Khawar 3

4. Business Ethics 7th Ed. By Richard T DeGeorge
What is Ethics?
 Meaning of business ethics
 How is ethics related to Business and
corporate world
 Governance, ethics and wellbeing
How to have ethical Organizations
Business Ethics - Hassan Khawar 4

5.  Ethics may be defined as the set of moral
principles that distinguish what is right from
what is wrong.
 Ethics evaluate human practices by calling
upon moral standards.
 It may give prescriptive advice on how to act
morally in a given situation.
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6. ETHICS NORMS
 Do not harm other
people
 Do not lie to others
 Do not steal
 Never hide the facts
when giving a report
 Do not eat with mouth
open
 Do not chew gum in
class
 Do not wear necktie
that does not match
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7.  Ethics are broadly described in the literature as moral principles about right
and wrong, honorable behavior reflecting values, or standards of conduct.
 Litmus test for standards
 Honesty, openness, responsiveness, accountability, due diligence, and
fairness are core ethical principles.
 Ethics are a branch of philosophy with no clear-cut definition of what
behaviors are ethical and which are unethical when judging one’s behavior.
 There is no general or global consensus for defining ethical behavior for
individuals, as it may change from time to time and from one place to
another place.
 There is no universal measure or standard as to what constitutes ethical
behavior.
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8.  Quran
 Sunnah
 Standard code of Life for all
 Full choices to even Non Muslims
 Business Ethics well scripted
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9.  What is Ethics?
 Meaning of business ethics
 How is ethics related to Business and
corporate world
 Governance, ethics and wellbeing
How to have ethical Organizations
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10.  There is increased interaction between the board of directors, audit
committees, internal auditors, external auditors, executives, and
employees in general regarding ethical conduct in the workplace.
 Business ethics are most simply described as:
a process of promoting moral principles
and standards that guide business
behavior or we can call these as a form
of applied ethics in business as
applicable to both the individuals as
well as the Organizations

11.  What is Ethics?
 Meaning of business ethics
 How is ethics related to Business and
corporate world
 Governance, ethics and wellbeing
How to have ethical Organizations
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12.  Philosophers and writers viewed ethics as a matter of
choice.
 Individuals must make choices in their lives and
businesses BUT as per existing ethics in enterprise.
 People in government make choices, people in
educational institutions make choices, people in
businesses make choices; everyone is forced to make
choices, and even the choice not to choose is a
decision.
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13.  Revolution in Business world by IT creativeness, thus
new Ethical issues of Risk, Privacy etc
 Business goes Global making ethics variations difficult
to match for MNCs
 Different laws and cultures, level of development
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14.  What is Ethics?
 Meaning of business ethics
 How is ethics related to Business and
corporate world
 Governance, ethics and wellbeing
How to have ethical Organizations
Business Ethics - Hassan Khawar 14

15.  Ethical problems may vary from one person to another
according to the factors influencing the Ethical Behavior:
 Legal Interpretations: In secular societies, legal
interpretations are based upon contemporary values and
standards according to time, country or situation.
 Organizational Factors: The organization too can affect
or influence participant’s behavior based on the degree of
commitment of the organization's leader conduct
 Individual Factors: Individuals come to work with
different values based on the personal values and morals,
family influences, peer influence and life experiences.
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16. Ethical issues may vary from one organization to
another according to the factors influencing the
Ethical Behavior:
 conflicts of interest,
 quality control issues,
 discrimination in hiring and promotion,
 misuse of proprietary information,
 abuse of company expense accounts,
 misuse of company assets,
 environmental pollution, environmental destruction,
 etc.
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17. Key factors in promotingethical workplace
management behavior
direct supervisors
behaviour
positive reinforcement
compensation (bonus
+salary)
behaviour of peers
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18. Reasonswhy peoplemake unethical decisions
lack of personal integrity
job dissatisfaction
financial rewards
pressure to meet goals
ignorance of code of
conduct
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19. Aspects that cause incentives conflicts
high levels of stress
long hours
fast-paced environment
inflexible schedule
highly competitive
environment
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Lack of trust in Allah

