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Ethics and Business

Moral Reasoning in Business
The essence of studying Business ethics
is to provide managers and decision makers a
frame work for resolution of moral issues and
problems affecting business activities and the
organization
 Moral reasoning is a
process in which ethical issues
and problems are benchmarked
against a moral standard that a
moral judgment is made possible
A good moral standard is one that looks at the
issues as something very serious, e.g. murder,
graft and corruption, stealing.
 A good moral standard must be grounded on
good moral argument. A good argument is an
argument that always tells the truth. A solid moral
argument leaves no room for loopholes and
counterarguments
A good standard should be objective and not subjective. It

should universally accepted and should apply to all. what is

good for one person should be at all time good for everyone

A good standard, when violated, bring about feeling of guilt,

shame and remorse of conscience.

 a Good moral judgment must be
logical.
A good moral judgment must be
based on the facts and solid
evidence
Based on sound and defensible
moral principle
1. Why people go into Business?

People go into business for number of reason like, personal

satisfaction, to earn a livelihood, to serve the society through the goods
and services they offer to the customers, but the most common, if not, the
most dominant motive why people go into business is to make a profit.

2. How do businessmen viewed profit through their eyes?

Businessmen consider profit as a form of anticipated reward or a

compensation for the efforts they spend, skill they apply, and returns for the
capital they invested in organizing the business.
Milton Friedman- an economist “ only responsibility of business is
to make profit as long as it says within the rules of the game and

engages in open and free competition without deceptive or fraud”.

Peter F. Ducker- A famous management Guru, on the other hand,

disagrees with this view by saying, that enterprises is an organ of the

society and therefore, its actions and decision have a great impact on

society and people

1. The profit motive in the business is an ethical issue. Profit –making

must be examined from the perspective of morality

2. Profit motive as an ethical issue operates within two important

aspects of human conduct.

A. Freedom- right to decide on amount of profit

B. Structure of business- tacit guidelines that governs
business activities like profit making
a) Ethical discernment is required for businessmen: is my profit fair

enough for me and my customers? Did I consider important

factors and parameters?

b) Excessive profit are wrong? Greed, avarice, manipulation of

customers

c) Profit is not” be-all and end-all” of doing business

Business ethics is the study of what is right
and wrong human behavior and conduct in business

Business Ethics is a study of the

perceptions of people about morality, moral norms,
moral rules, and ethical principles as they apply and
institutions in business.
Business ethics is the study, evaluation, analysis
and questioning of ethical standards, policies, moral norms

and ethical theories that managers and decision makers use

in resolving moral issues and ethical dilemmas affecting

business
 Man by nature is a being and creature

who is supposed to be responsible and

accountable for his actions . 2-fols reasons

1. Man is a Rational Being (capable of moral

judgment)

2. Man is free being (capable of choosing)

 Holding to people morally accountable for some past action or

actions

 Care, welfare, and treatment of others as derived from specific social

role that one plays in society (duty depending on role: example as

parents, teacher)

 One’s capacity for making moral and rational decisions on his own.
“with great power comes
great responsibility”
-voltaire
“ behavior conducted conduct and decisions made by

organizational leader that illegal and /or violate moral

standards, and those that impose processes and structures

that promote unethical conduct by follower” (brown and

mitchell, 2010)
 The art of motivating, communicating, empowering and convincing

people to engage in an new vision of sustainable development and

necessary change. (UN global compact and European Foundation for

Mgt Development , 2008)

 An ethical act of inspiring others toward effecting positive change

through the accomplishment of a common goal. (Riggo and Tan, 2014)

 Leader are responsible for implementing ethics

develop, monitor and enforce ethical behaviour

 “the demonstration of normatively appropriate conduct through

personal actions and interpersonal relationships, and promotion
of such conduct to followers through two-way communication,
reinforcement, and decision-making”. (brown, Tevino and
Harrison, 2005:120)
Renewed interest in ethics

Increasing pressures to make a positive

contribution to society

Source of competitive advantage

Satisfies the followers needs

https://www.slideshare.net/devendrabh/responsible-leadership

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