EM

Write your own personal code of ethics,

detailing your feelings about ethical
challenges such as lying to protect an
employee or coworker, favoring one client
over another and using company resources
for personal purposes etc. What role will
your personal ethics play in deciding your
choice of career and acceptance of a job?

 You can cite example (s) from your

internship/ work experience / personal life
Business Ethics

 Business ethics is about relationships, values

and justice and identity (personal,
professional, corporate, national and global)

 Relationship of business and ethics ,

business and society
Business Ethics

What does being “ethical” mean to you?

Raymond Baumhart
Business Ethics

 The gut feeling?

 Religious beliefs?

 The golden rule?

Business Ethics

Ethics defined:

 “The principles of conduct governing an

individual or a group”

 “Study of morality”
Business Ethics

 Morality:
“Standards that an individual or a group has about
what is right and wrong, or good or evil”

 Moral Standards:
“The norms about the kinds of actions believed to
be morally right or wrong as well as the values
placed on the kinds of objects believed to be morally
good and morally bad”.
Business Ethics

 Ethics is the discipline that examines one’s moral

standards or the moral standards of the society

 If something is said to be ethical, this means it is of

an acceptable standard in terms of one’s personal
and social welfare

 Ethics are the standards of acceptable conduct by

which individuals choose to live their lives, and are
deeply interwoven in all cultures
Business Ethics

Where is the catch?

Business Ethics

Look Again….
Business Ethics

 Ethics is the discipline that examines one’s moral

standards or the moral standards of the society

 If something is said to be ethical, this means it is of

an acceptable standard in terms of one’s personal
and social welfare

 Ethics are the standards of acceptable conduct by

which individuals choose to live their lives, and are
deeply interwoven in all cultures
Business Ethics

What does this tell you?

Business Ethics

The dilemma ….

You are riding in a car driven by a close friend. He

hits a pedestrian. You know he was going at least 35
miles per hour in an area of the city where the
maximum allowed speed of 20 miles per hour.
There are no witnesses. His lawyer says if you
testify under oath that he was driving within speed
limit it may save him from serious consequences.

What would you do?

Business Ethics

Lets talk about

business ethics….
Business Ethics

How does the environment,

in which businesses,
operate look like?
Business Ethics

 Technological changes

 Legal, economic, social and political

pressures

 Competitors and stakeholders

Business Ethics

Political
Legal Technological

Economic

Industry/ Organization/ Job

Demographic social Government, Regulatory

Business Ethics

The rate of change and uncertainty:

 Corporate scandals, globalization, mergers,

global terrorism

Organizations must make moral decisions….

Why??
Business Ethics

What do organizations chose?

Ethics or profits?
Business Ethics

Giving back to society?

But why?
Business Ethics

Increased awareness of:

 Financial fraud
 Falsifying of organizational documents
 Deceptive advertising
 Defective products
 Bribery
 Employee theft
 And so on..
Business Ethics

 Reports of unethical behavior on the rise

 Society’s evaluation of right or wrong

 Individual ethics is not enough

 Studying business ethics helps identify ethical

issues and recognize approaches to resolve them

 You can better understand how to cope with

conflicts between your own personal values and the
organization in which you work
Business Ethics
Business Ethics

Linked to organizational
performance?
Business Ethics

Employee commitment
And trust

Investor loyalty
Ethical Climate and trust profits

Customer satisfaction
And trust
Business Ethics

 Customers, employees, and investors are

major concerns for firms that want to
develop loyalty and competitive advantage

 What else??
Business Ethics

Financial benefits
 Theft, stealing , lawsuits

Relationships, reputation, morale, productivity

 Deterioration of relationships, damage to reputation,
declining employee productivity, morale , creativity,
recruiting and retaining talent
Business Ethics

Employee commitment comes from employees who

believe their future is tied to that of the organization
and their willingness to make personal sacrifices for
the organization.

 The more dedication on the part of the company,

the greater the employee dedication.
 Concerns include a safe work environment,
competitive salaries and benefit packages, and
fulfillment of contractual obligations.
Business Ethics

Integrity/ Common Good

 Sense of “common purpose”

 “Engagement is higher at organizations where

employees feel they share the same values as their
employers”

Working for the best companies

Doing the right things, the right way..
Business Ethics

What does research say?

 Companies perceived by their employees as having a

high level of honesty and integrity are more profitable
than companies with a low level of honesty and integrity

 There is a strong relationship between ethical behavior

and customer satisfaction thus profits

 What do you think? ?

Business Ethics

Are we talking about

the “ideal world” here?
Business Ethics

Now See the other side of the

picture….
Business Ethics

“My job paid well, it was pleasant and challenging….

If I refused to take part in the fraud, I would have to
either resign or be fired. The report would be written
by someone anyway, but I would have the
satisfaction of knowing I had no part in the matter.
But bills aren't paid with personal satisfaction not
house payments with ethical principles. I made my
decision. The next morning I telephoned my
supervisor and told him I was ready to write report”
Business Ethics

The bad news

 Ethical misconduct on the rise Many employees do not report
what they observe
 The number of companies that are successful in incorporating
a strong enterprise wide ethical culture has declined since
2005

The good news

 Growing trend of initiating ethics and compliance programs
 Companies that are successful in incorporating a strong
enterprise wide ethical culture dramatically reduce mistrust