20. results pertaining to questionable
behaviorin the workplace environment
stealing petty cash
cheating on expense
reports
taking credit for another
person’s accomplishment
lying on time sheets
about hours worked
other results
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21. Business Ethics - Hassan Khawar 21
Marking attendance in time
when late
Wasting time in gossips/
social media

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23. Four different levels of business ethics have been identified based
on what type of business and how their actions are evaluated.
1. The society level, which defines ethical behavior and assesses
the effect of business on society.
2. The industry level, which suggests that different industries have
their own set of ethical standards (e.g., chemical industry vs.
pharmaceutical industry)
3. The company level, under which different companies have their
own set of ethical standards
4. The individual manager level, at which each manager and other
corporate participants are responsible for their own ethical behavior
CONSEQUENTLY, one feasible way to judge ethical behavior is to
focus on determinants of business ethics and behavior such as
corporate culture, incentives, opportunities, and choices.

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25. How to have Ethical Organizations
Ethical behaviors - Approaches
 Deontological approach (Immanuel Kant)
 Utilitarianism approach (John Stuart Mill’s
Greatest Happiness)
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26.  Sense of employee responsibility.
 Freedom to raise concerns without fear of
retaliation.
 Managers modeling ethical behavior and
expressing the importance of integrity.
 An understanding by leadership of the pressure
points that drive unethical behavior and how to
find and fix these areas of pressure.
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27. 1. Written code of business conduct.
2. Training
3. Internal reporting of violations
4. Self-govern their activities by
monitor compliance with all
applicable laws and regulations.
5. Participation/Awards.
6. Be accountable to the public (Society)
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28.  Deontological approach (Immanuel Kant)
 Utilitarianism approach (John Stuart Mill’s
Greatest Happiness)
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29.  Consequentialism
 "actions are right in proportion as they tend
to promote happiness, wrong as they tend to
produce the reverse of happiness." (John
Stuart Mill's Greatest Happiness Principle)
 In other words, judge an action by the total
amount of happiness and unhappiness it
creates

30.  'Duty Based' Ethics
 Deontologists deny that what ultimately
matters is an action's consequences.
 They claim that what matters is the kind of
action it is. What matters is doing our duty.
 There are many kinds of deontological theory
◦ e.g., The 'Golden Rule' - "Do unto others as you'd
have them do unto you."

31.  Immanuel Kant (1724-1804) is the most influential
deontologist.
 Rejecting Consequentialism: "A good will is good
not because of what it effects or accomplishes."
Even if by bad luck a good person never
accomplishes anything much, the good will would
"like a jewel, still shine by its own light as
something which has its full value in itself."

32.  Kant claims that all our actions should be judged
according to a rule he calls the Categorical
Imperative.
 "Act in such a way that you treat humanity,
whether in your own person or in the person of
another, always at the same time as an end and
never simply as a means."
 "Act only according to that maxim [i.e., rule]
whereby you can at the same time will that it
become a universal law."
 Important to treat people as autonomous agents

33.  A central element in many deontological
theories is the idea of autonomy
 Autonomy = self + rule
 Roughly, the idea is that people must be
respected as autonomous agents.

34.  Rationality
◦ only informed decisions are truly autonomous
 Freedom of Action
◦ lack of coercion
 Freedom of Choice
◦ availability of alternative options

35.  Deontology: What if doing your duty has
repugnant consequences?
 Consequentialism: What if you have to do
something that seems wrong in order to
produce the best consequences?
 Convicting the innocent

36.  1. Autonomy
 2. Beneficence
 3. Non-maleficence
 4. Justice
◦ 1 & 4 are deontological
◦ 2 & 3 are consequentialist
 Assessing consequences requires attention to
the concrete details of the case
 It is really possible to have it both ways?