Business ethics

1. Chapter1
Introduction to Business Ethics
1.1. The general Concept Ethics
1.1.1 Definitions of Ethics
 Source of the word "ethics" is derived from the Greek word "ethos" and Latin
word “ethicus” = which means custom or character referring to accepted
behaviors.
 Ethics is the branch of philosophy that deals with the principles of morality and
standards of right and wrong that prescribe the human character and conduct in
terms of obligations, rights, rules, benefit to the society.
 Ethics is a branch of social science and deals with moral principles and social
values.
 Ethics helps us to classify what good and bad, right and wrong, fair and unfair,
moral and immoral and proper and improper human action.
 In short, ethics means a code of conduct. It is like the 10 commandments of holy
Bible.
 It tells a person how to behave with another person.
 The whole purpose in having ethics is to the overall benefit of individuals and
groups. These two are the cornerstones of any society.

2. Definitions of Ethics…...Cont’d
 Ethics can also be defined as a principle of conduct governing an
individual or a group. From this definition we can notice few power words
as principle, conduct, governance & individuals and groups.
 Principles are the guidelines, criteria, standards that enable us to judge
the conduct of humans. In order to categorize different conducts as
acceptable or not there must be a certain principles of conduct in place
which will enable us compare the conduct.
 Conduct is the way how humans behave. Psychological studies have
revealed that humans behave as an individual and at group levels. Conduct
refers the actions define who a person is and entail consequences. Eg. the
act of a student missing class consecutively will end up with a result of NG
on the course. NG in this context is the result of his/her conduct
 Governance refers to the process of controlling and shaping how a certain
action shall be carried about. The governor is the one with the
responsibility to control the behavior. When ethics is defined as a subject
of governance it is to mean ensuring whether a behavior or action of
humans is in line with certain expected standards or principles.
 Hence ethics by setting certain standards and expecting individuals and
groups to stick to them tries to govern how people conduct themselves in
their day to day endeavors.

3. 1.1.2. Nature and Characteristics of Ethics
The following are the four major characteristics of ethics:
1. Ethics is applied on human beings
 The subject matter is concerned about the acts and behaviors of
humans individually and as groups in a society.
2. Ethics is a science
 It is concerned with the behaviors of individuals hence making it a
social science.
3. Ethics governs voluntary human conduct
People who are forced to do things or engage in a certain act
without their knowledge cannot be judged ethically.
Knowledge and foresight are the cornerstones of ethical judgment.
4. Ethics is a normative science
 it sets standards and gives judgment about the rightness or
wrongness of a certain action.
 Ethically evaluates an action as either right or wrong.
 There is no middle way or the golden mean in the evaluation of
behavior of a person.

4. Ethics and Related Disciplines
 The study of human behavior and conduct is carried out directly or
indirectly in psychology, sociology, anthropology, law, religion and
cultural studies. Here in after we shall briefly state how ethics is different
from these related studies.
 Psychology and related disciplines study the human behavior to
understand how an individual human mind works. These are fields try to
understand the behaviors of humans. But ethics tries to establish the way
how people should behave.
 Law is a mandatory prescription of behaviors. People are bound to act and
behave as stated by the law else sanction in the form of punishment will
follow. Although ethics suggest behaviors, there is no effective
enforcement mechanism to follow how people are behaving. Unlike law
ethical standards are shaped in universal terms for application in every
jurisdiction.
 Religion the primary goal of religious dictums is the life after death.
Behaviors are established and right and wrong is identified mostly with
emphasis to eternal life. In ethics behaviors are stated to make the world a
better place.
 However, the common agenda in all is the study of human conduct as well
as the effort to shape behavior to a certain desired degree.

5. 1.1.3. Objectives of Ethics
The basic objectives of ethical study.
 Defines the greatest good for humans and establish a standard-
 The “good life’’ was the question of great philosophers to provide answer for
 The greatest good towards which all humans gear their energy with the hope of
creating a world just for all
 Establishes norms of behavior
 standards of ethics tend to end up being norms of conduct.
 It is the objective of ethical theories to shape how people behave and set this
standards as the normal of day to day life.
 Assessing human behavior as moral and immoral-
 Ethics establishes the fine line that helps us identify certain acts as proper and
moral or unacceptable and immoral.
 Prescribes of moral behaviors in do’s and don’ts-
 the normative nature of ethics is manifested as it claims to order people engage in
certain acts and call people to refrain from certain types of behaviors.
 The do’s are those behaviors with the set norms and standards so moral and
encourage; while the don’ts go contrary and one to avoid or not engage with.
 Expressing opinion on human conduct-
 ethics is a device for holding opinion on actions of people based on logic and
scientific analysis rather than a mere personal bias or preference.

