Introduction of business ethics.ppt

Introduction of Business

Ethics

What is Ethics?

• Ethics is the branch of philosophy that focuses on morality and the way in which moral principles are applied to everyday life.

• Ethics has to do with fundamental questions such as “What is fair?” “What is just?” “What is the right thing to do in this situation?”

• Ethics involves an active process of applying values, which may range from religious principles to customs and traditions.

What is ethics?

• In latin called ethicus• In Greek is called ethikos come from ethos• Meaning of ethics is character or manners.• Ethics is science of morals, moral principles,

recognized rules of conduct• The character of a man is expressed in terms

of his conduct.– Can be termed as ‘good’ or ‘bad’, ‘right’ or

‘wrong’, ‘moral’ or immoral’

Ethics

• Its Dictionary meaning is – “System of moral principles, rules and conduct”

• The origin of this word is from ETHOS which means Character.

• Ethics has been defined as ability to distinguish between right and wrong and to act accordingly.

What is business ethics?

• Business ethics focuses on what constitutes right or wrong behavior in the world of business.

• Corporate business executives have a responsibility to their shareholders and employees to make decisions that will help their business make a profit.

• But in doing so, businesspeople also have a responsibility to the public and themselves to maintain ethical principles.

Requirements of Ethics in Organization

• Clear Vision• Open Communication• Ethical Teams• Commitment to Ethics

Ethical Decision

• Equitable (Justice to all)• Morally Correct• Good & Fair• Appropriate to the Situation.

Example

• A secretary who has worked for your corporation for fifteen years is involved in a car accident in which she permanently loses the use of her right hand.

• Thus, she can no longer effectively type, file, or perform many of the other functions that she previously had performed and that are included in her job description.

• Your corporation has a very tight budget and does not have sufficient funds to pay for an additional secretary without reallocating budget items.

• The injured secretary has been very loyal to your corporation, and you have been very satisfied with her work and dedication.

• She wants to stay at her job.

• Moreover, she does not believe that she could find other employment at this time.

• Should your corporation fire her, lay her off

with compensation, or find a way to retain her?

How Organizations

Shape Ethical

Conduct

Code of Conduct Formal statement that

defines how the organization expects

and requires employees to resolve

ethical questions.

Ethical Awareness

Codes of conduct cannot detail a solution

for every ethical situation, so

corporations provide training in ethical

reasoning.

Ethical Education

Helping employees recognize and reason

through ethical problems and turning

them into ethical actions.

Ethical Action

Executives must demonstrate ethical

behavior in their actions.

Ethical Leadership

Scope of Business Ethics

(A)Societal Level(B) Stakeholder’s level• Customers• Employees• Shareholders• Banks and Other Financial Institutions• Government(C) Internal Policy Level(D) Personal Policy Level

(A)Societal Level

• Concern for poor and down trodden (compressed).

• No Discrimination against any particular section or group.

• Concern for clean environment• Preservation of Scarce Resources for

Posterity.• Contributing to better quality of life.

(B) Stakeholder’s level

1. Employees• Security of Job• Better working Condition• Better Recommendation• Participative Management• Welfare Facilities

2. Customers• Better Quality of goods• Goods and services at reasonably price• Not to corner stocks and create securities.• Not to practice Discriminating pricing• Not to make false claims about products in

advertisements.

3. Shareholders• Ensure Capital appreciation• Ensure Steady and regular Dividends• Disclose all relevant information• Protect minority shareholder’s interests• Not to window dress balance sheets• Protect interest in times of Mergers,

Amalgamations and Takeovers

4. Banks and other lending Institutions• Guarantee Safety of borrowed funds• Prompt repayment of loans

5. Government• Complying with Rules and Regulations• Honesty in Paying Taxes and other dues• Acting as partner in the progress of the

country

(C) Internal Policy Level

• Fair Practices relating to recruitment, compensation, perks, promotions, etc

• Transformational Leadership to motivate employees to aim at better and higher things in life.

• Better communication at all levels.

(D) Personal Policy level

• Not to misuse others for personal ends• Not to indulge in politics to gain power• Not to spoil promotional chances of others• Not to use office car, stationery, and other facilities

for personal use.• Not to fall prey to shortcuts and easy money• Promise keeping• No violence • Mutual help

Nature of ethics

• 1st , ethics deals with human being only• 2nd, ethics becomes a set of systematic

knowledge about moral behavior and conduct.

• 3rd , ethics is a normative science. judge the value of the facts in terms of an ideal.

• 4th , ethics deals with human conduct, is voluntary and not forced by persons or circumstances.

Three “c’s” of business ethics

• The need for compliance of rules– Laws,– Principles of morality, the customs of community– Policy of the company and fairness

• The contribution business can make to society through– The core value– Quality of one’s products and services– By providing jobs to employees– Usefulness of activities to surrounding community– QWL(Quality of Work Life) influence by ethical and moral

values.

• The consequences of business activity– Towards environment inside the plant and outside

the organization and community– Social responsibility towards shareholders,

bankers, suppliers, customers and employees of organization

– Good public image

Benefits for students( young manager)

• Ability to reason• Resolving ethical issues• Responsible tone for the organization• Provide reliable managers• Manager to realize their social responsibility• Beat high level of integrity in managers• Create awareness of social and moral values

Ethical concepts

• Ideal code of moral principles• How people behave, act and conduct

themselves ?

Features of Business Ethics

• + Features (Hyperlink)• +From Litho pg 4

Importance of Business Ethics

• From Litho Pg. 6