Introduction to Business Ethics

WHAT IS BUSINESS ETHICS? Business ethics is the study of business situation, activities, and decisions where issues of right and wrong are addressed.

BUSINESS

ETHICS AND LAW

After defining business ethics we naturally must ask the question whether is it distinct from the law This is true, there is indeed considerable overlap between ethics and law. In fact, the law is essentially an institutionalization or codification of ethics into specific social rules, regulations, and proscriptions. Nevertheless , the two are not equivalent. Perhaps the best way of thinking about ethics and the law is in terms of two interesting domains.

Ethics
Grey area

Law

 In

one sense then, business ethics can be said to begin where the law ends. Business ethics is primarily concerned with those issues not covered by the law, or where there is no definite consensus on whether something is wrong or right. It is often said that business ethics is about the grey area of business, or where, values are in conflict

MORALITY,ETHICS
Morality

AND ETHICAL THEORY

is concerned with the norms, values, and beliefs embedded in social processes which define right and wrong for an individual or a community Ethics is concerned with the study of morality and the application of reason to elucidate specific rules and principles that determine right and wrong for a given situation. These rules and principles are called ethical theories.

RELATIONSHIP BETWEEN MORALITY

ETHICS AND ETHICAL THEORY
Ethics rationalizes morality to produce ethical theory. that Can be applied to any situation

Morality

Ethics

Ethical Theory

Potential solutions to ethical problems

WHY IS BUSINESS ETHICS IMPORTANT?

1.

2.
3. 4.

5.
6. 7. 8.

Power and influence of business in society Contribution towards society Business malpractices Demands of stakeholders Ethical decision making Way to find reason behind infractions Provides with ability to assess benefits and problems It provides with knowledge and skills which help business

WHAT

IS GLOBALIZATION

Globalization is the progressive eroding of the relevance of territorial bases for social, economic and political activities, processes and relations. The technological and political developments have initiated globalization. Thus globalization characterizes deterritorialization. There is growing concern about whether globalization is a fact at all. Some argue that there is nothing like a global economy, because roughly 90% of world trade only takes place either within or between three blocks of EU, North America and east Asia.

WHAT GLOBALIZATION IS NOT?

Globalization

as Internationalization
as Liberalization

Globalization

Globalization Globalization

as Universalization as Westernization

GLOBALIZATION: A KEY CONTEXT FOR BUSINESS ETHICS?

In

context of business ethics, this controversy over globalization plays critical role After all, corporations most notably multinational corporation (MNCs) are at the centre of the publics criticism on globalization. They are accused of exploiting workers in developing countries destroying the environment and , by abusing their economic power, engaging developing countries in so called race to the bottom

 This

term describes a process whereby MNCs pitch developing countries against each other by allocating FDI to those countries that can offer them the most favourable conditions in terms of low tax rates, low level of environmental regulations etc.

However

true these accusations are in practice, there is no doubt that globalization is the most current and demanding arena in which corporations have to define and legitimate the right or wrong of their behavior.

THE

RELEVANCE OF

GLOBALIZATION FOR BUSINESS ETHICS

Cultural

issues Legal issues Accountability issues

SUSTAINABILITY: A BUSINESS ETHICS?

KEY GOAL FOR

Sustainable development is development that needs of the present without compromising the ability of future generations to meet their own needs. Sustainability has become an increasingly common term in the rhetoric surrounding business ethics, and has been widely used ny corporations, government, consultants, and like. Sustainability refers to the long term maintenance of systems according to environmental, economic and social considerations.

THREE COMPONENTS OF
SUSTAINABILITY

Economic

THE TRIPLE BOTTOM LINE

The triple bottom line is a term coined by, and vigorously advocated by, John Elkington, the Director of the sustainability strategy consultancy and author of a number of influential books on corporate environmentalism. His view of the TBL is that it represents the idea that business does not have just one single goal- namely adding economic value - but that it has an extended goal set which necessities adding environmental and social value too.

COMPONENTS
Environmental

OF

TBL

perspective Economic perspective Social perspective

THANK YOU