6. Objectives…..cont’d
 Generally the overall aim of ethics is the development of a moral
standard which are reasonable & justifiable which are to be applied in
day to day life decisions of humans.
 Daniel Callahan in his article identified and discussed the following
five core aims of business ethics:
1. Stimulate your moral imagination
 Helps to think right and wrong action in a more consistent way
2. Recognize ethical issues
 to identify the core ethical issues in the business environment
3. Elicit your sense of moral obligation
 motivate oneself in considering the moral obligation
4. Develop your analytical skills
 to grow in the analysis process by working on both hypothetical and
real business cases with moral question
5. Tolerate and reduce disagreements and ambiguities
 by appreciating the various ethical theories in place to be open for a
thorough discourse on morality

7. 1.2. Morality and Moral Development
 The most repeated word in an ethical discussion is morality.
 It will help you better grasp the core ethically mentioned phrases i.e. moral
standards, moral philosophy, moral reasoning, moral justification, moral blame,
moral responsibility and the like.
 Morality is the science of human duty; the rules of human conduct. It is a set of
rules that shapes our behavior in various social situations.
 The function of morality is to combat the harmful consequences of human
actions.
 Morality establishes a level of standard for proper conduct.
 Hence if one uses the term morality and moral standards interchangeably he has
done no wrong.
 Morality involves what one ought to do, right and wrong, good and bad, values,
justice and virtues.
1.2.2. Moral Standards
Moral standards are applied only for those behaviors eligible for ethical discussion
i.e. those that can be labeled right and wrong. Yet the world has set different
standards to differentiate between and among peoples. If a standard is one that helps
us judge behavior or act not related with morality it is referred as non moral
standards. Non moral standards are also called etiquettes. Generally speaking
standards that help us judge manner good or not good in law, language, music, sports
have no bearing on the behaviors of people under scrutiny.

8. Moral Standards….cont’d
The difference between moral standards and non moral standards:
Moral standards deal with matters that seriously injure or
benefit human beings-
 serious implication if left un governed or unsettled will be damaging
to humans. Eg. corruption and bribery, companies who put harming
products to the market.
Moral standards are not established or changed by the decision
of particular authoritative bodies.
 rather based on the adequacy of the reason applied to support and
justify them.
 Non moral standards to the contrary are set by bodies whose primary
task is to set standards. These standards could be modified, changed
or adapted as needed by this setting authorities.
 This is in total contradistinction with moral standards whose primary
bases is ethical reasons. There is no United Nations of Ethics

9. Moral Standards….cont’d
Moral standards are preferred to any other value including self
interest.
 Moral standards are the best values to prioritize over any standard.
 At times the ethical dilemma gives room for individuals to put different
justifications to deviate from morality.
 The rule in ethics is to put morality as the exclusive standard when in
competition with any other standard.
 Moral standards are based on impartial considerations(from the
moral point of view).
 Partiality is defined as preference towards a certain person or idea or value
over another (a bias which puts favor towards one person to the
disadvantage of another).
 Moral standards are based on reason hence the moral point of view is free
from any consideration except reason.
Moral standards are associated with special emotions and special
vocabulary.
 The discussion of right and wrong behavior obviously ends up making
judgments.
 Judgments on human behavior are followed up by emotional remarks such
as love, hate, happy, sad, disgusted, hungry reaction are all part of morality

10. 1.2.3. Moral reasoning, Moral responsibility and
Moral Judgment
Moral reasoning or ethical reasoning refers to the reasoning process by
which human behaviors, institutions or policies are judged to be in
accordance with or in violation of moral standards.
 Any kind of judgment calls for a justification and reasoning for the
judgment in order to be considered proper or fair.
 If a decision lacks justification the acceptability of the decision will be
highly controversial.
 Moral reasoning is said to have two basic components. These components
are understanding of moral standards and evidence or fact regarding the
moral standards.
 An understanding of moral standard is a reference to identifying what a
certain moral standard accept, condemn, prohibit or require.
 Once this standard is understood well the next task will be to collect
relevant fact and information regarding the conduct under question. The
fact must substantiate a particular person, policy or institution is with a
feature the moral standards require, prohibit, value or condemn.
 It is the summation of this two components that give rise to a moral
reasoning proper to reach at an ethical valuation of a conduct.

