Business Ethics

What is Ethics? Ethics is a collection of moral principles and rules of conduct accepted by part or all the member of a society Ethics is a science that studies moral principles and reasoning of what is right and what is wrong, distinguishing the good from the bad and analyzing the motives and consequences of human actions.

What is Business Ethics? Business ethics can be defined as written and unwritten code of principles and values that govern decisions and actions of individuals within an organization Business ethics apply not only to how the business interact with the world at large but also to their one on one dealing with a single customer.

Two Scholl of Thoughts There are two schools of thoughts how company should approach a definition for business ethics: 1. Shareholder Perspective: Focus on making decisions that are in the owners best interest. 2. Stakeholder Perspective: Focus on making decision that consider the need and interest of the multiple stakeholder groups, not just those with a direct financial stake in the organization’s profits and losses.

Importance of Business Ethics Earn customer loyalty Save billion on law suits Take better decision Pillar of strategic planning and strategic thinking Base for continuity in business relationship Improve employees’ performance

Sources of Ethics and Myths about Ethics

Sources of Ethics Religion Culture Laws

Scope of Business Ethics Business ideas and objectives need to be harmless Product and services must not be harmful Business location must not cause difficulty to the neighboring people Fuel consumption, by product and wastage must not cause injury and discomfort to the surrounding people Customer should be served with true information

Scope of Business Ethics Employees should be hired without discrimination with fair wage, providing work safety and healthy working conditions, opportunities for promotion, retirement benefits Cause no harm to the community and urbanization Help the government through regular taxes dues; faithfully follow national, economic, business and industrial policies Social contributions tp various affairs of the society

Myths about Business Ethics Business ethics is more a matter of religion than management Our employees are ethical so we don’t need attention to business ethics Business ethics is a discipline best led by philosophers and academics Business ethics is superfluous

Myths about Business Ethics Business ethics is a matter of the good guys preaching to the bad guys Business ethics is the new policeperson on the block Ethics can’t be managed Business ethics and social responsibility are the same thing Our organization not in trouble with the law, so we’re ethical

Myths about Business Ethics Managing ethics in the workplace has little practical relevance