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Business Ethics

The document provides an overview of business ethics. It discusses key concepts like ethics, morality, theories of ethics including deontological and teleological ethics. It notes some common unethical workplace behaviors identified in a survey. The importance of ethics for business is outlined, covering aspects like stopping malpractices, improving customer confidence, and protecting various stakeholders. The difference between ethics and morals is explained. Sources of ethics and different ethical performance approaches are also summarized.

Education◦
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Business Ethics Ms. Preeti Bhaskar
Unit- 1 ◉Introduction to business ethics ◉Concept of Ethics ◉Ethics and Morality ◉Sources of Ethics ◉Theories of business ethics Deontological Teleological
ETHICAL DILEMMA You are applying for the job of sales associate. You have just found out that you will be given a personality assessment as part of the application process. You feel that this job requires someone who is very high in extraversion, and someone who can handle stress well. You are relatively sociable and can cope with some stress but honestly you are not very high in either trait. The job pays well and it is a great stepping-stone to better jobs. Discussion Questions ◉How are you going to respond when completing the personality questions? ◉What are the advantages and disadvantages of completing the questions honestly? ◉Are you going to make an effort to represent yourself as how you truly are? ◉What are the advantages and disadvantages of completing the questions in a way you think the company is looking for?
BUSINESS ETHICS
What does an ethic mean to you?" Some years ago, one sociologist asked business people, "What does an ethic mean to you?" Among their replies were the following: ◉"Ethics has to do with what my feelings tell me is right or wrong.“ ◉"Ethics has to do with my religious beliefs." ◉"Being ethical is doing what the law requires." ◉"Ethics consists of the standards of behavior our society accepts.” ◉"I don't know what the word means."
Business ethics Business ethics refers to contemporary organizational standards, principles, sets of values and norms that govern the actions and behavior of an individual in the business organization. "Managing ethical behavior is one of the most pervasive and complex problems facing business organizations today"
Business ethics Business Ethics are: ◉ Normal principles and standards that define right and wrong behavior in the world of business. ◉ What is right and wrong is determined by public interest groups/ business organizations.
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Researchers at the Institute of Leadership and Management in the UK asked 1600 managers what they think is unethical behavior in a workplace. ◉Here's the complete list: ◉Taking shortcuts / shoddy work: 72% ◉Lying to hide mistakes: 72% ◉Badmouthing colleagues: 68% ◉Passing the buck 67% ◉Slacking off when no one is watching: 64% ◉Lying to hide your colleagues' mistakes: 63% ◉Taking credit for other colleagues' work: 57% ◉Lying about skills and experience: 54% ◉ Taking low value items: 52%
“ Kinds of Unethical Behavior in Business Theft Lying to employees Violating company internet policies Vendor Relationships Bending the Rules Environmental damage Wages and Working Conditions Misusing company time Mistreating Employees Misrepresentation Financial Misconduct Abusive behavior
Importance of Ethics Stop Business Malpractices Improve Customers' Confidence Survival of Business Safeguarding Consumers' Rights Protecting Employees and Shareholders Develops Good Relations Creates Good Image Smooth Functioning Consumer Movement Consumer Satisfaction Importance of Labour/ employees Healthy Competition
◉Stop Business Malpractices : Some unscrupulous businessmen do business malpractices by indulging in unfair trade practices like black-marketing, artificial high pricing, adulteration, cheating in weights and measures, selling of duplicate and harmful products, hoarding, etc. These business malpractices are harmful to the consumers. Business ethics help to stop these business malpractices. ◉ Improve Customers' Confidence : Business ethics are needed to improve the customers' confidence about the quality, quantity, price, etc. of the products. The customers have more trust and confidence in the businessmen who follow ethical rules. They feel that such businessmen will not cheat Them. ◉Survival of Business : Business ethics are mandatory for the survival of business. The businessmen who do not follow it will have short-term success, but they will fail in the long run. This is because they can cheat a consumer only once. After that, the consumer will not buy goods from that businessman. He will also tell others not to buy from that businessman. So this will defame his image and provoke a negative publicity. This will result in failure of the business. Therefore, if the businessmen do not follow ethical rules, he will fail in the market. So, it is always better to follow appropriate code of conduct to survive in the market. ◉Safeguarding Consumers' Rights : The consumer has many rights such as right to health and safety, right to be informed, right to choose, right to be heard, right to redress, etc. But many businessmen do not respect and protect these rights. Business ethics are must to safeguard these rights of the consumers.
◉Protecting Employees and Shareholders : Business ethics are required to protect the interest of employees, shareholders, competitors, dealers, suppliers, etc. It protects them from exploitation through unfair trade practices. ◉Develops Good Relations : Business ethics are important to develop good and friendly relations between business and society. This will result in a regular supply of good quality goods and services at low prices to the society. It will also result in profits for the businesses thereby resulting in growth of economy. ◉Creates Good Image : Business ethics create a good image for the business and businessmen. If the businessmen follow all ethical rules, then they will be fully accepted and not criticised by the society. The society will always support those businessmen who follow this necessary code of conduct. ◉ Smooth Functioning : If the business follows all the business ethics, then the employees, shareholders, consumers, dealers and suppliers will all be happy. So they will give full cooperation to the business. This will result in smooth functioning of the business. So, the business will grow, expand and diversify easily and quickly. It will have more sales and more profits. ◉ Consumer Movement : Business ethics are gaining importance because of the growth of the consumer movement. Today, the consumers are aware of their rights. Now they are more organised and hence cannot be cheated easily. They take actions against those businessmen who indulge in bad business practices. They boycott poor quality, harmful, high-priced and counterfeit (duplicate) goods. Therefore, the only way to survive in business is to be honest and fair.