11. Moral reasoning…..cont’d
 The four major characters of moral reasoning: moral truth, analogy,
theoretical virtue and thought experiment.
1. Moral truth- a reference is made to the existence of certain uncontroversial moral
truth which will make our reasoning an easy task. Eg. it will not be very difficult
to put a moral judgment on a government who practices ethnic cleansing.
 Hence when one employ moral reasoning employing such moral truth will be
helpful.
2. Analogy is the act of drawing general truth from less general cases.
 In the process of reasoning one may assimilate a scenario and present an argument
to support his stand using the principles derived from similar cases.
 I may use an example of a student who was addicted to drugs and died at early age
to claim the use of drug is not a proper conduct.
3. Theoretical virtues of a moral reasoning express themselves in self evidence,
logical consistency, observation, predictability, comprehensiveness and simplicity.
By asking simple questions about our reasoning to judge a behavior like:
Is our reason self evident?
Is the reasoning logical and consistent?
Is the reasoning observable and predictable?
Does the reasoning show case simplicity as well as comprehension?
4.Thought experiments help for proper reasoning. This are stories and scenarios
that help in the development of proper moral reasoning.

12. Moral reasoning…..cont’d
 The three criteria used to evaluate the adequacy of moral reasoning used by one
to reach at a moral decision or judgment :
1. Moral reasoning must be logical- moral principles we employ while reasoning
need to be far from emotion and bias.
2. The factual evidence must be accurate, relevant and complete- the facts we
employ in moral reasoning must be:
Accurate (reality than assumption),
evidence based than mere hunch;
Relevant (with direct connection to the issue under investigation) and,
Complete (which can enable one to evaluate a conduct).
Eg. Let's take the example of a person who comes to you and claim hospital X is the
worst in the town in medical ethics or patient care. This could be a mere defamation
if not fullfil the criteria.
 This is how you should exercise the act of evaluating evidence for moral
reasoning.
3.The moral standard must be consistent allowing room for modification when
inconsistency is spotted.
 The usage of double standards in dealing with similar situations will devalue our
reasoning and final judgment.
 Similar scenarios must be judged utilizing similar moral reasoning allowing a
reasonable person to see the consistency in our reasoning.

13. Moral responsibility/ moral blame: is shaped to hold a person who causes injury
to others as a result of his conduct. Moral responsibility exists when a person:
causes or help cause an injury (physical or emotional harm or fail to prevent an
injury ),
while he/she can intentionally carries the act (with full knowledge of
consequence of act),
acts of his free will
The inability to see ethical issues clearly or the failure to recognize the moral
implication of a thing is called Moral Myopia.
This act of moral blindness may lead someone to act the way they desire
irrespective of the ethical consequence or dimension of the act.
Although people of such a nature may exist it is believed that most engages in an
unethical act using their free choice.
The following are factors that mitigate moral responsibility/ moral blame:
Minimal involvement- a clear prove to the effect that the person under ethical
investigation has a small role compared to others. Eg. a person who served as a
watch boy for a group who carry out robbery.
Uncertainty about knowledge of wrong doing- a person may engage in an act
without the knowledge that he is involving in an unethical act. You recall that
intention and free will are major components of full ethical responsibility.
Difficulty- a person may act unethically out of his free will forced by factors
which put him in that context.
Seriousness of injury- the level of damage or injury from the act will have an
impact on the level of responsibility laid on a person.

14. Moral Development
Moral development represents an increasing knowledge of cultural values
leading to ethical relativism and the transformation that occurs in a person's norm
or structure of thought.
Moral development is the gradual development of an individuals concept of right
or wrong – conscious, religious values, social attitudes and certain behaviour
Different scholars have evaluated the moral development question to have a better
understanding of our ethical stand. In this lesson we will evaluate the work of
three renowned psychologists: Piaget, Kohlberg and Gilligan.
A) Piaget's Theory of Moral Development
Jean Piaget employed two methods to evaluate moral development.
First he observe children playing games and asked them about the rules of the
game and their understanding.
He then narrate them as short story of misbehavior and asked them to choose the
possible corrective actions they think fair and just with their reason.
The corrective measures were categorized by paying the price for the offence in the
form of punishment and reciprocity

15. Piaget's Theory……..Cont’d
According to Piaget’s theory, there are three broad stages of moral
development.
In the first, the child is still mastering motor and social skills and
unconcerned with morality.
In the second, the child exhibits unconditional respect for rules and
submission to authority.
In the last stage, the child recognizes that rules are arbitrary and can be
changed with group consensus;
the intentions of an actor (rather than just the consequences of the action)
should be considered in judging the morality of an act.

