ECR Class 1, 2 PGP

Business Ethics
About the course

• Business ethics concept
• Ethical Dilemma- Practical issue
• Governance Approach
• CSR
• Group Presentation
Evaluation
There will be 4 graded components, as follows:
1.Class participation (15%): You are encouraged to attend and participate regularly in class
discussions, for your benefit and the benefit of everyone else. Class participation will be
evaluated based on quantity and quality of participation from students.
2.Quiz (15%):
3.Group project (30%): The topic for group project will be from the course objectives and it will
be presented to the class. A written report in support of the presentation will also need to be
submitted. Group project will be due on the date and time specified. Late submissions will be
penalized.
• End term examination - 40%

Group Project
• Identify a real-life incident related to business ethics. The ‘agent’ below may imply a business organization,
or a leader/an employee in such organization, or an entrepreneur. The ethical issue may be related to any
business function or activity.
• A basic set of guidelines is given for each topic to help you structure the report.
• You should also use at least one suitable framework given in the readings or discussed in the class.
• The word limit for the project report is 2000 words. Plagiarism is strictly prohibited. You should create a 10-
minute presentation for the project.
Group Project
Ethical dilemma faced by an agent.
• - description of the incident, including the relevant information and identifiable sources
• - why is there an ethical dilemma?
• - how would you advise the agent to resolve the dilemma?
Ethical choice (good or bad) made by an agent.
• - description of the incident, including the relevant information and identifiable sources
• - analyze the ethical choices available to the agent
• - determine whether the choice made was good or bad
Morality
• The standard that an individual or group has about
what is right/ wrong, good/ bad
• All societies have some standards.
• Moral standards are developed through socialization.

Levels of moral development
Ethics
• Derived from the Greek word “ethos”, which means “way of living.”
• Ethics is a branch of philosophy concerned with human conduct, more specifically,

the behaviour of individuals in society.
• Study of morality
• Origins from moral philosophy and religion to maintain social order- eg- 10
commandments
Ethics
• Ethics is the science of good/bad, just/unjust, moral/immoral
behaviour. As the good and right are equated with moral, ethics is
considered to be the science of studying morality.
- Rossouw & Van Vuuren, 2006; Weiss, 2009; Desjardins, 2009
• Ethics as a science which deals with human values, rights, duties and
moral principles in their behaviour .
-Stoner, Freeman and Gilbert (1997)
Philosophical Foundation of Ethics
• In the fifth century B.C- philosophers began to search for reasons for
established modes of conduct-
Types of Ethics
Meta-ethics Concerning the theoretical meaning and reference of moral propositions

and how their truth values (if any) can be determined
“What kind of people should humans strive to become ?”
Normative ethics Examines standards for the rightness and wrongness of actions,
Ideal litmus test of proper behaviour
Applied ethics Concerning what a person is obligated (or permitted) to do in a specific

situation or a particular domain of action
Business Ethics
• Business ethics in short can be described as a systematic study of
moral (ethical) matters pertaining to business, industry or related
activities, institutions or practices and beliefs.
-John Donaldson
• Business Ethics is the study of business situations, activities and

