BUSINESS ETHICS

The Nature of Ethics

Ethics The inner-guiding moral principles, values, and beliefs that people use to analyze or interpret a situation and then decide what is the right or appropriate way to behave.

Ethical Issues For Business

Product safety standards Advertising contents Working environment Unauthorized payments Employees privacy Environmental issues

The Nature of Ethics

Ethical Dilemma People find themselves in when they have to decide if they should act in a way that might help another person even though doing so might go against their own self-interest.

ETHICS, ECONOMICS, AND LAW

6-14

BUSINESS ETHICS: WHAT DOES IT REALLY MEAN? Business Ethics:Today vs. Earlier Period
Societys Expectations of Business Ethics
Ethical Problem Actual Business Ethics

Ethical Problem

1950s

Time

Early 2000s

Ethics and Morality

Ethics is about field or domain of enquiry while morality is the object of enquiry. Ethics or behavior accepted with in a group is recorded as credos espoused value of group/organization. When espoused value become practiced values, then the group is said to be ethical organization.

Ethical theories can be classified into three subject areas: Meta ethics Normative ethics Applied ethics

Ethics of Care
Ethics of care is a normative ethical theory The basic beliefs of this theory are: 1.All individuals are interdependent for achieving their interests. 2. Those particularly vulnerable to our choices and their outcomes deserve extra consideration to be measured. 3. It is necessary to attend to the contextual details of the situation.

Virtue Ethics
It maintains that sound, balanced character, motivation and intentions is more important than actual conduct and its consequences. Three major types of virtue ethics theories are:1.Individual Character Ethics 2.Work Character Ethics 3.Professional Character Ethics

Utilitarianism

In an organizational context, utilitarianism basically states that a decision concerning business conduct is proper if and only if that decision produces the greatest good for the greatest number of individuals. It is the most widely understood and commonly applied ethical theory. Good is usually defined as the net benefits that accrue to those parties affected by the choice. Thus, most utilitarians hold the position that moral choices must be evaluated by calculating the net benefits of each available alternative action.

One major school of thought, Act Utilitarianism, focuses on the action that has been taken, analyzing it along the lines of whether the selected action produces more good than bad consequences. A second formulation, Rule Utilitarianism, looks at whether the option or choice conforms to a rule that attempts to maximize the overall utility.

Universalism in Ethics

One distinctive understanding of universalism in ethics is that ethical principles are principles for everybody. They prescribe obligations for everybody, define rights for everybody, list virtues for everybody. The most minimal version of ethical universalism is a claim about the form of ethical principles or standards. It is the claim that ethical principles hold for all and not merely for some, that is, for everybody without exception.

Concept of Ethical Universalism

According to the school of ethical universalism . . .

Same standards of what is ethical and what is unethical resonate with peoples of most societies regardless of:

Local traditions and Cultural norms

Thus, common ethical standards can be used to judge conduct of personnel at companies operating in a variety of

Country markets and Cultural circumstances

Examples of Universal Ethical Principles or Norms

Honesty Trustworthiness Treating people with dignity and respect Respecting rights of others Practicing the Golden Rule Avoiding unnecessary harm to

Workers Users of a companys product or service

Respecting the environment

Theory of Justice

The First Principle of Justice:

Each person is to have an equal right to the most extensive basic liberty compatible with a similar liberty for others.

The Second Principle of Justice:

Social and economic inequalities are to be arranged.

THEORY OF RIGHTS

Rights - Rights are claims that you deserve something from someone or some group. Rights can be legal, contractual, or moral. Rights are also categorized as positive and negative. This categorization indicates the kind of claim and obligation that the right entails. Rights, duties, obligations, and responsibilities can also be categorized as universal, prima facie or conditional -

Lets Be Clear With The Terms

LAW: Rules created by a governing body of a society to maintain harmony, stability and justice in that society. ETHICS: Developing a way of determining what values ought to be- How we ought to act- embraces characteristics of honesty, fairness, compassion, integrity.

Relationship Between Law and Ethics

Society has instituted THE LAW that tells us certain conduct is unacceptable and will administer punishment.

The law can not administer punishment for unethical behavior.

The Nature of Ethics In Management of Business Standards Issues in defying the nature of business ethics Individual character -Religion Personal moral development -Philosophy Legal and regulatory concerns -Sarbanes-Oxley act, etc Issue focused vs FRAMEWORK focused Integrated manegerial program tied organizational goals and objectives

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Ethical Issues Faced By Business

Significance of cultural, economic, regulatory and ecological issues while establishing business in a foreign country. Consequences of misleading advertising and false advertising. Issues involving privacy of employee (workplace surveillance)and employer(whistle blowing). Patents infringements.