Chapter 1

Introduction to Business Ethics

What is Ethics???

The word 'Ethics' is derived from Ethicus (Latin) Ethikos (Greek) Ethos (English) Character or manners

Ethics is thus a science of morals, moral principles, recognized rules o

Ethics is thus a science of character of a person expressed as right or

Nature of Ethics

Concept deals with human beings only. Set of systematic knowledge about moral behaviour & conduct.

Normative Science concerned with judgement of value or what ou

Deals with human conduct which is voluntary and not forced or co

Objectives of Ethics

Studies human behaviour and makes evaluative assessment abo Establishes moral standards and norms of behaviour. Makes judgement upon human behaviour based on these standa Prescribes moral behaviour and makes recommendations about h Expresses an opinion or attitude about human conduct in genera

Business Ethics

Application of ethics in business. Contradiction of terms Business and Ethics. Managerial Dilemmas.

Trade-off between pursuing its economic goals and social obligat It is unethical not to make losses.

Relation between Business & Ethics

Unitarian View (Church in Europe) Separatist View (Adam Smith & Milton Friedman) Integration View (Talcott Parsons)

Unitarian View

Business is only a subset or sub-structure of the mor

Business and morality cannot be separated and busin

Separatist View

Only goal of business should be profit maximization. Ethics and morality plays no part in business conduct.

Solution of social problems should be left to government age It is unethical to stakeholders if business does not maximize

Integration View

Integrating ethical and business into Business Ethics.

Business is an economic entity and it has the right and the n

Nature of Ethics in Business

Overt ethical problems like bribery, theft, sabotage and collus

Covert ethical problems are more complex, not so transpare Difficult to locate, to eliminate and dangerous to business

Characteristics of an ethical decision

Right Morally correct and due Equitable Just and equal Good Highest good for all concerned Proper Appropriate and acceptable Fair Honest and due Just Justice is not only done, but is also seen to have bee

Ethics does not have universal acceptance

Depends on our moral standards Depends on our value systems

Depends upon their backgrounds and childhood expe

Characteristics of Business Ethics

Ethical decisions differ with individual perspectives of differen

Ethical decisions affect a wide range of other situations as w

Involves a trade-off between costs incurred and benefits rece

Consequences of most ethical decisions are ambiguous.

Every person is individually responsible for the ethical or une

Voluntary human actions.