ETHICAL ISSUES in business SYSTEMIC - Ethical questions raised about the economic, political, legal and other social systems within which business operates e.g. Question of displacement, Environment CORPORATE - Ethical questions raised about a particular individual or group within an organisation and their actions, decisions, behaviour, character etc.
ETHICAL ISSUES in business SYSTEMIC - Ethical questions raised about the economic, political, legal and other social systems within which business operates e.g. Question of displacement, Environment CORPORATE - Ethical questions raised about a particular individual or group within an organisation and their actions, decisions, behaviour, character etc.
ETHICAL ISSUES in business SYSTEMIC - Ethical questions raised about the economic, political, legal and other social systems within which business operates e.g. Question of displacement, Environment CORPORATE - Ethical questions raised about a particular individual or group within an organisation and their actions, decisions, behaviour, character etc.
Business Ethics concentrates on Moral Standards as they apply to Business Institutions, Organisations and Behaviour CASE STUDY
Business Organisations are the primary economic institutions through which people of modern societies carry on the task of producing and distributing goods and services
Resources Business Goods & Services
Land Production Consumer Products Labour > Distribution > Investors Return Capital Employees Salaries Technology Government Taxes BUSINESS ORGANISATIONS CORPORATIONS Modern Business Organisations exist in the form of Corporations. The law treats them as immortal fictitious persons who have the right to sue and be sued, own and sell property and enter into contracts all in their own name. Modern Corporations Consist of (a) Stockholders & Shareholders Contribute capital, own (b) Directors, Officers, Managers Administer, run (C) Employees Provide labour, work Co-ordination and control by - Organisation structure - Rules and Regulations - Authority and Responsibility Interlinked with (a) Suppliers (b) Consumers And ECONOMIC, POLITICAL, LEGAL AND OTHER SOCIAL SYSTEMS WITHIN WHICH BUSINESS OPERATES ALL THE ABOVE ARE STAKEHOLDERS IN BUSINESS ETHICAL ISSUES IN BUSINESS SYSTEMIC Ethical questions raised about the economic, political, legal and other social systems within which business operates e.g. Question of Displacement, Environment
CORPORATE-Ethical questions raised about a particular organisations activities, policies, practices or structure e.g. Promotion, Transfer policy
INDIVIDUAL-Ethical questions raised about a particular individual or group within an organisation and their actions, decisions, behaviour, character etc. WHETHER CORPORATIONS ACT OR ARE MORALLY RESPOSIBLE IN THE SAME SENSE THE HUMAN INDIVIDUALS ARE ? YES- Because of Rules that tie the organisations so that they act as individuals and have intended objectives But- Organistions do not have feelings, they cannot act except through human beings NO- Organisations are like machines, members blindly follow the Rules But- At least some members usually know what they are doing and are free to choose whether to follow the Organisations Rules or even to change these Rules BALANCED VIEW
WHO IS RESPONSIBLE ? Corporation exists when there exists a properly qualified group of individuals who have agreed among themselves to incorporate and have legally incorporated Corporation acts when properly qualified members of the corporation carry out their assigned duties within the scope of their assigned authority This is true at all levels Because corporate acts originate in the choices and actions of human individuals it is the individuals who must be seen the primary bearers of moral duties and Moral Responsibility. Corporate organisations have moral duties and responsibilities in the secondary sense. Central point is we must always keep before our eyes as we apply the standards of ethics to business activities and we must not
the fiction of corporation obscure that human individuals underlie the corporate organisation. Corporate policies, corporate cultures, corporate norms and corporate designs can and do have influence on the choices, beliefs and behaviour of corporate employees. They provide the world and the subject matter. But ultimately the individuals in the corporation act and so are morally responsible for their action.
NATURE OF BUSINESS ETHICS 1. In Business activities ethical questions are of two types Overt- Open like bribery, theft, tax evasion etc. Covert-Complex corporate acquisition, personnel policy etc. 2. For a decision to be ethical it should possess characteristics like (a) Right (b) Equitable (c) Good (d) Proper (e) Fair (f) Just 3. Ethics is unstructured (a) Ethics depends upon moral standards (b) Moral standards depend on our value system (c) Value system depends upon our background and experience (d) Since background and experience are different for different individuals ethical practices are different. 4. Ethical decisions should express some obligation to others
CHARACTERISTICS OF BUSINESS ETHICS 1. Ethical Decisions differ with the individual perspective of different persons. 2. Ethical Decisions are not limited only to themselves but affect a wide range of other situations as well. Similarly unethical decisions have wide ramifications. 3 Ethical Decisions involve a tradeoff between cost incurred and benefits accrued- profits against social responsibilities. 4. Consequences of most Ethical Decisions are not clear. The only certainty is that somewhere, sometime, somehow, something positive will result from an Ethical Decision 5. Every person is individually responsible for the Ethical or unethical decision or action that he or she takes. 6. Ethical Decisions are voluntary human action, not forced by others or situations beyond the control.
ETHICAL PRACTICES IN MANNAGEMENT Ethical Decisions are much more difficult to make when a person is directly involved in the situation. It is easier to state what is right or wrong when a person is not directly involved in the situation i.e. to make decisions for others. Ethical Decisions are much more complex than merely deciding between right and wrong or between good and bad. There are certain amount of risk taking involved in making an ethical decision. There is also the responsibility to follow ones own Ethical Decision.
79 Fair Empl - Prac.cas. (Bna) 1446, 75 Empl. Prac. Dec. P 45,771, 12 Fla. L. Weekly Fed. C 540 Mashell C. Dees v. Johnson Controls World Services, Inc., 168 F.3d 417, 11th Cir. (1999)