Business Ethics is about:
By People in Business
According to Moral Principles or Values
Ethical decision-making involves the ability to
separate right from wrong along with the
commitment to do what is right
Some factors affecting decision-making :
(i.e. how important does the decision-maker
perceive the issue to be?
Can be influenced by company/management
Decision-Maker’s Personal Moral Philosophy (Moral
philosophy involves systematizing, defending, and
recommending concepts of right and wrong behavior)
8 Steps to Sound, Ethical Decision-Making
1. Gather as many relevant & material facts as
2. Identify the relevant ethical issues (consider alt.
3. Identify, weigh & prioritize all the affected parties (i.e.
stakeholders) (see Johnson & Johnson Credo, Taking Sides,
4. Identify your existing commitments/obligations.
5. Identify various courses of action (dare to think creatively)
6. Identify the possible/probable consequences of same
(both short & long-term)
7. Consider the practicality of same.
8. Consider the dictates and impacts upon your character &
By People in Business
The moral foundation of the decision-maker matters. If
he thinks that by giving punishments he can take his
work out but punishment and fear is only effective in
the short-run. Organizations that have a clear vision,
and support individual integrity are attractive places
Moral Principles or Values
Values: guiding ideas, representing deeply held generalized
behaviors, which are considered by the holder, to be of great
Morals: a system or set of beliefs or principles, based on values,
which constitute an individual or group’s perception of human
duty, and therefore which act as an influence or control over their
behavior. Morals are typically concerned with behaviors that
have potentially serious consequences or profound impacts. The
word “morals” is derived from the Latin mores (character, custom
Ethics: the study and assessment of morals. The word "ethics"
is derived from the Greek word, ethos (character or custom).
Ethics means working in such manner which is morally right.
Objectives of Ethics
Study of human behaviour and makes evaluative assessment
about that as moral or immoral (A diagnostic goal).
Establishes moral standards and norms of behaviour.
Makes judgment upon human behavior based on these
standards and norms.
Prescribes moral behaviour and makes recommendations about
how to or how not to behave.
Expresses an opinion or attitude about human contact in general.
Nature of Ethics
Concepts of ethics deals with human beings only. Human beings
can distinguish right or wrong, good or evil.
The Study of ethics is a set of systematic knowledge about moral
behaviour and conduct. Study of ethics is a science – a social
Science of ethics (Normative Science) : it judges the value of the
facts in terms of ideal situation.
Deals with human conduct which is voluntary, not forced or
coerced by persons or circumstances.
Code of Ethics in Business
Responsibilities of Business :
a) not to do harm knowingly,
b) to adhere all applicable laws and regulations,
c) the accurate representation of their education, training and experience,
d) active support, practice and promotion of this code of ethics.
Honesty and Fairness :
a) being honest in serving consumers, clients, employees, suppliers,
distributors and the public.
b) no knowingly participating in conflict of interest without prior notice to all
Rights and Duties of parties :
a) products and service offered are safe and fit for their intended use,
b) communications about offered product and services are not deceptive,
c) all parties intend to discharge their obligations, financial and otherwise, in
Characteristics of Business Ethics
Ethical decisions differ with individual perspective of different
persons. Each person views the ethical question in terms of his
or her own frame of reference. And this frame of reference is the
person’s own unique value system.
Ethical decisions are not limited only to themselves, but affects a
wide range of other situations as well. Similarly, unethical
decisions do not end in themselves, but have widespread
Most ethical decisions involve a tradeoff between cost incurred
and benefits received. Cost and benefits, profits and social
responsibilities are different ends of a single spectrum. All cannot
be maximized simultaneously.
Characteristics of Business Ethics
The consequences of most ethical or unethical decisions are not
clear. The only certainty is that somewhere, sometime, somehow,
something positive will result from an ethical decision and
something negative from unethical one.
Every person is individually responsible for the ethical or
unethical decision and action that he or she takes. Taking an
ethical decision cannot be an impersonal activity as it involves
the person’s individual unique value system along with his moral
Ethical decisions are voluntary human actions. A person cannot
escape his personal liability for his crimes citing force of
circumstances or pressure.
Ethics will be different at different
At the basic level, it is about discipline, i.e.. to
maintain punctuality, coming to work on time,
behaving properly with superiors, colleagues
and subordinates and not wasting time during
At the top level, it is about commitment and
Protecting the interests of the organization.
Sources of Ethics
1. Genetic Inheritance : the qualities of goodness is a product of
genetic traits strengthened over time by the evolutionary process.
2. Religion : religious morality is clearly a primary focus in shaping
our societal ethics.
3. Philosophical Systems : the quality of pleasure to be derived
from an act was the essential measure of its goodness.
4. Cultural Experience : individual values are shaped in large
measure by the norms of the society.
5. The legal system : laws represent a rough approximation of
society’s ethical standards.
Factors Influencing Ethics
Individual Organizational Environmental
o Values oTop Level Mgmt. oCompetition
o Work Philosophy
oThe Firm’s Reward Conditions
o Family Status System
o Personality oJob Dimensions Institutions
Ethical Issues in Business
Many of the ethical issues and dilemmas in
business are rooted in the fact that political
systems, law, economic development, and
culture vary significantly from nation to nation
The most common ethical issues involve in
Ethics @ Workplace
Ethics in the workplace in its simplest terms
means doing the right things that guide your
behavior at work.
On-the-Job Ethical Dilemmas
Telling the truth and
Situation in which a
adhering to deeply felt
business decision may be
ethical principles in
influenced for personal
Employee’s Businesspeople expect
disclosure of illegal, employees to be loyal
immoral, or unethical and truthful, but ethical
practices in the conflicts may arise.
Golden Rules of Ethics @ Workplace
Avoid Creating Disturbance
Trust & Respect for Others Work
Don’t Interfere In Others Work
Respect the Privacy of your Co-workers
Avoid Ethnic & Gender Biasness
Improve Your Self Presentation
No/Least Personal Work During Work Hours
Maintain the balance between
transparency/openness and confidentiality
Benefits of Ethics
The list of potential benefits:
Fostering a more satisfying and productive working environment
Building and sustaining Organisation reputation
Maintaining the trust of staff to ensure continued self-regulation
Providing ethical guidance for employees prior to making
Aligning the work efforts of employees with the Organisation’s
broader mission and vision
Increased employee loyalty, higher commitment and morale as
well as lower staff turnover
Attraction of ‘high-quality’ staff
Reputation benefits (customers and suppliers)
More open and innovative culture
Decreased cost of borrowing and insurance
Generation of good-will in the communities in which the
Code of Conduct Formal statement that defines how the organization expects
and requires employees to resolve ethical questions.
Codes of conduct cannot detail a solution for every ethical situation, so
corporations provide training in ethical reasoning.
Helping employees recognize and reason through ethical problems and turning
them into ethical actions.
Executives must demonstrate ethical behavior in their actions.
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