BUSINESS ETHICS - 10 DEC

8/7/2019 BUSINESS ETHICS - 10 DEC

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BUSINESS ETHICS &BUSINESS ETHICS &CORPORATECORPORATE

GOVERNACEGOVERNACE

1010thth

DecemberDecember



Normative ethical theoriesNormative ethical theories

Traditional Ethical theories:Traditional Ethical theories:

-- TheseThese theoriestheories start start withwith anan assumptionassumption about about thethenaturenature of of thethe worldworld andand moremore specificallyspecifically assumptionsassumptionsabout about thethe humanhuman beingsbeings..

InIn thethe figfig.. below,below, it it sayssays thethe theoriestheories areare basedbased onon thethemoralmoral judgment judgment onon thethe outcomesoutcomes of of aa certaincertain actionaction.. If If thesethese outcomesoutcomes areare desirabledesirable thenthen thethe actionaction inin questionquestionisis morallymorally right,right, whereaswhereas if if thethe outcomeoutcome of of thethe actionaction arearenot not desirable,desirable, thethe actionaction isis morallymorally wrongwrong..

NonNon--consequentialist ethicsconsequentialist ethics Consequentialist ethicsConsequentialist ethics

Motivation/Principles

Action Outcomes



TheThe moralmoral judgment judgment inin thethecons equentialist cons equentialist theori es theori es isis thusthus basedbasedonon thethe intendedintended outcomes,outcomes, thethe aims,aims, oror

thethe goalsgoals of of aa certaincertain actionaction..

TheoriesTheories that that basebase thethe moralmoral judgment judgment onon

thethe underlyingunderlying principlesprinciples of of thethe decisiondecision--makersmakers motivationmotivation areare non non--cons equentialist cons equentialist approachapproach..



Consequentialist TheoriesConsequentialist Theories EgoismEgoism:: It It isis oneone of of thethe oldest oldest philosophicalphilosophical ideasideas.. Here,Here,

asas actionaction isis morallymorally right right if if thethe decisiondecision makermaker freelyfreelydecidesdecides inin orderorder toto pursuepursue eithereither theirtheir short short--termterm desiresdesires ororlonglong--termterm interestsinterests..EE..gg.. AA producerproducer whowho isis manufacturingmanufacturing faultyfaulty goods,goods, thetheconsumersconsumers might might suffersuffer inin thethe short short--termterm.. InIn thethe longlong--termtermthethe customerscustomers havehave alternatealternate choices,choices, thethe producersproducers tradetrademight might suffersuffer inin that that casecase..

EgoismEgoism basedbased on on d esir ed esir e isis that that it it rendersrenders different different approachapproach towardstowards lifelife asas equivalent equivalent..EE..gg.. OneOne student student whowho isis moremore focusedfocused onon sportssports ratherrather

thanthan anotheranother sinceresincere student student whowho isis moremore hardhard workingworkingtowardstowards studiesstudies willwill bebe equallyequally admirableadmirable if if theythey bothbothfollowfollow theirtheir ownown desiresdesires..

EgoismEgoism based based on on thethe pur suit spur suit s of of int er est sint er est s..

ConsideringConsidering thethe samesame ee..gg.. therethere wouldwould bebe aa gapgap createdcreatedbetweenbetween desiredesire andand what what isis inin ones ones ultimateultimate interestsinterests..



UtilitarianismUtilitarianism:: AnAn actionaction isis morallymorally right,right, if if it it resultsresults inin thethe greatest greatest amount amount of of goodgood forfor thethegreatest greatest amount amount of of peoplepeople affectedaffected byby thetheactionaction..

Here,Here, thethe principleprinciple isis gr eat est gr eat est happin ess happin ess principl eprincipl e isis thethe ultimateultimate consequentialist consequentialist principleprinciple asas it it focusesfocuses solelysolely onon thethecons equenc es cons equenc es of of an an action action and and wei ghs wei ghs thethe

good good r es ults r es ults against against thethe bad bad r es ults r es ults andandfinallyfinally encouragesencourages thethe actionaction whichwhich resultsresults inin thethegreatest greatest amount amount of of goodgood forfor allall peoplepeople involvedinvolved..



NonNon--consequentialistconsequentialist

theoriestheories EthicsEthics of of dutyduty:: It It beginsbegins withwith thethe assignationassignation of of thethe

dutyduty toto act act inin aa certaincertain wayway..

EE..gg.. AsAs aa responsibleresponsible citizencitizen oneone wouldwould not not likelike toto

exploit exploit anyany childchild laborlabor fromfrom aa thirdthird worldworld country,country,thereforetherefore thisthis act act wouldwould bebe consideredconsidered deemeddeemed immoralimmoraloror unethicalunethical..

EthicsEthics of of rightsrights andand justicejustice:: RightsRights of of life,life, freedomfreedomandand propertyproperty.. NaturalNatural rightsrights areare certaincertain basicbasic onesones..

