Business ethics

MANU H NATESH MBA,M.Com. BMSEAC [email protected]


ethics• moral principles that govern a person's behaviour or the

conducting of an activity• the branch of knowledge that deals with moral

principles.• fundamental principles of decent human conduct. It

includes study of universal values such as the essential equality of all men and women, human or natural rights, obedience to the law of land, concern for health and safety and, increasingly, also for the natural environment.

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Business ethics

• Business ethics (also corporate ethics) is a form of applied ethics or professionalethics that examines ethical principles and moral or ethical problems that arise in a business environment. It applies to all aspects of business conduct and is relevant to the conduct of individuals and entire organizations.


Need or Importance of Business Ethics


Principles of Business Ethics• 12 Ethical Principles • Honesty• Integrity• Promise-Keeping & Trustworthiness• Loyalty• Fairness• Concern for Others• Respect for Others• Law Abiding• Commitment to Excellence• Leadership• Reputation & Morale• Accountability


SCOPE OF BUSINESS ETHICS• Ethics in Compliance Compliance is about obeying and adhering to rules and

authority. The motivation for being compliant could be to do the right thing out of the fear of being caught rather than a desire to be abiding by the law.


Ethics in Finance

The ethical issues in finance that companies and employees are confronted with include:

• In accounting – window dressing,

misleading financial analysis.• Related party transactions not at arm’s

length• Insider trading, securities fraud leading

to manipulation of the financial markets.

• Executive compensation.• Bribery, kickbacks, over billing of

expenses, facilitation payments.• Fake reimbursements


Ethics in Human Resources

• Human resource management (HRM) plays a decisive role in introducing and implementing ethics. Ethics should be a pivotal issue for HR specialists. The ethics of human resource management (HRM) covers those ethical issues arising around the employer-employee relationship, such as the rights and duties owed between employer and employee.


Ethics in Human Resources

• Discrimination issues i.e. discrimination on the bases of age, gender, race, religion, disabilities, weight etc.

• Sexual harassment.• Affirmative Action.• Issues surrounding the representation of

employees and the democratization of the workplace, trade ization.

• Issues affecting the privacy of the employee: workplace surveillance, drug testing.

• Issues affecting the privacy of the employer: whistle-blowing.

• Issues relating to the fairness of the employment contract and the balance of power between employer and employee.

• Occupational safety and health.


Ethics in Marketing• Pricing: price fixing, price

discrimination, price skimming.

• Anti-competitive practices like manipulation of supply, exclusive dealing arrangements, tying arrangements etc.

• Misleading advertisements• Content of advertisements.• Children and marketing.• Black markets, grey markets.


Ethics of Production• Defective, addictive and

inherently dangerous products and

• Ethical relations between the company and the environment include pollution, environmental ethics, and carbon emissions trading.

• Ethical problems arising out of new technologies for eg. Genetically modified food

• Product testing ethics


Ethics in IPR knowledge and skills

• Patent infringement• Patent misuse• Copyright infringement• Copyright misuse• Trademark infringement• Misuse of IPR’s


Types of Ethics

• Transactional ethics• Participatory ethics• Recognitional ethics


Field of ethics

• 1. Descriptive Ethics: Different societies have different moral standards.2. Normative Ethics : This action is wrong in this society, but it is right in another.

• 3. Analytic Ethics : Morality is relative.


• Descriptive EthicsThe category of descriptive ethics is the easiest to understand - it simply involves describing how people behave and/or what sorts of moral standards they claim to follow. Descriptive ethics incorporates research from the fields of anthropology, psychology, sociology and history as part of the process of understanding what people do or have believed about moral norms.

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• Normative EthicsThe category of normative ethics involves creating or evaluating moral standards. Thus, it is an attempt to figure out what people should do or whether their current moral behavior is reasonable.

Traditionally, most of the field of moral philosophy has involved normative ethics - there are few philosophers out there who haven't tried their hand at explaining what they think people should do and why.

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• Analytic Ethics (Metaethics)The category of analytic ethics, also often referred to as metaethics, is perhaps the most difficult of the three to understand. In fact, some philosophers disagree as to whether or not it should be considered an independent pursuit, arguing that it should instead be included under Normative Ethics. Nevertheless, it is discussed independently often enough that it deserves its own discussion here.

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SOURCES OF ETHICAL STANDARDS

• The utilitarian approach• The right approach(deontological)• The fairness or justice approach• The common good approach• The virtue approach


Factors influencing Business Ethics

• Leadership• Individual characteristics• Environment• Corporate culture• Strategy and performance


Importance of Business Ethics• Goodwill• Profitability• Survival of business• Healthy competition• Customer satisfaction• Safeguarding consumer rights• Protecting employees and shareholders• Smooth function of business• Consumer movement• Importance of labor

Business ethics

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