CORPORATEETHICS
INTRODUCTION
∫ Business Ethics as an applied branch of
General Ethics must be studied from the
perspective of Philosophy.
∫ This is because Ethics is a part of moral
principles, you will not know Ethics without
being philosophical.
Ethics & Philosophy
o Philosophy, etymologically came from
two Greek words philos, which means
love and sophia, means wisdom. (Love of
Wisdom)
o Hence, a philosopher is one who loves
wisdom.
o As a science, philosophy is interested
with the meaning of reality including
our human experiences.
o It is a science that seeks to explain the
ultimate cause of everything by the use
of human reason alone.
Division of Philosophy
1. Theoretical Philosophy – studies the truth to
be known, e.g. God, immortality of the soul,
origin of the universe.
2. Practical Philosophy – studies truths to be
acted upon, e.g. ethics, axiology(study of
vales, goodness etc.), semantics(relation
between words, phases, signs & symbols),
etc.
Division of Philosophy
THEORETICAL PRACTICAL
CosmologyOrigin of universe
OntologyThe theory of being
MetaphysicsMeta (beyond) physikon
(nature)
PsychologyHuman/animal behavior
TheodicyGod on logical abstraction
EpistemologyTheory of knowledge
SemanticsWords and its linguistic
forms
AxiologyDiscourse of value judgment
AestheticsPrinciples of beauty and art
Logic
Reasoning to establish truth
Ethics
From Greek word “ethos” means
“Characteristic way of acting” which
is proper to as a rational being.
Ethics & Morality
Morality
o Morality refers to the quality of goodness orbadness in a human act.
o Good is described as moral and bad as immoral.
o It means conformity to the rules of right conduct.
Ethics
o Ethics refer to the formal study of those standardsand conduct.
o It is also often called “ moral philosophy”.
Ethics As NormativeScience
• Ethics is considered a Normative Science because it is concerned with the systematic study of the norms of human conduct, as distinguished from formal sciences such as Mathematics, chemistry physics etc..
• Ethics is a normative science because it involves a systematic search for moral principles and norms that are justify our moral judgments.
Three Categories ofGeneral Ethics
Three Categories of
General Ethics
o Descriptive ethics maintains objectivity in
studying human behavior but it does not
provide a clear standard of morality.
o It simply describes how people act and
does not prescribe how people should act.
Three Categories of
General Ethics
Involves moral judgment based on ethical
norm or theory.
This consists both the basic moral
principles and values and the particular
moral rules that govern people’s behavior,
which is right or moral and wrong or
immoral.
Three Categories of
General Ethics
It does not describe moral beliefs of
people, does not evaluate the process of
moral reasoning, but simply analyzes the
usage and meaning of words.
THE PROBLEM OF ETHICALRELATIVISM & SITUATION ETHICS
Ethical Relativism
o Ethical relativism claims that when any two
cultures or any people hold different moral
values of an action, both can be right.
o An action may be right for one person or
society and the same action taken in the same
way may be wrong for another reason, and yet,
both persons are equally correct.
THE PROBLEM OF ETHICAL
RELATIVISM & SITUATION ETHICS
Approaches to Morel Difference
There is no Moral Truth
There is no Universal Truth
Deep down, we can find basic Moral Truth
There is one Universal Moral Truth
THE PROBLEM OF ETHICAL
RELATIVISM & SITUATION ETHICS
There is No Moral Truth
There is no ultimate right or wrong.
Moral views differ from one person to
another.
This results to a subjective morality, in
which case, what is good for one person
may be bad for another.
THE PROBLEM OF ETHICALRELATIVISM & SITUATION ETHICS
There is No Universal Truth
Each Culture has its own set of rules
that are valid for that culture, and we
have no right to interfere, just as they
have no right to interfere with our rules.
This ethical paradigm maintains that
there are moral truths that exist but
these truths are relative and dependent
on cultures and beliefs of people.
THE PROBLEM OF ETHICAL
RELATIVISM & SITUATION ETHICS
Deep down , We can Find Basic Moral Truth
Despite differences, people of different
cultures can still agree on a certain moral
basics.
There are some common ground on basic
moral principles.
This is called “Soft Universalism”
THE PROBLEM OF ETHICAL RELATIVISM & SITUATION ETHICS
There is One Universal Moral Truth
This view is alsoknown as harduniversalism ormoral absolutism.
This moralparadigmmaintains thatthere is only oneuniversal moralcode thateverybody mustfollow.
Because this moralcode is universal andobjective, moralproblems, and moralconflicts can besolved throughproper moralreasoning.
