This document discusses ethics in management and business. It begins by defining ethics as moral principles that govern behavior and distinguishes right from wrong. It then discusses the need for business ethics, defining business ethics as the principles and standards that determine right and wrong conduct in business. The document provides characteristics of business ethics and discusses the relationship between ethics and culture. It also addresses ethical dilemmas in business and provides tips for dealing with them, including recognizing issues, getting facts, identifying options, and taking action. Overall, the document provides an overview of key topics relating to ethics in management and business organizations.

1. ETHICS IN MANAGEMENT
DR. JERRY JOHN

2. ETHICS AND ETHICAL BEHAVORIAL
“Character doesn’t stay at home when we go to work”
• What is ethical behavior?
• How can organizations maintain high standards of ethical conduct?

3. WHAT IS ETHICS?
 Derived from Greek word ‘Ethos’
 Refers to:
 Character &
 Sentiments of Society
CONCISE OXFORD DICTIONARY:
Ethics is:
 Relating to morals
 Treating moral questions
 Morally correct
 Honourable

4. ETHICS is the……..
 Rightness & wrongness
 Goodness and badness of human conduct
 About standards and ideals
 About norms and values of certain seriousness
 A standard of behaviour and ideals
 Principle of conduct governing an individual or a profession
 Where a significant number of people do not look at
disdainfully.
 Keeping your promises
 Respecting sentiments of beings.
 Distributing benefits and burdens in a fair and equitable way.
 A diagnostic tool: that establishes/makes:
 Moral standards
 Norms of behaviour
 Judgements on moral behaviours
 Opinions and attitudes about human conduct.

5. DEFINITION OF BUSINESS ETHICS
Business Ethics are:
Normal principles & standards that define right and wrong
behaviours in the world of business.
What is right and wrong is determined by public interest
groups/business organisations.

6. CHARACTERISTICS OF BUSINESS ETHICS
 Deferent with different people
 Ethical decisions
 Not limited to a particular situation
 Affects a wide range of associated situations.
 Ramification widespread
 Involve a trade-off between cost and benefits
 Have dilemmas – exist and persist.
 Every person is individually responsible
 Are voluntary human actions
 Choices, sometimes, are free will
 Sometimes depend upon guided/Govt principles.

7. Ethics and Culture
Excerpt From Universal Declaration of Human Rights
United Nations
• Article 1—All human beings are born free and equal in
dignity and right
• Article 18—Everyone has the right to freedom of thought,
conscience, and religion
• Article 19—Everyone has the right to freedom of opinion
and expression
• Article 23—Everyone has the right to work, to free choice of
employment, to just and favorable conditions of work
• Article 26—Everyone has the right to education

8. NEED FOR BUSINESS ETHICS
 Business operates within the society.
 Business survives on ethical means
 Responsible corporate citizenship and business
 Expectation of public
 Trust of employees.
 Image
 Costs of unethical practices
 Price of best companies
 Overall benefit.

9. Ethics Behavior
• Ethics
– A code of moral standards of conduct for what is
“good” and “right” as opposed to what is “bad” or
“wrong”.
• Ethical Behavior
– That which is “right” or “good” in the context of
governing moral code.
– Ethical behavior is value driven

10. Values
• Values
– Broad beliefs about what is appropriate behavior
• Terminal Values
– Preferences about desired end states
• Instrumental Values
– Preferences regarding the means to desired ends

11. Moral Reasoning
• Moral Reasoning
– Reasons for various ethical practices

12. Ethics and Culture
• Cultural Relativism
– Suggest that there is no one right way to behave;
cultural context determines ethical behavior

13. Ethical Dilemma
Ethical Dilemma
– A situation that, although offering potential
benefits, is unethical.
– One of the most common ethical dilemmas occurs
when a company’s culture conflicts with an
employee’s personal ethics.