17. Piaget's Theory…..cont’d
He then identified 4 stages of moral development in different age
categories:
• Children under the age of 2 are guided by motor rules and no idea of their
actions.
• Children between 2-7 years are ego centric where in they do not
understand rules yet make them up as they go along.
• At the third stage of year 7-10/11 years mutual understanding of rules do
not develop yet cooperative and competitive behaviors was observed
among children. Piaget calls this stage incipient cooperation.
• The last stage encompass the age group of 11/12 and above where genuine
cooperation as well as abstractions are in place.
In this four stages of moral development we locate two stages of moral
judgment: moral realism/ moral heteronomy and moral autonomy.
Younger children of age 4-7 formulate moral judgments in absolute terms
considering the rules of morality as fixed and unchangeable.
While children of age 10 and above employ independent thought and understand
the relative nature of moral rules hence the naming moral autonomy.

18. Kohlberg's theory of Moral development
This theory is a stage theory. In other words, everyone goes through
the stages sequentially without skipping any stage.
However, movement through these stages are not natural, that is
people do not automatically move from one stage to the next as they
mature. In stage development, movement occurs when a person
notices inadequacies in his or her present way of coping with a given
moral dilemma.
According to stage theory, people cannot understand moral
reasoning more than one stage ahead of their own. For example, a
person in Stage 1 can understand Stage 2 reasoning but nothing
beyond that.
Kohlberg’s Six Stages:
Level 1: Pre-Conventional Moral Development
Stage 1 & Stage 2
Level 2: Conventional Moral Development
Stage 3 & Stage 4
Level 3: Post-Conventional Moral Development
Stage 5 & Stage 6

20. Level 1: Preconvention Morality 0-9 years
Stage 1 - Obedience and Punishment
 Especially common in young children, but adults are capable of expressing
this type of reasoning. At this stage, children see rules as fixed and
absolute.
 Obeys rules in order to avoid punishment
 Determines a sense of right and wrong by what is punished and what is not
punished
 Obeys superior authority and allows that authority to make the rules,
especially if that authority has the power to inflict pain
 Is responsive to rules that will affect his/her physical well-being
Stage 2 – Naively egotistical
 At this stage of moral development, children account for individual points
of view and judge actions based on how they serve individual needs.
Reciprocity is possible, but only if it serves one's own interests.
Is motivated by vengeance or “an eye for an eye” philosophy
Is self-absorbed while assuming that he/she is generous
Believes in equal sharing in that everyone gets the same, regardless of need
Believes that the end justifies the means
Will do a favor only to get a favor
Expects to be rewarded for every non-selfish deed he/she does

21. Level 2: Conventional Morality 10-15 years
Stage 3 - "good boy-good girl" orientation,
 This stage of moral development is focused on living up to social
expectations and roles. There is an emphasis on conformity, being "nice,"
and consideration of how choices influence relationships.
 Finds peer approval very important
 Feels that intensions are as important as deeds and expects others to accept
intentions or promises in place of deeds
 Begins to put himself/herself in another’s shoes and think from another
perspective
Stage 4 – Law and Social Order
 At this stage of moral development, people begin to consider society as a
whole when making judgments. The focus is on maintaining law and order
by following the rules, doing one’s duty, and respecting authority.
 Is a duty doer who believes in rigid rules that should not be changed
 Respects authority and obeys it without question
 Supports the rights of the majority without concern for those in the
minority
 Is part of about 80% of the population that does not progress past stage 4

