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BUSINESS
ETHICS
&
VALUES
2. VALUES
• Ideals or Beliefs that a person holds desirable or
undesirable.
• Abstract ideals that shape an individual’s thinking and
behavior – a moral compass
• Instrumental values – certain way of behaving is
appropriate in all situations – “means”.
• Terminal values – enduring belief in the attainment of a
certain end state – “ends”.
3. A moral compass
These abstract ideals can result
from
– Religion
– Philosophy
– Family teachings
4. Instrumental values
• They are the core values, permanent in nature, comprise
personal characteristics and character traits.
• As the means to an end they become the ingrained ways of
behavior:
– Rituals
– Politesse
– Good habits
– Honesty
– Sincerity
– Ambition
– Independence
5. Terminal values
• Terminal values are those things that we
can work towards or we think are most
important and we feel are most desirable.
• Terminal values are desirable states of
existence.
• With the end always in sight:
– Heaven
– Respect
– Financial Success
– Personal Independence
– Power
– Happiness
– Self Respect
– Freedom
6. Ethics: What Does It Really Mean???
• Derived from Greek word ‘Ethikos’ meaning
Character or Manners
• Science of character of a person expressed as right
or wrong conduct or action.
• Set of moral principles prescribing code, explains
what is good and right, or bad and wrong.
7. MEANING
•Ethics is a set of rules that define right and wrong
conduct.
•Business ethics can be defined as written and
unwritten codes of principles and values that
govern decisions and actions within a company.
•In the business world, the organization’s culture
sets standards for determining the difference
between good and bad decision making and
behavior.
8. Meaning of Ethics
Character
of a man
Conduct
of a person
Series of
Actions
Good or
Bad,
Right or
wrong,
Moral or
Immoral
Moral
Standards
Decided by Leads to
Taken
together
Considered As
Known as
Moral
Judgement
Requires
By which
we can
Judge again
9. Objective of Ethics
• Studies human behavior and makes evaluative assessment about
them as moral or immoral
• Establishes moral standards and norms of behavior
• Makes judgment upon human behavior based on these standards
and norms
• Prescribes moral behavior and makes recommendations about how
to or how not to behave
• Expresses an opinion or attitude about human conduct in general
10. Business Ethics: What Does It Really Mean???
• comprises principles and standards that guide
behavior in the world of business
• According to John Donaldson “Business Ethics
can be described as the systematic study of
moral (ethical) matters pertaining to business,
industry or related activities, institutions, or
practices and beliefs. It is the systematic
handling of values in business and industry.”
11. Unitarian View: Business & morality cannot be separated
and it must play by the rules of ethics of the community.
Views on relationship between Business & Ethics
Moral Structure
Business
Moral Ethics
12. Separatist view of Ethics
• Proposed by Adam Smith and Milton Friedman:
Business is a distinct entity and does not include
ethics and morality
Business Ethics
13. Integration view of ethics
• Proposed by Talcott Parsons
Law
Society
Government
Market Systems
Business
Morality
&
Ethics
Business
Ethics
14. Business Ethics
When business people speak about “business ethics” they usually
mean one of three things:
1. Avoid breaking the criminal law in one’s work related
activity
2. Avoid action that may result in civil law suits against
the company
3. Avoid actions that are bad for the company image
Businesses are especially concerned with these three things since
they involve loss of money and company reputation.
15. • Laws and moral standards overlap to a certain extent
• Law represents a minimum set of standards for producing a desired human behaviour
• Ethics often represents a standard that exceeds the legal minimum
Ethics Law
Frequent Overlap
Relationship between law and moral standards
16. Common Unethical Acts...
• Lying and withholding needed information
• Abusive or intimidating behavior
• Misreporting time worked
• Discrimination and sexual harassment
• Stealing
• Breaking environmental and safety laws
• Falsifying records
• Drug or alcohol abuse
• Giving or accepting bribes
17. Why Misconduct Is Not Reported...
Belief that nothing will be done
Fear of retaliation
Fear of being viewed as a troublemaker
18. Why ethical behavior is important???
• Business is a subsystem of society
• Empowers all stakeholders concerned
• Reduction in cost of friction with social
environment
• Important for organizations leaders because they
influence the ethical climate for the rest.
19. Why Ethical problems occur?
• Personal gain
• Individual values widely differ with organizational goals
• Managers values and attitudes
• Competitive pressures
• Cross-Cultural contradictions
20. Sources of Ethical Norms
Fellow Workers
Family
Friends
The Law
Regions of Country
Profession
Employer
Society at Large
Religious Beliefs
The Individual
Conscience
Culture
21. Common Misconduct in
Organizations
• Misrepresenting hours worked
• Employees lying to supervisors
• Management lying to employees, customers,
vendors or the public
• Misuse of organizational assets
• Lying on reports/falsifying records
• Sexual harassment
• Stealing/theft
• Accepting or giving bribes or kickbacks
• Withholding needed information from
employees, customers, vendors or public
22. Common Causes of Unethical Behavior
• Pressure
• Fear
• Greed
• Convenience
23. Causes of Unethical Behavior (cont’d)
• Following boss’s directives
• Meeting overly aggressive business/financial
objectives
• Helping the organization survive
• Meeting schedule pressures
• Be a team player (group think)
• Rationalizing that others do it
• Resisting competitive threats
• Advancing own career
24. Business Ethics Myths
• Business ethics is a new fad.
• Business ethics – religion vs. man
agement.
• Business ethics is obvious – “do
good!”
• Business ethics is good guys
preaching to bad guys.
25. Business Ethics Myths (cont’d)
• Ethics can’t be managed.
• Being legal = being ethical.
• Managing ethics has little
practical relevance.
26. Ethical Tips for Organizations
• Develop a code of ethics.
• Communicate code and bake it into culture top
-down.
• Treat ethics as a process.
• Create open lines of communication.
• Set good examples.
• Educate employees – frame issues through
story telling.
• Value forgiveness.
27. Benefits of Managing Ethics in the
Workplace
• Improves society.
• Maintains a moral course in turbulent times.
• Cultivates employee teamwork, productivity,
morale and development.
• Acts as an insurance policy.
28. Benefits of Managing Ethics in the Workplace (cont’d)
• Establishes values for quality management,
strategic planning and diversity management.
• Promotes strong public image.
• It is the RIGHT thing to do!
29. Ethical Tips for Individuals
• Establish personal values.
• Be aware of ethical events.
• Develop critical thinking techniques.
• Be reflective.
• Make it a priority every day.
30. Encouraging Ethical Conduct
• Ethics Training
– Key features of effective ethics training programs
• Top management support.
• Open discussion.
• A clear focus on ethical issues.
• Integration of ethics into the organization.
• A mechanism for anonymously reporting ethical violations.
• Reward ethical conduct.
31. Encouraging Ethical Conduct (cont’d
• Whistle-Blowing
– The reporting of perceived unethical matters.
– Reducing the fear of retaliation against whistleblowers
• Anonymous hotlines and web sites
• Personal, confidential guidance
• Ethical Advocate
– An ethics specialist who plays a role of critical
questioner in top-management’s decision-making.
– Serves as the Board of directors’ social conscience.
– Helps prevent groupthink and blind conformity
32. Encouraging Ethical Conduct (cont’d)
• Code of Ethics
– Published statement of moral expectations for
employee conduct
– Requirements for an effective ethics code
• Must describe specific practices as unethical
(e.g., kickbacks, payoffs, gifts, falsification of records,
and misleading product claims).
• Must be firmly supported and fairly enforced by
top management.