This document provides an overview of topics to be covered in Week 1 of a business ethics course, including: business ethics as ethical decision making and social responsibility; ethics and the law; and ethics as practical reason. It defines key terms like ethics, morality, norms and values. It discusses the importance of ethical decision making for organizations and individuals. It also distinguishes between descriptive and normative ethics, and explains the relationship between business ethics, law and corporate social responsibility.

1. BUSINESS
ETHICS -WEEK 1
By : Sanam Wasif

2. Introduction
◦ Week 1 Agenda:
◦ Business ethics as Ethical Decision Making
◦ Business Ethics as Personal Integrity and Social Responsibility
◦ Ethics and the Law
◦ Ethics as Practical Reason

3. Introduction
Assignment-1
•Choose one of the great ethicists of history such as Aristotle, John Stuart Mill, or Immanuel
Kant and write a one page report on their contributions to the ethical ideology.

4. Introduction
Essential Readings :
 Chapter 1 : Business Ethics: Concepts & Cases by Manuel G. Velasquez, 7th Edition,
2016, Pearson Education
Further Readings :
Honest Work by Joanne B. Ciulla, Clancy Martin & Robert C. Solomon. Oxford University
Press, 2013.
Business Ethics: Decision making for Personal Integrity & Social Responsibility by Laura
P. Hartman, Joseph Desjardins and Chris MacDonald, (Third Edition), 2014

5. Introduction
Definition of Ethics :
◦ Ethics are “the principles of conduct governing an individual or a group.”
◦ Ethics is “the study of morality.”
Morality :
◦ The standards that an individual or a group has about what is right and wrong or good and evil.
Moral standards
◦ Include the norms we have about the kinds of actions we believe are morally right and wrong,
as well as the values we place on what we believe is morally good or morally bad.

6. Introduction
Moral standards are first learned as a child from:
• Family
• Friends
• Various societal influences like holy places, school, television, magazines, music, and
associations.
Our experience, learning, and intellectual development will lead us to think about, evaluate, and
revise these standards according to whether we judge them to be reasonable or unreasonable.
◦ Ethics is the discipline that examines your moral standards or the moral standards of a
society. It asks how these standards apply to your life and whether these standards are
reasonable or unreasonable.

7. Introduction
◦ Ethics deals with most fundamental question: “How should we live?”
◦ Ethics is a normative study of morality, the social sciences engage in a descriptive study of
morality.
◦ A normative way to study morality: is an investigation that tries to reach normative
conclusions—that is, conclusions about what things are good or bad or about what actions are
right or wrong.
◦ A normative study aims to discover what ought to be. It tries to reach conclusions about moral
right and wrong and moral good and evil.
◦ Philosophers deals in normative ethics

8. Introduction
◦ A descriptive way to study morality : is one that does not try to reach any conclusions about
what things are truly good or bad or right or wrong.
◦ A descriptive study tries to describe or explain the world without reaching any conclusions about
whether the world is as it ought to be.
◦ Anthropologists and sociologists, for example, may study the moral standards that a particular
village or culture holds.
◦ It is not the aim of anthropologists or sociologists to determine whether these moral standards
are correct or incorrect.
◦ Social Scientists deals with descriptive ethics

9. Introduction
◦ The sociologist of descriptive study asks, “Do Pakistanis believe that bribery is wrong?”
whereas the ethicist of normative study ask, “Is bribery wrong?”
◦ Business Ethics is a specialized study of moral right and wrong that focuses on business
institutions, organizations, and activities.
◦ Business ethics is a study of :
1. Our moral standard in so far as these apply to business
2. How reasonable or unreasonable these moral standards we have absorbed from society are
3. The implications our moral standards have for business activities.

10. Ethical Decision-Making
◦ Ethical decision-making refers to the process of evaluating and choosing among alternatives
in a manner consistent with ethical principles.
◦ In making ethical decisions, it is necessary to perceive and eliminate unethical options and
select the best ethical alternative.
◦ The process of making ethical decisions requires:
1. Commitment: The desire to do the right thing regardless of the cost
2. Consciousness: The awareness to act consistently and apply moral convictions to daily
behavior
3. Competency: The ability to collect and evaluate information, develop alternatives, and
foresee potential consequences and risks

11. Ethical Decision-Making
◦ Employees who feel their company’s decision-making processes are unjust will exhibit :
1. Higher absenteeism
2. Higher turnover
3. Lower productivity
4. Will demand higher wages
◦ When people feel that organization’s decision making processes are just they will exhibit :

12. Ethical Decision-Making
◦ When people feel that organization’s decision making processes are just they will exhibit :
1. Loyalty
2. Commitment
3. Lower levels of turnover
4. Lower levels of absenteeism
5. Demand lower wages
◦ Unethical behavior breeds reprisals while ethical behavior breeds cooperation.

13. Ethical Decision-Making
◦ Decisions which follow from a process of thoughtful and conscientious reasoning will be more
responsible and ethical decisions.
◦ Responsible decision-making and deliberation will result in more responsible behavior.

