l-1. intro. to be
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BECG (CA)
L-3: Introduction to Business Ethics
Ethics:
Ethics deals with what is right or wrong. It is the science of moral
principles and recognized rules of conduct. Moral judgments require
moral standards by which one judges human conduct. Ethics can also
be defined as the science of character of a person expressed as right or
wrong conduct of action.
Philosophers view ethics as a system of moral principles and the
methods for applying the same. According to them, Ethics deals with
values relating to human conduct with respect to the right or wrong of
certain actions and to the goodness and badness of the motives and endsof such actions. Others consider what is an ethical guideline to-day is
often translated to a law or regulation on a later day.
Nature of Ethics:
- Ethics deals with human beings, who can judge which is
right or wrong or good or bad.
- Ethics is more a science than an art, because it is a
systematic knowledge about moral behavior and conduct of
human beings.
- Ethics is a normative (a guide or control of action) science,
which tells us what we ought to do.
- Ethics deals with human conduct that is voluntary and not
forced by any person or circumstance.
- The concept of ethics is very vague, abstract andunstructured. There is no universally accepted definition of
ethics because ethics is dependent on moral standards,
which in turn depend on a value system, which again
depend on individuals background, which further dependon his or her experience. Hence the ethical practices are
different.
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Need for Business Ethics:
In order to survive in the long run, business should concentrate on the
welfare of employees.
Objectives of Ethics:
- To assess whether a particular act/decision is moral or not.
- To establish moral standards and norms of behavior.
- To judge human behavior based on these standards or
norms.
- To assess human behavior and express an opinion or
attitude on it.
-To set standards or codes for moral behavior and makerecommendations about the desired behavior.
Business:
Business is a primary economic institution through which people in
modern societies carry on the task of producing and distributing goods
and services.
Business Ethics:
Business Ethics refers to application of ethical judgments to business
activities. It concerns itself with what is right or wrong in the work
place. It is the normative study of moral standards as they apply to
business policies, institutions and human behavior. It is also considered
as the ethical analysis of business practices.
Conflicts in Decision making from Business, Legal and Moral
Points of View:
- Businesses have choices or alternatives, such as
maximization of profits and sales volumes; and providing
employment or benefits to employees. However, at times,
profits and social responsibility can not co-exist, because,
while earning profits, entrepreneurs may neglect social
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responsibility (e.g. postponement of Effluent Treatment
Plant, which is required as social consideration towards
community, to maximize profits).
- Sometimes, business finds it difficult to explain its action on
ethical grounds as in the case of computerization of banks
operations which leads to redundancy of clerical jobs.
- Avoidance of tax is an illegal activity and also unethical
from social responsibility point of view.
- Sometimes social obligations are complex and costly to
discharge. But if an organization wants to survive and grow
in the long run, it must strike a balance between its social
obligations and economic objectives. But if the organizationwants to be ethical, it has to discharge its social obligations
towards the society.
Nature of Business Ethics:
Most businesses encounter two types of ethical problems, Overt and
Covert ethical problems.
- Overt ethical problems deal with bribery, theft, collusion,
etc., which are clear/transparent and reprehensible.- Covert ethical situations occur in corporate acquisitions,
marketing, personnel policies, capital investments, etc.
which are complex, clear and have deft ethical solutions.
Ideal Ethical Decision:
It comprises of the following moral virtues:
- Right (Morally correct)
- Equitable (Just and equal)
- Good (Highest good for all concerned)
- Proper (Appropriate and acceptable)
- Fair (Honesty)
- Just (Action)
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