BUSINESS ETHICS

GROUP NUMBER – 6

1. Gaurav Singh (D02)2. Amir Kidwai (D29)3. Chandrakant Sharma (D36)4. Gaurav Sharma (D50)

Business Ethics

Business Ethics is about:

1 . Decision Making

2. By People in Business

3. According to Moral Principles or Values

Decision Making• Ethical decision making involves the ability to separate right from

wrong along with the commitment to do what is right.

Some factors affecting decision-making :

Issue Intensity

(i.e. how important does the decision-maker

perceive the issue to be?

Can be influenced by company/management

emphasis)

Decision-Maker’s Personal Moral Philosophy (Moral

philosophy involves systematizing, defending, and

recommending concepts of right and wrong behavior)

Organizational Culture

Decision-Making

8 Steps to Sound, Ethical Decision-Making:

1. Gather as many relevant & material facts as circumstances permit. 2. Identify the relevant ethical issues (consider alt. viewpoints) 3. Identify, weigh & prioritize all the affected parties (i.e.stakeholders) (see Johnson & Johnson Credo, Taking Sides) 4. Identify your existing commitments/obligations. 5. Identify various courses of action (dare to think creatively) 6. Identify the possible/probable consequences of same(both short & long-term) 7. Consider the practicality of same. 8. Consider the dictates and impacts upon your character &integrity.

By People in Business

Decision-Maker (Managers)

The moral foundation of the decision-maker matters. If he thinks that by giving punishments he can take his work out but punishment and fear is only effective in the short-run. Organizations that have a clear vision, and support individual integrity are attractive places of employment.

Moral Principles or Values

Values: guiding ideas, representing deeply held generalized behaviors, which are considered by the holder, to be of great significance.

Morals: a system or set of beliefs or principles, based on values, which constitute an individual or group’s perception of human duty, and therefore which act as an influence or control over their behavior. Morals are typically concerned with behaviors that have potentially serious consequences or profound impacts. The word “morals” is derived from the Latin mores (character, custom or habit)

Ethics: the study and assessment of morals. The word "ethics“ is derived from the Greek word, ethos (character or custom). Ethics means working in such manner which is morally right.

Objectives of Ethics

Study of human behaviour and makes evaluative assessment about that as moral or immoral (A diagnostic goal).

Establishes moral standards and norms of behavior.

Makes judgment upon human behavior based on these standards and norms.

Prescribes moral behaviour and makes recommendations about how to or how not to behave.

Expresses an opinion or attitude about human contact in general.

Nature of Ethics

Concepts of ethics deals with human beings only. Human beings can distinguish right or wrong, good or evil.

The Study of ethics is a set of systematic knowledge about moral behaviour and conduct. Study of ethics is a science – a social science.

Science of ethics (Normative Science) : it judges the value of the facts in terms of ideal situation.

Deals with human conduct which is voluntary, not forced orcoerced by persons or circumstances

Code of Ethics in Business• Responsibilities of Business :

• a) not to do harm knowingly,• b) to adhere all applicable laws and regulations,• c) the accurate representation of their education, training and experience,• d) active support, practice and promotion of this code of ethics.

• Honesty and Fairness :• a) being honest in serving consumers, clients, employees, suppliers,• distributors and the public.• b) no knowingly participating in conflict of interest without prior notice to all• parties involved.

• Rights and Duties of parties :• a) products and service offered are safe and fit for their intended use,• b) communications about offered product and services are not deceptive,• c) all parties intend to discharge their obligations, financial and otherwise, in• good faith,

Characteristics of Business Ethics Ethical decisions differ with individual perspective of differentpersons. Each person views the ethical question in terms of hisor her own frame of reference. And this frame of reference is theperson’s own unique value system.

Ethical decisions are not limited only to themselves, but affects a wide range of other situations as well. Similarly, unethical

decisions do not end in themselves, but have widespreadramifications.