Deontological Vs. Teleological Approaches
To Ethical Evaluation of
Human Conduct
A
C
T
I
O
N
Motives/IntentionsEnd of the actor
Means/Action itselfEnd of the Act
Non -Consequentialist
Consequences/Result,Probable and actual
Consequentialist
Deontological Vs. Teleological Approaches
To Ethical Evaluation of the Human Conduct
Deontological Ethics
• Also known as non-consequentialist
approach is a body of ethical theories that
measures and evaluates the nature of a
moral act based on the validity of the
motive of an act.
• This means that if the motive or intention
of the act is good, then regardless of the
consequences, the whole action is good.
Deontological Vs. TeleologicalApproaches
To Ethical Evaluation of the HumanConduct
Teleological Ethics
Came from the Greek word “tele” which
means far or remote. Known also as
Consequentialist theory measures the
morality of an action based on its
consequences and not on the motive or
intention of the actor.
If the consequence is good, regardless what
motive is, the act is always morally good.
Corporate Social Responsibility(CSR) & Ethics
Definitions and Relationships
Corporate social responsibility (CSR) is the process by which businesses negotiate their role in society
In the business world, ethics is the study of morally appropriate behaviors and decisions, examining what "shouldbe done”
Although the two are linked in most firms, CSR activities are no guarantee of ethical behavior
Recent Evidence of CSRInterest
An Internet search turns up 15,000 plusresponse to “corporate citizenship”
Journals increasingly “rate” businesses (andNGOs) on socially responsive criteria:
• Best place to work
• Most admired
• Best (and worst) corporate reputation
CSR CONTINUUM
Maximize
firm’s profits to
the exclusion of
all else
Balance profits
and social
objectives
Fight social
responsibility
initiatives
Do more than
required; e.g.
engage in
philanthropic
giving
Integrate
social
objectives and
business goals
Do what
it takes to
make a
profit;
skirt the
law; fly
below
social
radar
Comply;
do what
is legally
required
Articulate
social value
objectives
Lead the
industry
and other
businesses
with best
practices
CSR are Grounded by Opposing Objectives (Maximize Profits to Balance Profits with Social Responsibility) and so Activities Range Widely
Do what it takes to make a profit; skirt the law; fly below
social radar
Fight CSR initiatives
Comply with legal requirements
Do more than legally required, e.g., philanthropy
Articulate social (CSR) objectives
Integrate social objectives and business goals
Lead the industry on social objectives
Businesses CSR Activities
Philanthropy
• give money or time or in kind tocharity
• Integrative philanthropy—selectbeneficiaries aligned withcompany interests
Philanthropy will notenhance corporatereputation if a company
• fails to live up to itsphilanthropic image or
• if consumers perceivephilanthropy to bemanipulative
Integrate CSR Globally
• Incorporate values to make it part of anarticulated belief system
• Act worldwide on those values
– Cause-related marketing
– Cause-based cross sector partnerships
• Engage with stakeholders
– Primary stakeholders
– Secondary stakeholders
Business EthicsDevelopment
• The cultural context influencesorganizational ethics
• Top managers also influence ethics
• The combined influence of culture andtop management influenceorganizational ethics and ethicalbehaviors
The Evolving Context forEthics
• From domestic where ethics are shared
• To international where ethics are not sharedwhen companies:
– Make assumptions that ethics are the same
– Ethical absolutism—they adapt to us
– Ethical relativism—we adapt to them
• To global which requires an integrativeapproach to ethics
Emergence of a GlobalBusiness Ethic
Growing sense that responsibility for rightingsocial wrongs belongs to all organizations
Growing business need for integrativemechanisms such as ethics
o Ethics reduce operating uncertainties
o Voluntary guidelines avoid government impositions
Ethical conduct is needed in an increasinglyinterdependent world—everyone in the samegame
Companies wish to avoid problems and/or be goodpublic citizens
Ways Companies IntegrateEthics
• Top management commitment in word and deed
• Company codes of ethics
• Supply chain codes
• Develop, monitor, enforce ethical behavior
• Seek external assistance
External Assistance with Ethics
Industry or professionalcodes
Certification programs,e.g., ISO 9000
Adopt/follow globalcodes
• Caux Round Table Principles
Reasons for Businesses to Engage inDevelopment of a Global Code ofBusiness Ethics
• Create the same opportunity for all businesses if
there are common rules
• Level the playing field
• They are needed in an interconnected world
• They reduce operating uncertainties
• If businesses don’t collaborate, they may not like
what others develop
Four Challenges to a Global Ethic
– Global rules emerge from negotiations and willreflect values of the strong
– Global rules may be viewed as an end ratherthan a beginning
– Rules can depress innovation and creativity
– Rules are static but globalization is dynamic