14. ORGANIZATIONAL ETHICS
MANAGEMENT TIPS
Checklist for dealing with ethical dilemmas
– Step 1. Recognize the ethical dilemma.
– Step 2. Get the facts.
– Step 3. Identify your options.
– Step 4. Test each option: Is it legal? Is it right? Is it
beneficial?
– Step 5. Decide which option to follow.
– Step 6. Take action.

15. Ethics and Work
The Wall Street Journal reports:
• 36% of workers calling in sick are lying.
• 35% keep quiet about co-worker misconduct.
• 12% of job resumes contain falsehoods.
• Managers are more likely than other workers to
report wrongdoing.
• Managers with 0–3 years experience feel most
pressure to violate personal ethics.

16. Rationalizing Unethical Behavior
Four reasons
 1. “What I’m doing is not really illegal.”
 2. “My behavior is in everyone’s best
interests.”
 3. “Nobody will ever find out what I’ve
done.”
 4. “The organization will protect me.”

17. ETHICS AND ETHICAL BEHAVORIAL
Organizational Ethics
• Personal and contextual factors influence ethical
conduct
• Training in ethical decision making may improve
ethical conduct
• Protection of whistleblowers may encourage ethical
conduct
• Managers acting as positive role models may
motivate others toward ethical conduct
• Formal codes of ethics set standards for ethical
conduct

18. ORGANIZATIONAL ETHICS
Ethics Training
• Ethics Training
– Seeks to help people understand the ethical
aspects of decision making and to incorporate
high ethical standards into their daily behavior.
• Code of Ethics
– A formal statement of values and ethical
standards

19. What Are Unethical Business Practices?
Surveys have identified the following recurring
themes to prominent everyday ethical issues facing
businesses and their stakeholders:
• Managers lying to employees
• Office nepotism and favoritism
• Taking credit for other’s work
• Receiving/offering kickbacks
• Stealing from the company
• Firing an employee for whistle-blowing
• Padding expense accounts
• Divulging confidential information or trade secrets
• Terminating employment without sufficient notice
• Using company property/materials for personal use

20. What Are Unethical Business Practices?
• The most unethical behavior, per one survey, happens
in the following areas:
– Government
– Sales
– Law
– Media
– Finance
– Medicine
– Banking
– Manufacturing

21. Why Does Ethics Matter In Business?
• “Doing the right thing” matters to employers, employees, stakeholders,
and the public.
– For companies, it means saving billions of dollars
each year in lawsuits, settlements, and theft
• Tobacco industry
• Dow Corning
– Costs to businesses include:
• Deterioration of relationships
• Damage to reputation
• Declining employee productivity,creativity, and loyalty
• Ineffective information flow throughout the organization
• Absenteeism

22. Five Myths About Business Ethics
• A myth is “a belief given uncritical acceptance by the
members of a group, especially in support of existing or
traditional practices and institutions.”
– Myth 1: Ethics is a personal, individual affair, not a public
or debatable matter
– Myth 2: Business and ethics do not mix
– Myth 3: Ethics in business is relative
– Myth 4: Good business means good ethics
– Myth 5: Information and computing are amoral

23. ORGANIZATIONAL ETHICS
Whistleblowers
Whistleblowers
– Persons who expose organizational misdeeds in
order to preserve ethical standards and protect
against wasteful, harmful, or illegal acts.
– Many whistleblowers were / are fired for their
actions.
– State and federal laws now offer some protection

24. ORGANIZATIONAL ETHICS
Managers
• Management Behavior
– In order to have a positive impact on ethical
conduct throughout an organization, those at the
top must walk the talk.

25. Decision Criteria for Ethical Reasoning
• The following three criteria can be used in ethical
reasoning:
– Moral reasoning must be logical
– Factual evidence cited to support a person’s
judgment should be accurate, relevant, and
complete
– Ethical standards used should be consistent
• A simple but powerful question can be used throughout
your decision-making process in solving ethical dilemmas:
– What is my motivation for choosing a course of
action?

