business ethics unit-1

8/3/2019 Business Ethics Unit-1

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You did not help a person who met with an accident in frontof you?

Have you ever bribed someone for getting your work done?

Have you ever discriminated someone because of his caste,creed, sex or any other thing?
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Business Ethics


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Concept

There is a big difference between what you have a rightto do

and what is right to do. - Justice Potter Stewart

Man is a social animal. Though rules of nature controlhumans as they control other living beings, man himselfhas derived certain principles to govern his ownindividual and group behavior.

These rules, in the form of behavioral standards maydiffer across cultures and times, but their basicobjectives are always mutual existence and peace withinthe particular community or the social group.

Never let your sense of morals get in the way of


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Ethics is all about what is:

Right Wrong

Good Evil

Propriety Impropriety


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Introduction

The word Ethics is derived from the Greek wordEthicos which means- Character or manners.

It is the study of morals and moral choices.

TERMS

Ethics- moral principles by which people conductthemselves personally, socially, or professionally.

Business Ethics -rules based on moral principles abouthow businesses and employees ought toconduct themselves.


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Definitions.

Ethics-Relating to morals ;treating of moralquestions ;morally correct ; honorable OxfordDictionary.

Business ethics are moral principle that defineright and wrong behavior in the world of

business.

Business Ethics are the application of generalethical rules to business world.

The value of what should be done and what


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What are business ethics?

Ethics are moral guidelines which govern goodbehavior

So behaving ethically is doing what is morally right

Behaving ethically in business is widely regarded asgood business practice


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Law and Ethics

An important distinction to remember is thatbehaving ethically is not quite the same thing asbehaving lawfully:

Ethics are about what is right and what is wrong

Law is about what is lawful and what is unlawful


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Need of Business Ethics

Protection of ConsumerRights-B.E. can be used tocheck malpractices likeadulteration, unfair trade practices

Social Responsibility-Public accountability, protection ofworkers interest ,proper utilization

of resources.

Concept of Socialism Success should be shared by allconcerned as Employees,

shareholders ,consumers etc also contribute to thesuccess of the business

Interest of Industry- Ethics are necessary to safeguardthe interests of small scale business firms.

S.S.Is can establish their positions & fight for


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Benefits of Business Ethics

Ethics helps the market do its best.

Law cannot alone protect society but Ethicscan.

Attention to business ethics has substantiallyimproved society.

Ethics programs help maintain a moral coursein turbulent times.

Ethics programs cultivate strong teamwork &productivity.

Ethics programs support employee growth &

meaning.


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Ethical Objectives

Study of Human Behavior :makesevaluative assessment about that asmoral or immoral.

Establishes Moral standards /norms orbehavior.

Makes Judgment upon Humanbehavior based on these standards &norms.

Prescribes moral behavior; makesrecommendations about how to orhow not to behave.

Expresses an opinion or attitude abouthuman conduct in general

Ethical

Objectives


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Concept of Business Ethics

The Business Ethics code of an organization may contain the following aspects:

Business Ethics towards Employees :

Payment of right wages & salaries

Provision of proper facilities

Proper personnel policies relating to promotion, performance appraisal etc.

Towards Customers:

Right pricing

Proper information about products

Ethical promotion including advertising.

Towards Government :

Payment of Taxes & dues. Timely Filing Returns & other records .

Supporting government in social development activities.

Towards Competitors :

Fair competitive practices ,

Restraining from instigating employees,suppliers or dealers or competitors etc.


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Towards Stakeholders:

Provision of proper information

Timely payment of dividend etc.

Towards Financial Institutions:

Proper information about firms financial position.

Timely repayment of advances & interest etc.Towards Society:

Contribution towards welfare of society.

Fair practices health, safety and environmental standards etc.


