Business ethics deals with moral principles in business situations. It helps classify actions as good or bad and provides a framework for conducting business within social, cultural, economic and legal limits. A code of conduct outlines appropriate behavior while protecting social groups. Practicing strong ethics builds goodwill, retains talent and satisfies customers. Issues like discrimination, marketing, finance, production and the environment fall within the scope of business ethics.

1. Business Ethics

2. Definition
Ethics is a branch of social science. It deals with moral principles and
social values. It helps us to classifying, what is good and what is
bad? It tells us to do good things and avoid doing bad things.
Andrew Crane,
• "Business ethics is the study of business situations, activities, and
decisions where issues of right and wrong are addressed."
Wikipedia,
• "Business ethics (also corporate ethics) is a form of applied ethics or
professional ethics that examines ethical principles and moral or
ethical problems that arise in a business environment. It applies to
all aspects of business conduct and is relevant to the conduct of
individuals and entire organizations."

3. Nature
The characteristics or feature of business ethics are:
• Code of conduct: It tells what to do and what not to do for the welfare of the
society. All business men must follow this code of conduct.
• Based on moral and social values: It contains moral and social principles(rules) for
doing business. This includes self-control, consumer protection and welfare,
service to society, fair treatment to social groups, not to exploit others, etc
• Gives protection to social groups: Protection to different social group such as
consumers, employees, small businessmen, government, share holders, creditors.
• Provides basic frame work: Business ethics provide a basic frame work for doing
business. It gives the social cultural, economic, legal and other limits of business.
Business must be conducted with in these limits
• Voluntary: Business ethics must be voluntary. The businessmen must accept
business ethics on their own. Business ethics must be like self discipline. It must
not be enforced by law.
• Requires education and guidance: Businessmen must be given proper education
and guidance before introducing business ethics. The businessmen must be
motivated to use business ethics. They must be informed about the advantages of
using business ethics.

4. Advantages
Attracting and retaining talent
Investor Loyalty
Customer satisfaction

5. Scope
• Ethics in Compliance: Compliance is about
obeying and adhering to rules and authority.
The motivation for being compliant could be
to do the right thing out of the fear of being
caught rather than a desire to be abiding by
the law.
• Ethics in Finance : The ethical issues in
finance that companies and employees are
confronted with include: In accounting
misleading financial analysis Related Party
transactions

6. Ethics in Human Resources:
• Discrimination issues
• Sexual harassment.
• Representation of employees
• Democratization of the work-place
• Privacy of the employee
• Fairness of the employment contract
• Balancing of power between employer and employee.
Ethics in Marketing: Marketing ethics is the area of applied ethics which
deals with the moral principles behind the operation and regulation
of marketing. The ethical issues confronted in this area include:
Pricing, price-fixing, price discrimination, Anti-competitive practices
like manipulation of supply etc.
• Misleading advertisements
• Content of advertisements.
• Children and marketing.
• Black markets.

7. Ethics of Production
• This area of business ethics deals with the
duties of a company to ensure that products
and production processes do not cause harm.
Defective, addictive and inherently dangerous
products and pollution, environmental ethics,
and carbon emission.
• Ethical problems arising out of new
technologies for eg. Genetically modified food
• Product testing ethics.

8. Evolving ethical values
Evolving ethical values: Dated back to Code of Hammurabi some 4,000
years ago, business ethics is a social science, whose main aim is to
define and examine the responsibilities of businesses and their
agents as apart of the general moral environment of a given society.
Business ethics refers to how ethical principles guide a business's
operations. Common issues that fall under the umbrella of business
ethics include employer-employee relations, discrimination,
environmental issues, bribery and insider trading, and social
responsibility.
Practicing strong ethics keeps a business within the Parameters of the
law; as well as building good will and brand equity. Popular social
issues largely drive business ethics; as different issues come to the
forefront, organizations respond by bringing their ethical tenets in
line with the new social norms.
Business Ethics in the'60s: The1960s brought the first major wave of
changes in business ethics. Cultural values were shifting, with
individual dedication to social issues.