26. Decision Criteria for Ethical Reasoning
 A major aim of ethical reasoning is to gain a clearer and
sharper logical focus on problems to facilitate acting in
morally responsible ways.
 Two conditions that eliminate a person’s moral
responsibility for causing harm are:
 Ignorance
 Inability
 Mitigating circumstances that excuse or lessen a person’s
moral responsibility include:
 A low level of or lack of seriousness to cause harm
 Uncertainty about knowledge of wrongdoing
 The degree to which a harmful injury was caused or
averted

27. Ethical Relativism:
A Self-Interest Approach
• Ethical relativism holds that no universal standards
or rules can be used to guide or evaluate the
morality of an act.
• This view argues that people set their own moral
standards for judging their actions.
• This is also referred to as naïve relativism.
• The logic of ethical relativism extends to culture.

28. Ethical Relativism:
A Self-Interest Approach
• Benefits include:
– Ability to recognize the distinction between individual and
social values, customs, and moral standards
• Problems include:
– Imply an underlying laziness
– Contradicts everyday experience
– Relativists can become absolutists
• Relativism and stakeholder analysis.

29. Utilitarianism: A Consequentialist
(Results-Based) Approach
• The basic view holds that an action is judged as right,
good, or wrong on the basis of its consequences.
• The moral authority that drives utilitarianism is the
calculated consequences or results of an action,
regardless of other principles that determine the
means or motivations for taking the action.
• Utilitarianism includes other tenets.

30. Utilitarianism: A Consequentialist
(Results-Based) Approach
• Problems with utilitarianism include:
– No agreement exists about the definition of the “good” to be
maximized
– No agreement exists about who decides
– How are the costs and benefits of nonmonetary stakes
measured?
– Does not consider the individual
– Principles of rights and justice are ignored
• Utilitarianism and stakeholder analysis.

31. Universalism: A Deontological (Duty-Based)
Approach
• The major weaknesses of universalism and Kant’s
categorical imperative include:
– Principles are imprecise and lack practical utility
– Hard to resolve conflicts of interest
– Does not allow for prioritizing one’s duties
• Universalism and stakeholder analysis.

32. Rights: An Entitlement-Based
Approach
• Moral rights are based on legal rights and the principle of
duty.
• Rights can override utilitarian principles.
• The limitations of rights include:
– Can be used to disguise and manipulate selfish, unjust
political interests and claims
– Protection of rights can be at the expense of others
– Limits of rights come into question
• Rights and stakeholder analysis.

33. Justice: Procedures, Compensation,
Retribution
• The principle of justice deals with fairness and equality.
• Two recognized principles of fairness that represent the
principle of justice include:
– Equal rights compatible with similar liberties for
others
– Social and economic inequality arrangement
• Four types of justice include:
– Compensatory
– Retributive
– Distributive
– Procedural

34. Justice: Procedures, Compensation,
Retribution
• Problems using the principle of justice include:
– Who decides who is right and who is wrong?
– Who has moral authority to punish?
– Can opportunities and burdens be fairly
distributed?
• Justice, rights, and power are really intertwined.
• Two steps in transforming justice:
– Be aware of your rights and power
– Establish legitimate power for obtaining rights
• Justice and stakeholder analysis.

35. Immoral, Amoral, Or Moral
Management
• Immoral management means intentionally going against
ethical principles of justice and of fair and equitable
treatment of other stakeholders.
• Amoral management happens when others are treated
negligently without concern for the consequences of actions
or policies.
• Moral management places value on equitable, fair, and just
concern of others involved.

36. Four Social
Responsibility Roles
• Figure illustrates four ethical interpretations of the
social roles and modes of decision-making.
• The four social responsibility modes reflect business
roles toward stockholders and stakeholders.

37. Approaches to Social Responsibility

39. Reference
• www.Ethics.com
• WWW.Business Ethics.com
• www.Ethical BehaviourinIndia.com
• WWW.Managementethics.com
• Google Search

40. THANK YOU
Keep
Ethics
in
yourself….