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Ethical Practice-what cos. Shoulddo

Creating safeproducts

Creatingjobs

Fair treatmentof

employees

Environmentalprotection

Truthful aboutfinancial

status


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Typical Problems in BusinessEthics


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Ethical issues in business


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Lets take one of the above suppliers.A business cannot claim to be ethical firm if it ignores unethical practices by its

suppliers

Example:

Use of child labour and forced labour

Production in sweatshops

Violation of the basic rights of workers

Ignoring health, safety and environmental standards

An ethical business has to be concerned with the behaviour of all businesses thatoperate in the supply chain i.e.

Suppliers

Contractors

Distributors

Sales agents


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Environmental Issues


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Marketing & ConsumerProtection


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Human Resource Practice


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Finance


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Competition & Businessalliances


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Unethical practices of Companies

Unethical Practices Of Companies

D&G, GiorgioArmani and RobertoCavalli refuse to ban it.


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Other Issues

Personal Gain-Business sometimes wronglyemploys people those personal values are less thandesirable. These type of people sometimes put downtheir own welfare ahead of all others.

Individual values vs. organizational goals- Acompany if it pursues goals or uses methods that arenot acceptable to some of its employees will createethical conflicts in business, however sometimes theprotesting employees in these companies were nottrouble makers .Instead ,they wanted to correct theinternal co. procedureThis was a ethical dilemma.


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Competitive Pressures-were not Whencompanies compete for a similar product, theysometimes engage in unethical activities. Also rivalrybetween employees for advancement can motivatesome kind of unethical behavior.

Cross cultural contradictions-Ethical problemsmay occur when certain corporations cannot dobusiness at home ,would try to enter other societieswhere ethical standards differ. Also intra organizationcross cultural dimensions can cause conflicts.


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Ethical actions-Morals ,Morality, Beliefs

Morals- Relating to, dealing with, or capable of making thedistinction between right or wrong conduct -Principles, standardshabits with respect to right or wrong in conduct

It seems fair to boil the definition of moral

values down to:

Beliefs and personal opinions about:

1) what is right (honest, ethical, true) conduct and

2) what is wrong (dishonest, false, harmful) conductheld by individuals and held collectively by sociallycohesive groups of individuals.


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Morality

Moralityis a sense of behavioral conduct that differentiatesintentions, decisions, and actions between those that are good (orright) and bad (or wrong).

A moralcodeis a system of morality (for example, according to a

particular philosophy, religion, culture, etc.)

And a moralis any one practice or teaching within a moral code.

Immoralityis the active opposition to morality,

while Amoralityis variously defined as an unawareness of,indifference toward, or disbelief in any set of moral standards orprinciples.


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Beliefs

Belief refers to a state or habit of mind .In this state oneplaces trust or confidence in some person or thing .

Belief is a notion or idea which has the same value as

statement of knowledge or truth.EgReligious beliefs refer to a religious tenet or body of

tenets held by a group.

Rituals are the way of expressing Beliefs or values or

culture.


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Value & Ethics

Valuesare beliefs that affect an individuals judgmental

ideas about what is good or bad.

Ethics is the way the values are acted out.

Values provide the basic foundation for understanding apersons attitude ,perceptions and personality.

Values contain judgmental element as to what isright,good,or desirable.


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Nature & Characteristics

Values are inculcated

Well accepted principles

Time-tested Existence

Values reflect Character

Values change Gradually


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Importance of Values

Values foster Economic Progress

Values foster social Development

Values improves social relations

Values facilitate Regional cooperation

Values generate Love, Peace & Happiness

Values improves standard of living.


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Types of Values

Allport and his associates categorized values into 6 types:

Theoretical: Interested in the discovery of truth throughreasoning

Economic:Interest in usefulness & practicality.

Aesthetic:Interest in beauty, form & artistic harmony.

Social:Interest in people and love as a humanrelationship

Political:Interest in gaining power and influencing people

Religious: Interest in unity & understanding the cosmosas a whole


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Beliefs

business ethics unit-1

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