Faculty: Sasmita Kant Maurya

Chapter 1: INTRODUCTION

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Time: 2 hours Lesson Objectives: •To provide a basic introduction of business ethics; •To outline the relationship between business ethics and the law; •To understand ethical theories •To understand ethics with respect to morality and ethical theory; •To consider and evaluate ethical challenges in different types of organizations

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Is the term “Business-Ethics” an Oxymoron?

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A Poll finds that only 17 percent to 20 percent of the public thought the business ethics of executives to be very high or high

To understand public sentiment towards business ethics, ask three questions Has business ethics really deteriorated?

Are the media reporting ethical problems more frequently and vigorously?

Are practices that once were socially acceptable no longer socially acceptable?

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Ethical Problem

Ethical

Problem

Society’s

Expectations

of Business

Ethics

Actual

Business

Ethics

1950s Early 2000s Time

Business Ethics:Today vs. Earlier Period

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Consider this:

Nobody can fault you for wanting to make a profit. But are there times when the bottom line isn't only about money?

Source: http://www.guardian.co.uk/global-development/poverty-matters/2011/apr/28/sweatshops-supplying-high-street-brands

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Business ethics is the study of business situations, activities, and decisions where issues of right and wrong are addressed.

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Commercial businesses Government organizations Pressure groups Not-for-profit businesses charities

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Inventory of Ethical Issues in Business

Employee-Employer Relations Employer-Employee Relations Company-Customer Relations Company-Shareholder Relations Company-Community/Public Interest

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Try completing this sentence: “An organisation’s business ethics are

……………………….………………………..” “An organisation’s business ethics is its practice

of addressing issues of right and wrong in business situations, activities and decisions.” 13-08-2013 12 Sasmita K Maurya, Faculty

The law is an expression of the ethical beliefs of our society.

Law and ethics are not the same thing.

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Ethics

Law

Grey Area

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Behavior or act

that has been

committed

Prevailing norms

of acceptability

Value judgments

and perceptions of

the observer

compared with

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1. Immoral Management—A style devoid of ethical principles and active opposition to what is ethical.

2. Moral Management—Conforms to high standards of ethical behavior.

3. Amoral Management

Intentional - does not consider ethical factors

Unintentional - casual or careless about ethical considerations in business

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Theories of ethics present standards by which a person can analyze and evaluate his or her own moral conduct.

Over the centuries, two different philosophical frameworks developed: ethical standards based on universal duties (deontology) and ethical standards based on consequences (utilitarianism).

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Deontology is the philosophical practice of defining and adhering to an absolute set of standards by which ethical behavior can be measured.

It tries to define universal duties that serve as moral guides to decision making. When a moral dilemma arises, a person can apply these universal standards to determine a course of action that is good. 13-08-2013 19 Sasmita K Maurya, Faculty

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The rights model analyzes ethical issues by focusing on an action’s impact on human rights.

The two necessities to be fully human are freedom and well-being. Thus, two basic categories of human rights exist within the model: (1) rights of liberty, and (2) rights of well-being. 13-08-2013 21 Sasmita K Maurya, Faculty

Privacy Free consent Free speech Freedom of conscience Right to life

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Employment Food Housing Education

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Identify the facts. Identify the ethical issues. Identify the alternative courses of action. Identify the stakeholders. Determine to which extent each alternative

respects the dignity and fundamental rights of stakeholders or violates their rights.

Choose the alternative that maximizes the dignity of stakeholders and minimizes the violation of their rights.

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Utilitarianism is an approach to establishing ethical standards based on the consequences of an action.

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Identify the facts. Identify the ethical issues. Identify the alternative courses of action. Identify the stakeholders. For each alternative, calculate the costs and

benefits (identify who would be harmed and who would benefit).

Choose that alternative which results in the greatest amount of good for the greatest number of stakeholders.

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A secretary who has worked for your corporation for fifteen years is involved in a car accident in which she permanently loses the use of her right hand. Thus, she can no longer effectively type, file, or perform many of the other functions that she previously had performed and that are included in her job description. Your corporation has a very tight budget and does not have sufficient funds to pay for an additional secretary without reallocating budget items. The injured secretary has been very loyal to your corporation, and you have been very satisfied with her work and dedication. She wants to stay at her job. Moreover, she does not believe that she could find other employment at this time. Should your corporation fire her, lay her off with compensation, or find a way to retain her? In resolving this dilemma, apply:

Utilitarianism The Rights Model Your own personal opinion

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Ethics

Morality

Ethics

Ethical Theory

Potential solutions to ethical problems

Ethics rationalises Morality….

… to produce ethical theory

That can be applied to any situation.

It's Not That Easy Going Green: Duncan Berry, ardent environmentalist and CEO of Apparel Source Inc., describes the ethical dilemma he faced when he learned that his industry causes massive amounts of pollution.

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Google, hit by numerous claims that its various search and mapping technologies invade users’ privacy, last week said it will introduce employee privacy training and start a public-information campaign about wireless security after it agreed to a $7 million settlement with officials in several U.S. states who were investigating Google’s “Street View” service.

The Washington Post reports that the settlement, which also involves a $7 million cash payment, closes the last of the state probes into allegations that Google illegally collected data transmitted over unsecured WiFi networks — gathering personal and identifiable information in the process.

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Google has maintained steadfastly that the collection of personal information was inadvertent and has apologized. “Street View” produces street-level pictures of destinations searched for through Google’s mapping and search programs. While “Street View” has been controversial for allegedly violating privacy by making pictures of public places vastly more accessible than ever contemplated, the recent development involved collection of WiFi signals that were, according to Google, only intended to help produce points of reference for mapping. European officials, notes the Post, have been more aggressive in their actions against “Street View,” in some cases confiscating hard drives from Google cars trolling the streets to collect images and data.

(source: http://www.globalethics.org/newsline/2013/03/18/google-privacy-2/)

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Knowledge of Business ethics is vital in the contemporary business environment.

Business ethics has been fundamentally recontextualized by the forces of globalization, necessitating a distinctly global view of ethical problems and practices in business.

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“Business ethics is of no practical importance to managers. Debates about right or wrong should be left in the classroom.” Critically evaluate this statement using examples where appropriate.

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Go to the homepage of a Fortune 500 company that has published its code of ethics on the World Wide Web. What ethical concerns does it cover? Is it a detailed document or general in its terms?

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