decisions where issues of rights and wrongs are addressed.
-Andrew Crane and Dirk Matten, 2016
Why Business Ethics
• Employee Welfare and improved morale
• Selling point for customers
• Stand out in the market
• Contribute positively to the society
• Trust of Shareholders and Stakeholders
• Sets goals for other staff members
“Post” Enron Era
Levels of business Ethics
Moral Theory and
Framework
Three traditions –
Utilitarianism
Deontology
Virtue Ethics
Utilitarianism
Jeremy Bentham
• An ethical theory that determines right from wrong by focusing on
outcomes.
• locate morality in the consequences of the action
• Identifying the relevant purpose and consequence are important for
managers
Questions
• Which consequences are most important?
• Are there any clear priorities among stakeholder claims?
• Will certain stakeholders be especially harmed?
• Will they feel negatively toward the firm or seek to hurt the firm?
Stakeholder
Individuals or groups who can affect (or who are affected by) the
activity of the corporation
Deontology/ Standard of conduct
• Categorical Ethics- Immanuel Kant
• Focuses on the actions of people
• Ethically acceptable- Determined by relevant principles/ norms/rules
and standards of conduct.
• Standards/ norms of the society- for the overall benefit of the human
being
• Standard of Conduct- important for the company- eg- Tata, Infosys
Virtue Ethics
• Aristotle
• Personal traits and qualities
• How one should live, what kind of person one should become
• Habits, practices, and ways of doing business that will help them
achieve their goals over time e.g., taking care of their customers or employees, being a
trustworthy and reliable partner with suppliers.
Moral theories
• Each of these strands of theory provides moral insights;
• Each has its advantages and limitations.
• How philosophical theories of ethics can provide insights to
management decision making
• How can we put this into a comprehensive Ethical framework??
Building Ethical Framework
• An ethical framework is a set of questions that managers can use to
get beyond their initial moral intuitions and clarify the relevant
features of the case.
• Frameworks help managers to understand and analyze the moral
dimensions of a given situation.
• A good framework takes the best from your moral intuition and adds
the pieces that may be missing
• An ethical framework works best when it is complementary to, not
separate from, other modes of business analysis and decision-making
(i.e., from finance, accounting, or marketing).
Framework- Lynn Sharp Paine
4 fundamental questions that an actor should consider when
evaluating a possible course of action.
• Is the action consistent with the actor’s basic duties?

• Does it reflect best practice?
• Does it respect the rights and other legitimate claims of the affected parties?
• Is it compatible with the actor’s own deeply held commitments?
Levels of ethics
• Rights & Duties
• Basic minimum
• Best practice
• Desirable beyond the minimum
• Commitments
• Values defining identity
Evaluating Business Ethics
• Understanding the facts
• Accounting for collateral effects, alternative interpretations, and likely impact on
others (such as impact on various stakeholders)
• Identifying relevant standards
• Corporate governance principles
• Industry standards
• Company’s own code
• https://www.tata.com/about-us/tata-code-of-conduct
• https://www.infosys.com/investors/corporate-
governance/documents/codeofconduct.pdf
• https://www.cii.in/pdf/CII%20Guidelines%20on%20Integrity%20Transpare
ncy%20in%20Governance%20and%20Responsible%20Code%20of%20Cond
uct_Feb%202020_Final.pdf
Corporate governance principles
• Act in the best interest of the company and its investors
• Respect property rights
• Keep promises, agreements, contracts
• Conduct business in a truthful and open manner
• Respect the dignity of all people
• Deal fairly with all parties
• Act as responsible member of the community
• Be responsive to the legitimate claims and concerns of others
Avoiding Rationalization
• The process of convincing oneself that a decision is fair and

defensible, when in fact it merely serves one’s own interests or offers
an easy way out.
• There are no foolproof techniques for revealing rationalizations;
• Publicity test-Could you defend your choice if it were made public?

• Reversibility- Could you defend your reasoning if you were on the losing end of your decision?
• Legacy Test- Is this how I would like my leadership to be remembered?

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Business Ethics

About the course

There will be 4 graded components, as follows:

• End term examination - 40%

Ethical choice (good or bad) made by an agent.

• All societies have some standards.

• Moral standards are developed through socialization.

• Ethics is a branch of philosophy concerned with human conduct, more specifically,

Meta-ethics Concerning the theoretical meaning and reference of moral propositions

Applied ethics Concerning what a person is obligated (or permitted) to do in a specific

• Business Ethics is the study of business situations, activities and

• Personal traits and qualities

• Is the action consistent with the actor’s basic duties?

• The process of convincing oneself that a decision is fair and

• Publicity test-Could you defend your choice if it were made public?

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