Most ethical decisions involve a tradeoff between cost incurredand benefits received. Cost and benefits, profits and socialresponsibilities are different ends of a single spectrum. All

cannot be maximized simultaneously.

Continued - The consequences of most ethical or unethical decisions are

not clear. The only certainty is that somewhere, sometime, somehow, something positive will result from an ethical decision and something negative from unethical one.

Every person is individually responsible for the ethical orunethical decision and action that he or she takes. Taking anethical decision cannot be an impersonal activity as it involvesthe person’s individual unique value system along with his moralstandards.

Ethical decisions are voluntary human actions. A person cannot escape his personal liability for his crimes citing force of circumstances or pressure.

Ethics will be different at differentLevels

At the basic level, it is about discipline, i.e.. tomaintain punctuality, coming to work on time,behaving properly with superiors, colleaguesand subordinates and not wasting time duringworking hours.

At the top level, it is about commitment andProtecting the interests of the organization

Sources of Ethics1. Genetic Inheritance : the qualities of goodness is a

product of genetic traits strengthened over time by the evolutionary process.

2. Religion : religious morality is clearly a primary focus in shaping our societal ethics.

3. Philosophical Systems : the quality of pleasure to be derived from an act was the essential measure of its goodness.

4. Cultural Experience : individual values are shaped in large measure by the norms of the society.

5. The legal system : laws represent a rough approximation of society’s ethical standards.

Factors Influencing Ethics

• INDIVIDUAL ENVIRONMENTAL(a) Values (a) Competition

(b) Work Background (b) Economic Conditions

(c) Family Status (c) Social / Cultural Institutions

(d) Personality

• ORGANIZATIONAL

(a) Top level management philosophy

(b) The firm’s reward system

(c) Job Dimensions

Ethical Issues in Business

1.Many of the ethical issues and dilemmas in business are rooted in the fact that political systems, law, economic development, and culture vary significantly from nation to nation.

2. The most common ethical issues involve in businesses are:

Employment practices Human rights Environmental regulations

Ethics @ Workplace

Ethics in the workplace in its simplest termsmeans doing the right things that guide yourbehavior at work.

On-the-Job Ethical Dilemmas

Situation in which abusiness decision may beinfluenced for personalgain.

Employee’sdisclosure of illegal,immoral, or unethicalpractices in theorganization.

Businesspeople expectemployees to be loyaland truthful, but ethicalconflicts may arise.

Telling the truth andadhering to deeply felt ethical principles inbusiness decisions

Golden Rules of Ethics at Workplace• Body Language• Avoid Creating Disturbance• Trust & Respect for Others Work• Don’t Interfere In Others Work• Respect the Privacy of your Co-workers• Avoid Ethnic & Gender Biasness• Improve Your Self Presentation• Avoid Lobbying• No/Least Personal Work During Work Hours• Maintain the balance between• transparency/openness and confidentiality

Benefits of EthicsThe list of potential benefits: Fostering a more satisfying and productive working

environment Building and sustaining Organisation reputation Maintaining the trust of staff to ensure continued self-regulation Providing ethical guidance for employees prior to makingdifficult decisions Aligning the work efforts of employees with the Organisation’sbroader mission and vision Increased employee loyalty, higher commitment and morale as

well as lower staff turnover Attraction of ‘high-quality’ staff Reputation benefits (customers and suppliers) More open and innovative culture Decreased cost of borrowing and insurance Generation of good-will in the communities in which thebusiness operates

HOW ORGANIZATIONS SHAPE ETHICAL CONDUCT

Ethical Awareness Code of Conduct Formal statement that defines how the

organization expects and requires employees to resolve ethical questions.

Ethical Reasoning Codes of conduct cannot detail a solution for every ethical situation,

so corporations provide training in ethical reasoning.

Ethical Action Helping employees recognize and reason through ethical problems

and turning them into ethical actions.

Ethical Leadership Executives must demonstrate ethical behavior in their actions.