22. Level 3: Post conventional Morality – 16+
Stage 5 - Legalistic Social Contract
 At this stage, people begin to account for the differing values, opinions, and
beliefs of other people. Rules of law are important for maintaining a society,
but members of the society should agree upon these standards.
 Is motivated by the belief in the greatest amount of good for the greatest
number of people
 Believes in consensus (everyone agrees), rather than in majority rule
 Respects the rights of the minority especially the rights of the individual
 Believes that change in the law is possible but only through the system
Stage 6 – Universal ethical Principles
 This stage of moral reasoning is based on universal ethical principles and
abstract reasoning. At this stage, people follow these internalized principles of
justice, even if they conflict with laws and rules.
 Believes that there are high moral principles than those represented by social
rules and customs
 Is willing to accept the consequences for disobedience of the social rule he/she
has rejected
 Believes that the dignity of humanity is sacred and that all humans have value

23. Criticisms of Kohlberg's Theory of Moral Development:
 Does moral reasoning necessarily lead to moral behavior? Kohlberg's
theory is concerned with moral thinking, but there is a big difference
between knowing what we ought to do versus our actual actions.
 Is justice the only aspect of moral reasoning we should consider? Critics
have pointed out that Kohlberg's theory of moral development
overemphasizes the concept as justice when making moral choices. Other
factors such as compassion, caring, and other interpersonal feelings may
play an important part in moral reasoning.
 Does Kohlberg's theory overemphasize Western philosophy?
Individualistic cultures emphasize personal rights while collectivist
cultures stress the importance of society and community. Eastern cultures
may have different moral outlooks that Kohlberg's theory does not account
for.

24. The Heinz Dilemma:
A woman was near death from a special kind of cancer. There was one
drug that the doctors thought might save her. It was a form of radium
that a druggist in the same town had recently discovered. The drug
was expensive to make, but the druggist was charging ten times what
the drug cost him to produce. He paid $200 for the radium and
charged $2,000 for a small dose of the drug. The sick woman's
husband, Heinz, went to everyone he knew to borrow the money, but
he could only get together about $1,000 which is half of what it cost.
He told the druggist that his wife was dying and asked him to sell it
cheaper or let him pay later. But the druggist said: "No, I discovered
the drug and I'm going to make money from it." So Heinz got
desperate and broke into the man's store to steal the drug for his wife.
Question:
What would you do?

25. Carol Gilligan theory of Moral development
 The Kohlberg's theory failed to incorporate women in its inability to
appreciate gender difference in moral development.
 This aspect has given birth to what is called the female aspect of
moral development by Carol Gilligan
 Carol Gilligan designed what she calls morality of care which is
the core element that affects moral decisions of women based on
care and compassion.
 distinct from the morality of justice associated with men which
bases itself on rules and abstract conceptions of justice.
 In her book entitled different voices, she critisized Kohlberg’s study
which based on men subjects.
 Gilligan’s tried to formulate an alternative narrative which takes in
to account the forgotten side of special case of women.
 For her the three major stages of moral development in women:
care for one self, care for others, care for both oneself and other
are highly characterized by a conception of morality intrinsic to the
nature of women.

26. 1.3. Business Ethics
Every profession has ethical aspect. It is common to hear terms as medical ethics,
legal ethics and the like.
The profession of business with its primary motive of supplying goods and services
for the profit is an area a repeated claim of morality is raised.
Definitions of Business Ethics:
According to Andrew Crane, Business ethics is the study of business situations,
activities, and decisions where issues of right and wrong are addressed.
As defined by T.M. Garrett, Business ethics is a study of the moral rightness or
wrongness of the acts involved in the production, distribution and exchange of
economic goods and services.
According to Thomas J. Adams, Business ethics deals with the values of what is
right and wrong, good and bad and moral and immoral in business relationship.
The term business relationship is used here in a broader sense. It includes
relationship with its employees, consumers, competitors, Governments, and finally
the society at large.
Business ethics is defined as a specialized study of moral rights and wrongs as they
apply in business institutions, and behavior. It studies how moral standards apply
to the social system and organizations through which society produce and
distribute goods and services and to the behavior of people who work with in
organizations.
An application of ethical rule for business behaviors or conducts of actors in the
business sector is what business ethics is all about.

27. Business Ethics….Cont’d
 The kinds of issues discussed in business ethics can be categorized in three
classes as individual, corporate and systematic.
 An individual level business ethics is the evaluation of a person's conduct
in business either as an owner or as an employee of a business entity. Eg. If
a secretary reads confidential emails she was not suppose to access, her act
is to be morally wrong only after evaluating her individual deed.
 Corporate level business ethics: Business is carried out by companies and
partnerships. This entities are for legal purposes treated as persons. For
example St.Mary’s university is a legal person which has rights and duties.
When ethical responsibilities considered at this level, it is a corporate level
ethical study.
 System level ethics: Corporations and individuals do not behave in a
vacuum. When an ethical evaluation is made on the economic, political,
legal, and other social system within which businesses operate the study is
said to be made at a system level ethical study.
• There is a system or structure that is built to facilitate transactions.
• This is the wider aspect of ethical study and has a potential in shaping
how individual business persons and corporations are to behave.