BasicBasic humanhuman rightsrights todaytoday wouldwould includeinclude aa right right toto life,life,liberty,liberty, justice,justice, education,education, fairfair wages,wages, freedomfreedom toto belief,belief,expressionexpression..



Contemporary ethicalContemporary ethical

theoriestheories VirtueVirtue ethicsethics:: ThisThis contendscontends that that morallymorally correct correct

actionsactions areare thosethose undertakenundertaken byby virtuousvirtuous

characterscharacters.. Therefore,Therefore, thethe formationformation of of aavirtuousvirtuous charactercharacter isis thethe first first stepstep towardstowardsmorallymorally correct correct behaviorbehavior..

VirtuesVirtues areare aa set set of of acquiredacquired traitstraits of of charactercharacter

that that enableenable aa personperson toto leadlead goodgood lifelife..-- IntellectualIntellectual virtuesvirtues:: WisdomWisdom

-- MoralMoral virtuesvirtues:: Honesty,Honesty, loyalty,loyalty, modestymodesty..



Feminist Feminist ethicsethics:: MenMen andand womenwomen havehave fairlyfairlydifferent different attitudesattitudes towardstowards organizingorganizing socialsocial lifelife..

It It isis anan approachapproach that that prioritizesprioritizes empathy,empathy,

harmoniousharmonious andand healthyhealthy socialsocial relationships,relationships,carecare forfor oneone anotheranother andand avoidanceavoidance of of harmharm..

ThisThis showsshows aa particularparticular attitudeattitude towardstowards ethicalethicalconflictsconflicts that that isis moremore withinwithin thethe frameworkframework of of what what womenwomen wouldwould allegedlyallegedly dodo inin aa suchsuch asassituationsituation..



DiscourseDiscourse ethicsethics:: TheyThey contendcontend that that thetheultimateultimate goalgoal of of ethicalethical issuesissues inin businessbusinessshouldshould bebe thethe peacefulpeaceful settlement settlement of of conflictsconflicts..

ThusThus it it aimsaims toto solvesolve ethicalethical conflictsconflicts bybyprovidingproviding aa processprocess of of normnorm generationgenerationthroughthrough rationalrational reflectionreflection onon thethe realreal lifelife

experienceexperience of of allall relevant relevant participantsparticipants..



What is business ethicsWhat is business ethics

managementmanagement It It isis direct direct attempt attempt toto formallyformally oror informallyinformally managemanage

ethicalethical issuesissues throughthrough speci f ic speci f ic polici es,polici es, practic es practic es and and programs programs ..

ComponentsComponents of of businessbusiness ethicsethics management management::-- MissionMission && valuevalue statementsstatements-- CodeCode of of ethicsethics-- ReportingReporting channelschannels

-- RiskRisk analysisanalysis andand management management -- EthicsEthics managersmanagers && committeecommittee-- EthicsEthics trainingtraining-- EthicsEthics educationeducation

-- Auditing,Auditing, accountingaccounting && reportingreporting



Mission Mission stat ement stat ement:: GeneralGeneral statementsstatements of of corporatecorporate aims,aims, beliefs,beliefs, andand valuesvalues..

EE..gg.. MarksMarks && SpencerSpencer aimsaims toto bebe thethe most most trustedtrustedretailerretailer whereverwherever wewe tradetrade demonstratingdemonstrating aa clearclearsensesense of of socialsocial responsibilityresponsibility andand consistencyconsistency inin ourourdecisiondecision--makingmaking andand behaviorbehavior..

C od eC od e of of ethics ethics:: TheThe typetype of of conduct conduct of of ananemployeeemployee isis desireddesired andand expectedexpected fromfrom anan ethicalethicalpoint point of of viewview withinwithin aa certaincertain organization,organization,profession,profession, industryindustry..

Reportin gReportin g chann els chann els:: OrganizationsOrganizations nowadaysnowadayshavehave introducedintroduced ethicsethics hotlineshotlines oror otherother formsforms of of reportingreporting channelschannels specificallyspecifically dedicateddedicated totoprovidingproviding aa mechanismmechanism forfor employeesemployees toto notifynotifymanagement management of of ethicalethical problemsproblems andand toto seekseek helphelp..



E thics E thics managers,managers, off ic ers off ic ers and and committ ees committ ees::OrganizationsOrganizations havehave ethicsethics officers,officers, CSRCSR committeecommittee..EE..gg.. AstrazenecaAstrazeneca hashas aa NonNon--ExecutiveExecutive DirectorDirector positionpositionforfor CSR,CSR, whowho managesmanages aa committeecommittee onon thethe samesame toto workworkuponupon futurefuture andand current current activitiesactivities onon CSRCSR..