◉ Consumer Satisfaction : Today, the consumer is the king of the market. Any business simply cannot survive without the consumers. Therefore, the main aim or objective of business is consumer satisfaction. If the consumer is not satisfied, then there will be no sales and thus no profits too. Consumer will be satisfied only if the business follows all the business ethics, and hence are highly needed. ◉ Importance of Labour : Labour, i.e. employees or workers play a very crucial role in the success of a business. Therefore, business must use business ethics while dealing with the employees. The business must give them proper wages and salaries and provide them with better working conditions. ◉There must be good relations between employer and employees. The employees must also be given proper welfare facilities. ◉ Healthy Competition : The business must use business ethics while dealing with the competitors. They must have healthy competition with the competitors. They must not do cut-throat competition. Similarly, they must give equal opportunities to small-scale business. They must avoid monopoly.This is because a monopoly is harmful to the consumers.
Ethics vs. Morals Ethics Morals Origin Greek word "ethos" meaning“ character” Latin word "mos" meaning "custom” What are they? The rules of conduct recognized in respect to a particular class of human actions or a particular group or culture. Principles or habits with respect to right or wrong conduct. While morals also prescribe dos and don'ts, morality is ultimately a personal compass of right and wrong. Where do they come from? Social system - External Individual - Internal Why we do it? Because society says it is the right thing to do. Because we believe in something being right or wrong. Flexibility Ethics are dependent on others for definition. They tend to be consistent within a certain context, but can vary between contexts. Usually consistent, although can change if an individual’s beliefs change. Acceptability Ethics are governed by professional and legal guidelines within a particular time and place Morality transcends cultural norms
Morals Morals are the social, cultural and religious beliefs or values of an individual or group which tells us what is right or wrong. They are the rules and standards made by the society or culture which is to be followed by us while deciding what is right. Some moral principles are: Do not cheat Be loyal Be patient Always tell the truth Be generous Morals refer to the beliefs what is not objectively right, but what is considered right for any situation, so it can be said that what is morally correct may not be objectively correct.
Ethical Performance ◉Ethical business performance means adhering to society’s basic rules that define right and wrong behavior ◉Major Social challenges faced by business is to balance ethics and economics. ◉Society wants business to be ethical and economically profitable at the same time Whereas Ethics conflicts with profits,
General Inheritance Religion Philosophical Systems Legal System Codes of Conduct Sources of Ethics
Ethics Theories Deontology Teleological Right / Wrong Based on the action Itself Right / Wrong Depends on the outcome of decisions
Deontology Teleology Deontology is an approach to ethics which adheres to the theory that an end does not justify the means teleology is an approach to ethics that adheres to the theory that the end always justifies the means. Deontology is also known as duty- based ethics teleology is also known as results- oriented ethics. Deontology adheres to the Golden Rule which is to do unto others what you want them to do unto you it is also referred to as the greatest happiness principle because it justifies an action if it produces the greatest happiness and least amount of pain. Deontology teaches to be fair and not to use others for selfish reasons teleology teaches about doing whatever actions produce a result that is agreeable to a person. Teleology examines past experiences in order to predict the results of a present action deontology follows what is morally right based on the values that are instilled in each person.
Deontological ethics ◉The term deontological comes from greek word “deon” meaning “duty” ◉This approach is duty based, action based approach, also called humanitarian approach. ◉ for example, the harming of some individuals in order to help others. To the deontologist, each person must be treated with the same level of respect and no one should be treated as a means to an end.
Teleological ethics ◉The word teleology comes from Greek ‘telos’ which means end or purpose. ◉Teleological theories of ethics focus on the consequences caused by an action and are often referred to as "consequentalist" theories ◉This is an ethics approach where actions are judged morally based upon their consequences. ◉One example of teleological ethics is ‘utilitarianism’. It states those actions right that produces the greatest number of happiness to the greatest number of people. ◉This is an ethics approach where actions are judged morally based upon their consequences. ◉One example of teleological ethics is ‘utilitarianism’. It states those actions right that produces the greatest number of happiness to the greatest number of people.
Situational ethics ◉In situational ethics right and wrong depend upon the situation. ◉There are no universal, moral rules or rights. Each case is unique and deserves a unique solution. ◉It teaches that ethical decisions should follow flexible guidelines rather than absolute rules. ◉Since circumstances alter cases situationism holds that in practice what in sometimes and places e call right in other times and places it can be wrong. ◉This approach says that actions aren’t considered bad and harmful until and unless it is performed with a wrong intension. ◉This ethics says end can justify means.
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