28. Business Ethics….Cont’d
Business ethics as an applied or normative ethical study is said to
concentrate on three major areas of business activities (3C’s): compliance
, contribution and consequence or the.
 Compliance is regarding the business entities fulfillment of its obligations
stated under official laws of the country it operate. Compliance can also
mean respecting principles of morality set to govern the conduct of
businesses.
 At individual level, compliance to the company policies to which an
employee pledges to respect up on employment.
 Contribution refers to what the business has done or offered towards a
society.
 It starts from the values the corporation hold to the quality of service and
goods it puts to the markets.
 Employment opportunities it created is a contribution
 Consequence has two basic contents. The consequence of the business to
the environment as well as the businesses social responsibility.
 The two are interrelated and ethical studies evaluate them in conjunction.

29. 1.3.2. Nature Characteristics of Business Ethics
 The most common natures of business ethics are summarized as follows.
1. Code of Conduct: is a form of codes of conduct as it lets us know what to do and
what not to do. Businesses must follow this code of conduct.
 Although the code may vary, there exists an explicit conduct code directing the
way people should behave in accomplishing their activity.
2. Based on Moral and Social Values: Business ethics is a subject that is based on
moral and social values, and offers some moral and social principles (rules) for
conducting a business.
 The rules incorporated in the code of conducts emanate from the values embedded
in a society
3. Protection to Social Groups: Business ethics protect various social groups
including consumers, employees, small businesspersons, government,
shareholders, creditors, etc.
 Social groups must be protected from the influence of certain actors who left
ungoverned
4. Offers a Basic Framework: is the basic framework for doing business properly.
 It constructs the social, cultural, legal, economic, and other limits in which a
business must operate.
 The assumption is an ethical system will result in an ethical corporation and
individual actor.

30. Nature and Characteristics….Cont’d
5. Voluntary: Business ethics is meant to be voluntary. It should be self-practiced
and must not be enforced by law.
 In fact one of the difference between law and ethics is the fact that law is
mandatorily enforced
 In business ethics we expect businesses to employ ethical conduct because they
found it right to do so not in fear of sanction or punishment.
6. Requires Education & Guidance: Businessmen should get proper education and
guidance about business ethics.
 Trade Associations and Chambers of Commerce should be active enough in this
matter.
 Educated business persons are better to employ ethics in their act as they
understand the inner workings of the ideas
7. Relative Term: Business ethics is a relative term. It changes from one business to
another and from one country to another.
8. New Concept: Business ethics is a relatively newer concept.
 Developed countries have more exposure to business ethics, while poor and
developing countries are relatively backward.
 This typically works for most things yet this in no way makes the challenges of
business and ethics lesser in developed or developing countries
 Trying to incorporate real cases of Ethiopia or customizing cases from elsewhere
to the existing reality of Ethiopia will make the study of business ethics more
relevant to our need.

31. 1.3.3. Need for Business Ethics
 It is necessary to observe business ethics for the following reasons:
1. Survival of the Business Unit: Unethical practices of businessmen will lead
to the closure of business unit.
 The closure of a business unit does not only create problems to business but
also to employees and the society in general.
 The behavior of a businessman is affected by some of the factors such as
leadership qualities, integrity, knowledge, skills, influence and exercising
power.
2. Growth of Business Unit: Whenever a businessman observes ethics strictly,
definitely the particular business unit will get developed.
3. Earning Goodwill: If business ethics are properly followed by a business,
automatically it will earn a good name among the public.
4. Improving the Confidence: Business ethics are necessary to improve the
confidence of the customers, employees and the like.
 If confidence is maintained, customers and employees will popularize the
name of the particular business unit.
5. Maintaining Inter-relationship: The inter-relationship of business is
maintained by adopting business ethics.
6. Solving Social Problems: If a business observes ethics in its decisions, the
public will not have any difficulty in getting their wants fulfilled. There is a
fair treatment of employees. This will avoid social problems like strike,
lockout etc.