BUSINESS ETHICS

GROUP NUMBER – 6

1. Gaurav Singh (D02)

2. Amir Kidwai (D29)
3. Chandrakant Sharma (D36)
4. Gaurav Sharma (D50)
 Business Ethics

Business Ethics is about:

1 . Decision Making

2. By People in Business

3. According to Moral Principles or Values

 Decision Making
• Ethical decision making involves the ability to separate right from
wrong along with the commitment to do what is right.

Some factors affecting decision-making :

 Issue Intensity
 (i.e. how important does the decision-maker
perceive the issue to be?
 Can be influenced by company/management
emphasis)
 Decision-Maker’s Personal Moral Philosophy (Moral
philosophy involves systematizing, defending, and
recommending concepts of right and wrong behavior)
 Organizational Culture
 Decision-Making

8 Steps to Sound, Ethical Decision-Making:

 1. Gather as many relevant & material facts as circumstances

permit.
 2. Identify the relevant ethical issues (consider alt. viewpoints)
 3. Identify, weigh & prioritize all the affected parties (i.e.
stakeholders) (see Johnson & Johnson Credo, Taking Sides)
 4. Identify your existing commitments/obligations.
 5. Identify various courses of action (dare to think creatively)
 6. Identify the possible/probable consequences of same
(both short & long-term)
 7. Consider the practicality of same.
 8. Consider the dictates and impacts upon your character &
integrity.
 By People in Business

Decision-Maker (Managers)

The moral foundation of the decision-maker

matters. If he thinks that by giving
punishments he can take his work out but
punishment and fear is only effective in the
short-run. Organizations that have a clear
vision, and support individual integrity are
attractive places of employment.
 Moral Principles or Values

 Values: guiding ideas, representing deeply held generalized

behaviors, which are considered by the holder, to be of great
significance.

 Morals: a system or set of beliefs or principles, based on

values, which constitute an individual or group’s perception of
human duty, and therefore which act as an influence or control
over their behavior. Morals are typically concerned with
behaviors that have potentially serious consequences or
profound impacts. The word “morals” is derived from the Latin
mores (character, custom or habit)

 Ethics: the study and assessment of morals. The word

"ethics“ is derived from the Greek word, ethos (character or
custom). Ethics means working in such manner which is
morally right.
 Objectives of Ethics

 Study of human behaviour and makes evaluative

assessment about that as moral or immoral (A diagnostic
goal).

 Establishes moral standards and norms of behavior.

 Makes judgment upon human behavior based on these

standards and norms.

 Prescribes moral behaviour and makes recommendations

about how to or how not to behave.

 Expresses an opinion or attitude about human contact in

general.
 Nature of Ethics

 Concepts of ethics deals with human beings only. Human

beings can distinguish right or wrong, good or evil.

 The Study of ethics is a set of systematic knowledge about

moral behaviour and conduct. Study of ethics is a science – a
social science.

 Science of ethics (Normative Science) : it judges the value

of the facts in terms of ideal situation.

 Deals with human conduct which is voluntary, not forced or

coerced by persons or circumstances
 Code of Ethics in Business
•  Responsibilities of Business :

• a) not to do harm knowingly,

• b) to adhere all applicable laws and regulations,
• c) the accurate representation of their education, training and experience,
• d) active support, practice and promotion of this code of ethics.

•  Honesty and Fairness :

• a) being honest in serving consumers, clients, employees, suppliers,
• distributors and the public.
• b) no knowingly participating in conflict of interest without prior notice to all
• parties involved.

•  Rights and Duties of parties :

• a) products and service offered are safe and fit for their intended use,
• b) communications about offered product and services are not deceptive,
• c) all parties intend to discharge their obligations, financial and otherwise, in
• good faith,
Characteristics of
Business Ethics
 Ethical decisions differ with individual perspective of different
persons. Each person views the ethical question in terms of his
or her own frame of reference. And this frame of reference is the
person’s own unique value system.

 Ethical decisions are not limited only to themselves, but affects

a wide range of other situations as well. Similarly, unethical
decisions do not end in themselves, but have widespread
ramifications.

