This document discusses the history and development of business ethics from ancient Greece to modern times. It defines business ethics as the study of applying moral standards to business decisions and behaviors. The document outlines increasing ethical issues businesses have faced such as scandals, fraud, environmental concerns, and privacy issues. It also discusses the development of ethics programs, codes of conduct, and laws to improve ethical standards and accountability in business over the decades.

1. Business Ethics

2. Introduction
 Class
 Rules of engagement
 Communication mode
 Participation
 Questioning
 Open but within etiquettes
 Any response to above

3. Ethics - Origin
 Ethos (Greek)
 “Character” and “sentiment of the community”
 Ethikos (Greek) – authority of custom and
tradition
 Mos (Latin) – moral, mores and Morales
 Referring to:
 Customs
 Habits of life
 Traditions of people

4. Carroll & Gannon (1997)
 Specific Def. (Shea, 1988)
 “the principles of conduct governing an
individual or a profession”
 “standards of behaviour”
 Ethical Standards
 Help to guide decisions and actions
 Whether Individual, corporations, professions,
nations
 “rules or standards that govern
behaviours” (Toffler, 1986)

5. Ethics Defined
 “Customary norms and ways of behaving in a
society” (Hegel)
 “Character” and “sentiment of the community”
 “the principles of conduct governing an individual or
a profession….standards of behaviour” (Shea, 1988)
 “rules or standards that govern behaviours” (Toffler,
1986)
 “the basic ground rules by which individual acts. We
often give complex explanations of our actions, but
in fact we act for simple reasons. The ground rules
are a framework for defining which actions are
personally permissible, and which are not”
(Drummond & Bain,1994)

6. Ethics Defined (Contd.)
 “how people try to live their lives according to a
standard of “right” and “wrong” behaviour – in
both how we think and behave towards others
and how we would like them to think and behave
towards us.” (Ghillyer, 2010)
 Societal perspective
 “inquiry into the nature of grounds of morality
where the term morality is taken to mean
judgements, standards and rules of conduct.”
(O.C. Ferrell)
 Ethical Standards
 Help to guide decisions and actions
 Whether Individual, corporations, professions,
nations

7. Business Ethics
 “Business ethics is the study of how personal moral
norms apply to the activities and goals of commercial
enterprise. It is not a separate moral standard, but the
study of how the business context poses its own unique
problems for the moral person who acts as an agent of
this system” (Laura Nash)
 Falls into three basic areas of managerial decision
making
 Choices about the law
 Choices about the economic and social issues that are
beyond the law’s domain
 Choices about the pre-eminence of one’s own self-interest

8. Business Ethics (Contd.)
 “Business ethics involves the application of
standards of moral behaviour to business
situations” (Ghillyer, 2010)
 The application of ethical standards to business
behaviour
 “the principles and standards that guide
behaviour in the world of business” (O.C. Ferrell)

9. Business Ethics (Contd.)
 Who determines the actions as right or
wrong
 Investors
 Employees
 Customers
 Interest groups
 The legal system
 The community
 Approaches
 Descriptive
 Normative

10. Lacking BE
 Ethical misconduct
 NBES
 Volume of organization
 Level of management
 Accounting frauds, conflicts of interests, defective
products, harassment, abusive behaviour, employee
theft and bribery
 Harris Interactive Poll – perception of trust
 Enron, WorldCom, Anderson Worldwide, Global
Crossing, Adelphia etc.
 Involvement of individuals, Corporations, Govt
officials, Researchers, Sports
 Judgement of decisions – SOCIETY
 Reasons

11. Developments
 1960
 Ethical Climate
 Social Unrest
 Anti-war sentiment
 Loyalty to employer – loyalty to ideals
 Major Ethical Dilemmas
 Environment
 Employee-employer tension
 Civil rights
 Honesty
 Work ethics
 Drug
 BE Developments
 Code of conducts & value statements
 Social responsibility
 Legal / Personnel departments

12. Developments (Cntd.)
 1970
 Ethical Climate
 Scandals
 Recession
 Unemployment
 Heightened environment concerns
 Public pressure over business accountability
 Ethical Dilemmas
 Employee militancy
 Human rights
 Firm’s covering rather than correcting
 BE Developments
 ERC – 1977
 Compliance with law
 Foreign Corrupt Practices Act
 Values movement

13. Developments (Cntd.)
 1980s
 Ethical Climate
 Social contract
 Stringent rules – defence contractor
 Downsizing & loyalty to employer eroded
 Health care emphasized
 Ethical Dilemmas
 Bribes & illegal practices
 Influence paddling
 Deceptive advertising
 Financial frauds
 Transparency
 BE Developments
 Code of Ethics for Government Service - 1980
 Defence industry initiative
 Ethic officers – Ombudsman
 False Claims Act

14. Developments (Cntd.)
 1990s
 Ethical Climate
 Global expansion
 Child labour
 Environment
 Internet / Cultural borders
 Forbidden - common
 Ethical Dilemmas
 Unsafe work practices -3rd
world
 Increased corporate liability
 Financial mismanagement and fraud
 BE Developments
 Federal sentencing guidelines for organizations
 Lawsuits
 Global Sullivan Principles
 Board responsibility
 Voluntary disclosure – annual reports issuance on ethics

15. Developments (Cntd.)
 2000s
 Ethical Climate
 Economic growth – financial failures
 High profile firms
 Personal data
 Hackers & data thieves
 Aggression and fundamentalism
 Ethical Dilemmas
 Cyber crimes
 Privacy
 Financial mismanagement
 International corruption
 Loss of privacy
 IP
 SD

16. Developments (Cntd.)
 BE Developments
 Sarbanes Oxley Act -2002
 Anticorruption
 CSR and Integrity Management
 UN Convention -2003
 UN Global Compact – 2004
 Revised Federal Sentencing Guidelines – 2004
 Ethics programs

17. Ethical Culture and Benefits
 Organizational
 Ethics Officer
 NYSE
 UPS
 Baxter Intl
 Global
 The Caux Round Table
 NAFTA, WTO, EU,
 Benefits
 Employee commitment
 Investor loyalty
 Customer satisfaction
 Profits

18. Levels of BE
International Level
Societal Level
Association Level
Organizational level
Individual level

21. End of Session
 Book:
Business Ethics: Ethical Decision
Making and Cases By O.C. Ferrell,
John Fraedrich and Linda Ferrell
 Write down your strengths and
weaknesses on a page and
submit

22. Outline Chap1 & 2
 The importance of Business Ethics
 Understanding Business Ethics
 Why study BE
 Evolution of BE
 Benefits
 Stakeholder Relationships, Social Responsibility
and Corporate Governance
 Stakeholder relationship
 Stakeholder influence in CSR
 Corporate Governance
 Relevant Cases
 Wall-Mart – P292
 The Fall of Enron – P318
 PETCO - 422