2. Defining Business Ethics
Is the process of evaluating decisions, either pre or post,
with respect to the moral standards of the society’s culture.
Background :
- Stakeholders in business
- Globalization
- Conflicting claims
3. Importance of Ethics in Business
Essential for long-term business succes
Macro Perspective • The right to own and control private property
• Freedom of choice in buying and selling goods & service
(within economic system) • Availability of accurate information concerning goods &
service
• Bribery - Theft
• Coercive - Unfair Discrimination
• Deception
Micro Perspective • Commitment in all situation
(individual firm) • Produce good product and stand behind it
• Trust in Employee relation
• Trust in Supplier Relation
• Trust in Customer Relation
4. Moral Standards
Business ethics use moral standards when
making business decisions; not the determination
of standards.
Applied ethics not a normative ethics
Moral standards consist of moral norms & moral
principles.
Moral norms prohibit certain types of behavior
such as lying, stealing, and killing.
Moral principles provide more general guidelines
for behavior
5. Moral Principles of Business Ethics
Non-
Consequentialist Consequentialist
(deontologism)
Focus on outcome or end result Based on rules
Egoism Utilitarianism Right Justice
Human right 1. Distributive
Standard that focuses Greater net utility than Not to violate other’s right 2. Retributive
on self-interests other decision 1. Life & Safety (punishment for
Short term & long term alternatives. 2. Truthfulness wrongdoing)
Can benefit or harm Single act 3. Privacy 3. Compensatory
the society Series of act 4. Freedom of Conscience (compensating the
5. Free Speech party injured by
6. Private property the wrongful
act)
6. Question from the ethical theories
Egoism: will the action lead to other people behaving toward
me in a way I would like?
Utilitarianism: does the action yield the greatest net benefits?
Rights: does the action negatively affect someone’s moral
rights?
Justice: does the action give a fair distribution of costs and
benefits among those affected?
7. Ethical Check Questions
Is it legal ?
Will I be violating either civil law or company policy?
Is it balanced ?
Is it fair to all concerned in the short term as well as the
long term? Does it promote win-win relationship?
How it will make me feel about myself?
Will it make me proud? Would I feel good if my decision
was published in the newspaper? Would I feel good if my
family knew about it?
