BUSINESS ETHICSBUSINESS ETHICSPaper:506Paper:506

Unit:2Unit:2

INTRODUCTION TO BUSINESS INTRODUCTION TO BUSINESS ETHICSETHICS

Business ethicsBusiness ethics (also known as (also known as corporate corporate ethicsethics) is a form of ) is a form of applied ethics or or professional ethics that examines ethical that examines ethical principles and moral or ethical problems that principles and moral or ethical problems that arise in a business environment. It applies to arise in a business environment. It applies to all aspects of business conduct and is all aspects of business conduct and is relevant to the conduct of individuals and relevant to the conduct of individuals and entire organizations.entire organizations.

All businesses have the same essential All businesses have the same essential issues of ethical business conduct namely issues of ethical business conduct namely product quality, transparency of financial product quality, transparency of financial statements, workplace quality and safety statements, workplace quality and safety standards, keeping pace with global standards, keeping pace with global environmental issues and compliance with environmental issues and compliance with country laws and industry standards.country laws and industry standards.

Public’s interest in business ethics Public’s interest in business ethics increased during the last four decadesincreased during the last four decades

Ethical Issues in BusinessEthical Issues in Business

Employee-Employer RelationsEmployee-Employer Relations Employer-Employee RelationsEmployer-Employee Relations Company-Customer RelationsCompany-Customer Relations Company-Shareholder RelationsCompany-Shareholder Relations Company-Community/Public InterestCompany-Community/Public Interest

Business Ethics: What Does It Business Ethics: What Does It Really Mean?Really Mean?

DefinitionsDefinitions EthicsEthics involves a discipline that examines involves a discipline that examines

good or bad practices within the context of a good or bad practices within the context of a moral dutymoral duty

Moral conductMoral conduct is behavior that is right or is behavior that is right or wrongwrong

Business ethicsBusiness ethics include practices and include practices and behaviors that are good or badbehaviors that are good or bad

Business Ethics: What Does It Business Ethics: What Does It Really Mean?Really Mean?

Two Key Branches of EthicsTwo Key Branches of Ethics Descriptive ethicsDescriptive ethics involves describing, involves describing,

characterizing and studying moralitycharacterizing and studying morality– ““What is”What is”

Normative ethicsNormative ethics involves supplying and involves supplying and justifying moral systemsjustifying moral systems– ““What should be”What should be”

ValuesValues

Values are the rules by which we make Values are the rules by which we make decisions about right and wrong, should and decisions about right and wrong, should and shouldn't, good and bad. They also tell us shouldn't, good and bad. They also tell us which are more or less important, which is which are more or less important, which is useful when we have to trade off meeting useful when we have to trade off meeting one value over another.one value over another.

MoralsMorals

Morals have a greater social element to Morals have a greater social element to values and tend to have a very broad values and tend to have a very broad acceptance. Morals are far more about good acceptance. Morals are far more about good and bad than other values. We thus judge and bad than other values. We thus judge others more strongly on morals than values. others more strongly on morals than values. A person can be described as immoral, yet A person can be described as immoral, yet there is no word for them not following there is no word for them not following values.values.

EthicsEthics

You can have professional ethics, but you seldom You can have professional ethics, but you seldom hear about professional morals. Ethics tend to be hear about professional morals. Ethics tend to be codified into a formal system or set of rules which codified into a formal system or set of rules which are explicitly adopted by a group of people. Thus are explicitly adopted by a group of people. Thus you have medical ethics. Ethics are thus internally you have medical ethics. Ethics are thus internally defined and adopted, whilst morals tend to be defined and adopted, whilst morals tend to be externally imposed on other people.externally imposed on other people.

If you accuse someone of being unethical, it is If you accuse someone of being unethical, it is equivalent of calling them unprofessional and may equivalent of calling them unprofessional and may well be taken as a significant insult and perceived well be taken as a significant insult and perceived more personally than if you called them immoral more personally than if you called them immoral (which of course they may also not like).(which of course they may also not like).

"What is wrong is wrong, even if everyone is doing it. Right is still right, even if no one else is doing it."