14. Ethical Decision-Making
Social Ethics
Justice
Public Policy
Law
Civic Virtues
Organizational Structure
Political Philosophy
Organization operates in
society
It influences and is influenced by
social ethics

15. Ethical Decision-Making
◦ Individual ethics & collective ethics everyday we practice both kinds of ethics
◦ Magnitude of responsibility and severity of consequences increases with the kind of decisions
◦ Philosophical ethics asks for examination of our norms and values
“The unexamined life is not worth living” (Socrates)
◦Norms: Normal Behavior
◦ Values: Underlying beliefs that cause us to act in a certain way

16. Ethical Decision-Making
◦ Corporations have values that are foundations of their culture
◦ If unethical both individual and corporation values can lead to unethical behavior
“Values can be distinguished by the end they serve”
Ethical Values:
◦ Ends of human well-being (Happiness, respect, dignity, integrity & meaning, freedom &
autonomy)
◦ Not selfish in nature but should be promoted impartially
“Ethical values are those beliefs and principles that impartially
promote human well-being”

17. Personal Integrity and Social
Responsibility
◦ This fundamental question of ethics can be interpreted in two ways:
◦ "We" can mean each one of us individually, or it might mean all of us collectively.
◦ In the first sense, this is a question about how I should live my life, how I should act, what I
should do, what kind of person I should be.
◦ This meaning of ethics is sometimes referred to as morality, and it is the aspect of ethics that
we refer to by the phrase “personal integrity.”

18. Personal Integrity and Social
Responsibility
◦ There will be many times within a business setting where an individual will need to step back
and ask:
◦ In the second sense, “How should we live?” refers to how we live together in a community.
◦ In this sense, business ethics is concerned with how business institutions ought to be
structured, about corporate social responsibility, about making decisions that will impact many
people other than the individual decision-maker.
What should I do? How should I act?

19. Personal Integrity and Social
Responsibility
◦ This aspect of business ethics asks us to examine business institutions from a social rather
than an individual perspective.
◦ We refer to this broader social aspect of ethics as decision-making for social responsibility.

20. Personal Integrity and Social
Responsibility
◦ Corporate social responsibility: refers to a corporation’s responsibilities or obligations toward
society.
◦ How are business ethics and corporate social responsibility related?
◦ Being ethical, according to most scholars, is one of the obligations companies owe to society.
◦ In this respect, business ethics is a part of corporate social responsibility.
◦ Archie Carroll writes: “The social responsibility of business encompasses the economic, legal,
ethical, and discretionary expectations that society has of organizations

21. Ethics and Law
◦ The law provides a very important guide to ethical decision-making, but legal norms and
ethical norms are not identical nor do they always agree.
◦ Over the last decade, many corporations have established ethics programs and hired ethics
officers who are charged with managing corporate ethics programs.
◦ Much good work gets done by ethics officers, but it is fair to say that much of this focuses on
compliance issues. The Sarbanes-Oxley Act created a dramatic and vast new layer of legal
compliance issues.

22. Ethics and Law
◦ The Sarbanes-Oxley Act (sometimes referred to as the SOA, Sarbox, or SOX) is a U.S. law to
protect investors by preventing fraudulent accounting and financial practices at publicly traded
companies.
◦ After a prolonged period of corporate scandals (e.g., Enron and Worldcom) in the United States
from 2000 to 2002, the Sarbanes-Oxley Act (SOX) was enacted in July 2002 to restore
investors' confidence in the financial markets and close loopholes that allowed public
companies to defraud investors.

23. Ethics and Law
◦ A 2003 poll by Deloitte of 5,000 directors of the top 4,000 publicly traded companies reported
that 98 percent believed that an ethics and compliance program was an essential part of
corporate governance.
◦ Over 80 percent had developed formal codes of ethics beyond those required by Sarbanes-
Oxley, and over 90 percent included statements concerning the company’s obligations to
employees, shareholders, suppliers, customers, and the community at large in their corporate
code of ethics.

24. Ethics and Law
◦ Law is necessary for society & institutions
◦ Legal norm may not be equal to ethical norm
◦ Laws can be unethical
◦ Liberal societies legally require moral minimum to stop serious harm but do not promote good
◦ Difficult to devise law for each real & imagined ethical failure
◦ Law cannot anticipate each & every dilemma in the organization
◦ Application of law is not clear cut & rather ambiguous
◦ Application of law in organization is mostly limited to risk assessment

25. Ethics as Practical Reason
◦ Ethics is a part of practical reason, reasoning about what we should do, as opposed to
theoretical reason, which is reasoning about what we should believe.
◦ Theoretical reason is the pursuit of truth, which is the highest standard for what we should
believe.

26. Ethics as Practical Reason
◦ Practical Reasoning: Reasoning about what we should do
Different from theoretical reasoning
What we should believe
◦ Practical reasoning is based on theoretical reasoning