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Meaning of Ethics

Good or
Taken Bad,
Decided by Leads to Series of together Right or
Character Conduct
of a man of a person Actions Considered As wrong,
Moral or
Immoral

By which
we can
Known as
Judge
Moral
again
Judgement

Moral
Standards Requires
Theme: Business Ethics

Refers to issues of right, wrong,


Ethics fairness, and justice.

Business Focuses on ethical issues that arise


Ethics in the commercial realm.

3
Views on relationship between Business
& Ethics
Unitarian View: Business & morality cannot be separated and it must
play by the rules of ethics of the community.

Moral Structure

Business

Moral Ethics
Ethics: What Does It Really Mean???

Derived from Greek word Ethicos meaning


Character or Manners

Science of character of a person expressed as right


or wrong conduct or action.

Set of moral principles prescribing code, explains


what is good and right, or bad and wrong.
1. What is business social
responsibility?
Business social responsibility:
This refers to the obligation that every
business has to respect the interests of all
its stakeholders.

Business ethics:
This refers to the moral rules that should
guide people working in business. It helps
people in business to decide whether a
decision is right or wrong regardless of
whether it is profitable or not.
3. What are the characteristics of
a socially responsible business?
1. Promoting ethical awareness and sensitivity
among staff
This can be achieved through developing an
ethical code for the firm.
An ethical code is a document setting out
guidelines for employees when making
decisions
In some businesses this code forms part of the
employment contract. Breaking the code of
ethics can provide legally acceptable grounds
for a dismissal from a job.
When new staff members join a new company
the code of ethics should clearly be
communicated in the induction process. Quiet
reminders (in newsletters, meetings, notice
boards) is an effective way of promoting the
necessity to adhere to the standard of
practices.
This positive ethical promotion of business
practices can be recognised by top
management through rewards for staff
members.
Examples: bonus pay, promotion
2. Promoting Openness with stakeholders
Social responsibility
Employees No discrimination/harassment
Fair wages & promotion system
Safe work conditions
Investors Open and honest financial information
No dishonest business practices
No excessive salaries / perks paid to top
management (FAS officials 2008)
Society Promote local produce to sustain local jobs
Promote green products to protect
environment
Social responsibility

Suppliers Pay bills on time


Honour contracts
Fair negotiations
Customers Truthful and accurate advertising
Products that are safe and reliable
Complaints must be dealt with speedily

Govt Pay correct tax measures


Grants given should be used for correct
purpose
Local, national and EU law obeyed
4. What are the important environmental
issues facing business?
1. OZONE DEPLETION Causing skin cancer and
damage to growth of crops
2. CLIMATE CHANGE fossil fuels such as oil &
gas are increasing global temperatures. This will
affect weather patterns such as melting of ice
caps, floods, storms & droughts.
NOTE: DEC 2009 severe floods in many regions
JAN 2010 4 Weeks of arctic like conditions
3. AIR POLLUTION emissions from factories,
vehicles are releasing cancer causing chemicals
into the atmosphere. Acid rain (car exhausts
fumes and the burning of fossil fuels) mixed
with rainwater is killing forests and lakes.
4. WATER POLLUTION slurry from farmyards and
materials from industries and households are dumped
into rivers, lakes and seas. This can contaminate local
drinking water and cause mass killing of fish.

5. WASTE DISPOSAL industrial waste dumped on land


or at sea will eventually end up contaminating the soil
and water. Throwaway products are marketed for
convenience with excess packaging which are filling up
our landfill sites. This situation is not sustainable.

6. DESTRUCTION OF NATURAL RESOURCES


destruction of our natural resources including natural
habitats (forests, bogs, rivers, coast lines). This has
lead to certain plant and animal life being extinct.

7. DWINDLING SUPPLIES OF FOSSIL FUELS Fossil


fuels such as oil and gas are running out. These will be
exhausted in the future decades unless they are
conserved.
How green taxes work:

The more a firm The less a firm


pollutes pollutes

1. Higher green 1. Lower green


2. Higher costs 2. Lower costs
taxes imposed taxes imposed

3. More
3. Less 4. Rise in sales
4. Fall in sales & profits
competitive
competitive prices
& profits
prices
Societys Expectations Versus
Businesss Actual Social Performance
Societys
Expectations
of Business
Performance
Expected and Actual
Social Performance:

Social Problem

Social Businesss Actual Social


Problem Performance

1960s 2000s
Time

14
Reference books

Business Ethics: An Indian Perspective by Prof. P.S. Bajaj


/ Dr. Raj Agrawal

Business Ethics: Text & cases by C.S.V. Murthy

A Study in Business Ethics by Rituparna Raj

Business Ethics concepts and cases by Manuel G.


Velasquez
Any quires!