9. Major Events in the '70s and '80s During the 1970s and 1980s, two events shaped changes in business
ethics:
• Defense contractor scandals that became highly publicized due to tension between employers and
employees.
• In response, the government implemented stricter policies governing defense contractors, and
companies revamped contracts with employees to focus less on rigid compliance and more on
values; popular management philosophy shifted from pure authoritarianism to more collaboration
and working on equal footing.
The'90sandEnvironmentalism: The 1990s saw are birth of environmentalism, social responsibility
reaching new heights and graver legal ramifications for Ethical missteps. Tobacco companies and
junk food manufacturers faced heightened scrutiny, along with several highly publicized lawsuits,
over the public health ramifications of their products. Oil companies and chemical companies had
to contend within creasing public pressure to answer for environmental damage. Class action law
suits rapidly gained in popularity In response, businesses were forced to spend more on their legal
departments.
TheOnlineRealmin2000+ Fromtheyear2000 forward, business ethics have expanded to the online
realm. The big ethical dilemmas of the 21st century have mostly centered on cyber crimes and
privacy issues. Crimes such as identity theft, almost unheard of 20 years before, remain a huge
threat to any one doing business online a majority of the population. As a result, businesses face
social and legal pressure to take every measure possible to protect customers‘ sensitive
information. The rise in popularity of data mining and target marketing has forced businesses to
walk a fine line between respecting customers‘ privacy and using their online activities to glean
valuable marketing data.

10. Arguments against Business Ethics
• Businesses are not real they are conceptual
thought.
• The sole purpose of any business is to make
money.
• The sole purpose of a government is to retain
stability, order and retain power.
• Ethics are personal.
• Politics and business influence evolution.
• Business has a clear metric money. If you make a
profit you survive.

11. Relationship between Ethics &
Corporate excellence
• Ethics: Ethics are normative in approach and deals with
Human Code of Conduct.
• Ethics Conceptualizes the behavior which is prescribed
as Righteous.
• It sets a thin Line between Moral, Immoral and Amoral
• Business Ethics: Business is the art or Science of
applying ethical code of conduct, its principles to
examine, introspect and solve complex Moral
dilemmas.
• Business is ethical in approach if it maintain trade off
between economic objectives and its social obligation.

12. Unethical Issues
• Unnecessary Bureaucratic Delays.
• Insiders Trading – Leaking of confidential information
or data to third party. Bribery in corporate world.
• Political Donations and Gifts.
• Unfair discrimination.
• Conflict of Interest between employee and employer.
• Greed and falling moral values of people.
• Accumulation of Profits by illegal trade practices.
• Presentation of false financial reports related to
Income and profits and Loss statements.

13. Corporate excellence
• Corporate excellence is often described as the outstanding
practices in managing the organization and achieving results, all
based on a set of fundamental concepts and values. The essence is
to be better and have a competitive advantage over others in the
industry.
• Corporate excellence is to set internal framework of standards and
processes to engage and motivate employees to produce and
deliver quality products to its customers.
• Corporate excellence is defined as the company’s ability to
outsmart its competitors consistently over a long period of time.
• Excellence is a measure of consistently superior performance that
surpasses requirements and expectations without demonstrating
significant flaws or waste.

14. Corporate excellence Model: Building blocks
• Customer Focus
• Partnership and resource allocation.
• People involvement in process.
• Leadership and Initiative.
• Top Management involvement and commitment.
• Planning and Quality information.
• Quality Assurance.
• Process standardization.
• Defining Business Processes Through Business Process Re
engineering.
• Developing Core Competence.
• Sustainable Development and maintaining ecological balance.

15. Critical Functional Areas
• Developing Social Consciousness through organizing social activities
and Programs.
• Maintaining Customer Relationship through electronic Customer
relationship and resolving issues promptly.
• Shifting to e-commerce to wider range of markets.
• Measuring Social Impact through Social Audits.
• Going Green.
• Maintaining Total Quality Management Policies.
• Zero Defect and Zero Effect.
• Code of conduct in Business
• Setting Broader Goals for shouldering Social responsibility.
• Working coherently with Mission Statement of the company.
• Setting Priorities of objectives and running business through
effective policies.