E thics E thics cons ultant cons ultant:: InitiallyInitially thethe environmentalenvironmentalconsultantsconsultants usedused toto renderrender thethe servicesservices andand consultingconsulting

onon thethe ethicalethical issues,issues, but but graduallygradually asas thethe ethicalethical issuesissueshavehave risen,risen, thethe market market forfor thesethese kindkind of of consultantsconsultantsgrewgrew.. Now,Now, consultingconsulting firmsfirms likelike KPMG,KPMG, PWCPWC alsoalso offersoffersethicalethical consultancyconsultancy..

E thics E thics ed ucation ed ucation and and trainin gtrainin g:: EthicsEthics trainingtraining hashasbecomebecome thethe needneed of of thethe hour,hour, eithereither throughthrough externalexternalconsultants,consultants, corporatecorporate trainingtraining specialistsspecialists.. OrganizationsOrganizationsinin USUS andand EuropeEurope hashas becomebecome seriousserious regardingregarding ethicsethicseducationeducation of of employeesemployees..



S tak ehold er S tak ehold er cons ultation cons ultation and and partn ershippartn ershipprogramprogram:: If If GOODGOOD businessbusiness ethicsethics isis about about doingdoing

thethe RIGHTRIGHT thing,thing, thenthen it it isis essentialessential that that organizationsorganizations consult consult withwith relevant relevant stakeholdersstakeholders..

Risk Risk analysis analysis:: ManagingManaging businessbusiness ethicsethics bybyidentifyingidentifying areasareas of of risk,risk, assessingassessing thethe likelihoodlikelihood andand

scalescale of of risksrisks andand puttingputting inin placeplace measuresmeasures totomitigatemitigate oror prevent prevent suchsuch risksrisks fromfrom harmingharming thethebusinessbusiness hashas ledled moremore sophisticatedsophisticated waysways of of managingmanaging businessbusiness ethicsethics..

uditin g,Auditin g, accountin gaccountin g:: Measuring,Measuring, evaluatingevaluating andandcommunicatingcommunicating thethe organizationsorganizations impactsimpacts andandperformanceperformance onon aa rangerange of of social,social, ethicalethical andandenvironmentalenvironmental issuesissues of of interestsinterests toto theirtheirstakeholdersstakeholders..



Corporate SocialCorporate SocialResponsibilityResponsibility

CorporateCorporate socialsocial initiativesinitiatives areare majormajor activitiesactivitiesundertakenundertaken byby aa corporationcorporation toto s upport s upport social social caus es caus es and and toto ful f ill ful f ill commitments commitments toto corporatecorporate socialsocialresponsibilityresponsibility..

CausesCauses likelike::

-- CommunityCommunity healthhealth

-- EducationEducation

-- Employment Employment -- Environment Environment

-- EconomicEconomic development development (low(low--interest interest housinghousing loans)loans)

-- BasicBasic humanhuman needsneeds



6 Social initiatives by the6 Social initiatives by theCorporateCorporate

CauseCause PromotionsPromotions::-- ProvidingProviding fund,fund, inin--kindkind corporatecorporate resourcesresources toto increaseincreaseawarenessawareness..-- TheThe corporatecorporate maymay initiateinitiate oror managemanage thethe promotionpromotion

onon itsits ownown..EE..gg.. BodyBody ShopShop promotespromotes aa banban onon thethe useuse of of animalsanimalstoto test test chemicalschemicals..

CauseCause relatedrelated MarketingMarketing::

-- ContributingContributing oror donatingdonating aa certaincertain percentagepercentage revenuesrevenuestoto aa specificspecific causecause basedbased onon product product salessales..EE..gg.. WebsitesWebsites provideprovide aa certaincertain percentagepercentage of of theirtheirrevenuesrevenues forfor everyevery forwardedforwarded ee--mailsmails forfor severalseveral socialsocialcausescauses..



CorporateCorporate PhilanthropyPhilanthropy::

-- Direct Direct contributionscontributions forfor aa charitablecharitable causecause like,like, cashcash

grants,grants, donations,donations, inin--kindskinds servicesservices.. TheThe most most traditionaltraditionalmethodmethod..

CommunityCommunity VolunteeringVolunteering::

-- AnAn organizationorganization supportssupports oror encouragesencourages itsits employees,employees,

retailretail partnerspartners toto volunteervolunteer theirtheir timetime toto support support somesomelocallocal communitycommunity organizationsorganizations..

EE..gg.. ShellShell employeesemployees worksworks withwith TheThe OceanOceanConservancyConservancy onon aa beachbeach cleanclean--upup..

SociallySocially responsibleresponsible businessbusiness practicespractices::

-- AA corporationcorporation adoptsadopts oror conductsconducts discretionarydiscretionarybusinessbusiness practicespractices that that support support socialsocial causescauses toto improveimprovecommunitycommunity wellwell beingbeing andand protect protect thethe environment environment..

BUSINESS ETHICS - 10 DEC

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