 Most ethical decisions involve a tradeoff between cost incurred

and benefits received. Cost and benefits, profits and social
responsibilities are different ends of a single spectrum. All
cannot be maximized simultaneously.
 Continued -
 The consequences of most ethical or unethical decisions are
not clear. The only certainty is that somewhere, sometime,
somehow, something positive will result from an ethical
decision and something negative from unethical one.

 Every person is individually responsible for the ethical or

unethical decision and action that he or she takes. Taking an
ethical decision cannot be an impersonal activity as it involves
the person’s individual unique value system along with his moral
standards.

 Ethical decisions are voluntary human actions. A person

cannot escape his personal liability for his crimes citing force
of circumstances or pressure.
 Ethics will be different at different
Levels

 At the basic level, it is about discipline, i.e.. to

maintain punctuality, coming to work on time,
behaving properly with superiors, colleagues
and subordinates and not wasting time during
working hours.

 At the top level, it is about commitment and

Protecting the interests of the organization
 Sources of Ethics
1. Genetic Inheritance : the qualities of goodness is a
product of genetic traits strengthened over time by the
evolutionary process.

2. Religion : religious morality is clearly a primary focus in

shaping our societal ethics.

3. Philosophical Systems : the quality of pleasure to be

derived from an act was the essential measure of its
goodness.

4. Cultural Experience : individual values are shaped in

large measure by the norms of the society.

5. The legal system : laws represent a rough

approximation of society’s ethical standards.
 Factors Influencing Ethics
• INDIVIDUAL ENVIRONMENTAL
(a) Values (a) Competition
(b) Work Background (b) Economic Conditions
(c) Family Status (c) Social / Cultural Institutions
(d) Personality

• ORGANIZATIONAL
(a) Top level management philosophy
(b) The firm’s reward system
(c) Job Dimensions
 Ethical Issues in Business

1. Many of the ethical issues and dilemmas in

business are rooted in the fact that political
systems, law, economic development, and
culture vary significantly from nation to nation.

2. The most common ethical issues involve in

businesses are:

 Employment practices
 Human rights
 Environmental regulations
 Ethics @ Workplace

 Ethics in the workplace in its simplest terms

means doing the right things that guide your
behavior at work.
On-the-Job Ethical Dilemmas

Situation in which a Telling the truth

business decision may be and
influenced for personal adhering to deeply
gain. felt ethical
principles in
business decisions

Businesspeople expect
Employee’s employees to be loyal
disclosure of illegal, and truthful, but ethical
immoral, or unethical conflicts may arise.
practices in the
organization.
Golden Rules of Ethics
at Workplace
•  Body Language
•  Avoid Creating Disturbance
•  Trust & Respect for Others Work
•  Don’t Interfere In Others Work
•  Respect the Privacy of your Co-workers
•  Avoid Ethnic & Gender Biasness
•  Improve Your Self Presentation
•  Avoid Lobbying
•  No/Least Personal Work During Work Hours
•  Maintain the balance between
• transparency/openness and confidentiality
 Benefits of Ethics
The list of potential benefits:
 Fostering a more satisfying and productive working
environment
 Building and sustaining Organisation reputation
 Maintaining the trust of staff to ensure continued self-regulation
 Providing ethical guidance for employees prior to making
difficult decisions
 Aligning the work efforts of employees with the Organisation’s
broader mission and vision
 Increased employee loyalty, higher commitment and morale as
well as lower staff turnover
 Attraction of ‘high-quality’ staff
 Reputation benefits (customers and suppliers)
 More open and innovative culture
 Decreased cost of borrowing and insurance
 Generation of good-will in the communities in which the
business operates
HOW ORGANIZATIONS SHAPE
ETHICAL CONDUCT
 Ethical Awareness
Code of Conduct Formal statement that defines how the
organization expects and requires employees to resolve ethical
questions.

 Ethical Reasoning
Codes of conduct cannot detail a solution for every ethical situation,
so corporations provide training in ethical reasoning.

 Ethical Action
Helping employees recognize and reason through ethical problems
and turning them into ethical actions.

 Ethical Leadership
Executives must demonstrate ethical behavior in their actions.