16. Companies succeeded by focusing on
Ethical Practices
• Tata Group- Through its 22 Clause code of Ethical Practices
• Starbucks : 100% Sustainably Sourced Coffee Under its
CAFÉ Program- Coffee and Farmer Equity Practices.
• Patagonia – American Company making Outdoor Clothing.
• ISHA Foundation: Developing Schools for Poor and Running
Kaveri calling program for intense plantation drive
• WIPRO Ltd. : Spent nine hundred Crore Rupees in Karnataka
and Andra Pradesh for developing School for raising
education standard.
• H & M: Clothing Retailer by maintaining 98.5%
transparency.
•

17. Corporate mission statement
• A mission statement is a concise explanation of
the organization's reason for existence. It
describes the organization's purpose and its
overall intention. The mission statement supports
the vision and serves to communicate purpose
and direction to employees, customers, vendors
and other stakeholders.
• The three components of a mission statement
include the purpose, values, and goals of the
company.

18. Difference between mission, vision and values
statements
• A mission statement is a concise explanation of
the organization's reason for existence. It
describes the organization's purpose and its
overall intention. The mission statement supports
the vision and serves to communicate purpose
and direction to employees, customers, vendors
and other stakeholders.
Questions to consider when drafting mission
statements could include:
• What is our organization's purpose?
• Why does our organization exist?

19. • A vision statement looks forward and creates
a mental image of the ideal state that the
organization wishes to achieve. It is
inspirational and aspirational and should
challenge employees.
Questions to consider when drafting vision
statements might include:
• What problem are we seeking to solve?
• Where are we headed?
• If we achieved all strategic goals, what would
we look like 10 years from now?

20. • A values statement lists the core principles that guide
and direct the organization and its culture. In a values-
led organization, the values create a moral compass for
the organization and its employees. It guides decision-
making and establishes a standard against which
actions can be assessed. These core values are an
internalized framework that is shared and acted on by
leadership.
Questions to consider might include:
• What values are unique to our organization?
• What values should guide the operations of our
company?
• What conduct should our employees uphold?

21. • In combination with a values statement,
a code of ethics puts those values into
practice. It outlines the procedures in place to
ensure the organization's values are upheld.
Questions to consider when creating codes of
ethics might include:
• What are common ethical issues in our
industry?
• What should someone do if he or she sees a
violation of our values?

22. Formulating Code of Ethics for Business
organizations
• Setting Priorities, Premises
• Setting SMART – goals ( Specific, Measurable,
Achievable, Realistic and time bound)
• Getting Inputs in the form of relevant
information.
• Appointing a Compliance Officer.
• Consulting a Lawyer for drafting Ethics.
• Avoid Nepotism and Discriminatory Policies

23. 7 code of Ethics

24. Code of Ethics and culture
• Code of ethics and corporate culture
are guidelines for the employee to behave in
accordance with vision and mission of the
Company, of which includes values and corporate
culture of the Company.
• What is ethics and culture?
• Ethical culture can be defined as a set of
experiences, assumptions, and expectations of
managers and employees about how the
organization prevents them from behaving
unethically and encourages them to behave
ethically.

25. Indian ethics
• Indian ethics is one of the great traditions of
moral thought in world philosophy whose
insights have influenced thinkers in early
Greece, Europe, Asia, and the New World.

26. • Descriptive Ethics: Descriptive ethics deals with what people actually believe (or
made to believe) to be right or wrong, and accordingly holds up the human
actions acceptable or not acceptable or punishable under a custom or law.
• Normative Ethics: deals with “norms” or set of considerations how one should act.
Thus, it’s a study of “ethical action” and sets out the rightness or wrongness of the
actions. It is also called prescriptive ethics because it rests on the principles which
determine whether an action is right or wrong. The Golden rule of normative
ethics is “doing to other as we want them to do to us“.
• Meta Ethics: deals with the origin of the ethical concepts themselves. It does not
consider whether an action is good or bad, right or wrong. Rather, it questions –
what goodness or rightness or morality itself is? It is basically a highly abstract way
of thinking about ethics.
• Applied Ethics. Applied ethics deals with the philosophical examination, from a
moral standpoint, of particular issues in private and public life which are matters of
moral judgment. This branch of ethics is most important for professionals in
different walks of life including doctors, teachers, administrators, rulers and so on.
There are six key domains of applied ethics viz. Decision ethics {ethical decision
making process}, Professional ethics {for good professionalism}, Clinical
Ethics {good clinical practices}, Business Ethics {good business
practices}, Organizational ethics {ethics within and among organizations}
and social ethics.
• It deals with the rightness or wrongness of social, economical, cultural, religious
issues also. For example, euthanasia, child labour, abortion etc.