Business Ethics & Governance

Instructor: Syed M. Zubair Azam

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St
Session
Date: 20/06/2014
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Topics to be Explored
1. What is Meant by Ethics, Morality.
2. Classifying Ethics into Types and Levels.
3. Emergence of Need of Teaching and Studying
Business Ethics.
4. Myths surrounding Business Ethics
5. Good Business Does Pay-off
Ethics
The study of the general nature of morals and
of specific moral choices; moral philosophy;
and the rules or standards governing the
conduct of the members of a profession
(American Dictionary of Heritage, 2009).
General nature of moral (Good or bad, ethical or
unethical)
moral choices (what should have been)
moral philosophy (values, norms, principles)
Rules and standards (Judgments)
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Morality
the standards
That
An individual or a group has
About
What is right and wrong
Or
Good and evil
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Case Activity - 1
An 81-year-old woman buys a cup of coffee from
McDonalds. It spills on her lap. She suffers third-
degree burns, spends 8 days in the hospital, and
undergoes skin graft operations. McDonalds
kept its coffee at 180-190 degrees; most coffee
at home is 135-140 degrees. Serious burn
hazards exist at 140 or higher.
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Moral Intuitions or Sentiments
Ethical Deliberation
The gut reactions to a situation as to what is right or
wrong
The process of consciously reasoning about what is
right and wrong and giving defensible reasons for
actions that reach far beyond ones initial moral
intuitions.
Disagreement in ethics
Disagreement about the Facts of the case.
Disagreement about what One should do
(Self-preservation).
Disagreement on the framing of the case.
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Framework of Classifying Business
Ethics
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A Crisis in Business Ethics
Consumer trust of businesses is declining..
Global Financial crisis (2007-2008)
2 Primary reasons of Crisis (Transparency
and Accountability)
No sector is exempt from ethical misconduct
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Why Study Business Ethics?
Reports of unethical behavior are on the rise
Major scandals in the fields of business, politics, sports,
science, individual concerns etc.
http://en.wikipedia.org/wiki/List_of_corporate_collapses_
and_scandals
Societys evaluation of right or wrong affects its ability to
achieve its business goals.
Individual ethics alone is not sufficient.
Studying business ethics helps identify ethical issues to key
stakeholders
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Public Trust on Financial Services Industry

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Josephson Institute of Ethics Report Card survey of teens
89 % feel that being an ethical person is more
important than being rich
59 % admitted to cheating on a test within the last
year
One-third admitted to using the Internet to plagiarize
an assignment
students surveyed
25 % admitted to lying on some of the survey
questions
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Teens Perceptions about Ethics
Deloitte survey of Teens
71 % are prepared to make ethical decisions
38 % feel that sometimes it is necessary to
cheat, lie, plagiarize or violence to SUCCEED.
25 % say it is fair to cheat in exams and tests.
69 % agree that ethical people are more
successful

Teens Intention towards Ethics
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Cross-Sectoral Analysis of Public Trust

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McKensey Quarterly study (2009): Employees respond that they have observed
misconduct in their companies
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Descriptive Ethics
Refers to the study of people's beliefs about
Morality.
What do people think about;
Womens status in society,
Role of Religion in Government,
Respect of Parents especially in Conflicting situations,
Use of Resources for Personal Gains.
Etc.
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Normative Ethics
Ethical standards are generally accepted
rules of conduct that Govern Society.
Ethical Rules are both standards and
expectations for behavior, and we have
developed them for nearly all aspects of Life.
Ethics consist of those unwritten rules we have
developed for our interaction with each other.
Ethics consists of standards and norms for
behavior that are beyond laws and legal rights
E.g., line cutters, exam cheaters, adulterers (in some
society).
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Analytical Ethics (Meta-Ethics)
The Study of Meanings of Right and Wrong..
The study of ethical characteristics, factors,
Statements, Attitudes and Judgments..
Philosophical orientation towards
Understanding the Specific Situations and
Choices
Positivism
Realism
Relativism
Social Constructionism
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We dont intend to Discuss
them in 1
st
Lecture
Comparative Analysis
Descriptive ethics: What do people think is
right?
Normative (prescriptive) ethics: How should
people act?
Applied ethics: How do we take moral
knowledge and put it into practice?
Meta-ethics: What does Right" even mean?
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Myths Surrounding Business Ethics
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A myth is a belief given uncritical acceptance by the
members of a group, especially in support of
existing or traditional practices and institutions.

Myth 1: Ethics is a personal, individual affair, not a
public or debatable matter
Myth 2: Business and ethics do not mix
Myth 3: Ethics in business is relative
Myth 4: Good business means good ethics
Myth 5: Information and computing are amoral
Organizational and Global Ethical
Culture

Ethical culture describes the component of
corporate culture that captures the values and
norms that an organization defines as
appropriate conduct
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Benefits of Business Ethics
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Benefits of Business Ethics
Better ethical climate
Employee commitment and trust
Investor loyalty and trust
Customer satisfaction and trust
Long term profits

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Questions Reviewed
1. What is meant by Ethics?
2. What is Morality? What are moral and non-
moral standards? How can we differentiate
them?
3. What is the framework of studying business
ethics? How can we classify business ethics?
4. Why shall students study business ethics?
5. Why is it necessary to TEACH about ethics?
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HomeWork
Assignments
Valuing Corporate Social Responsibility an
Article Uploaded on SZABDESK.
Movie to Watch
V for Vendetta
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Thank You