SESSION 01-

INTRODUCTION AND
OVERVIEW OF BUSINESS
ETHICS
ETHICS, MORALITY AND
SOCIETAL FRAMEWORK
 COURSE APPROACH
Action Approach Action Approach
Learning@Class Presentation, Scenario Discussion
Assessment Attendance (5 marks)
(Internal)
Case Studies & Videos

Learning@Outside Textbook (Ethics in Business and Team Presentation (5 marks)

Class Corporate Governance-S K Mandal,
Tata McGraw Hill , Education Pvt.
Ltd., 2nd Reprint ,2012) Written Test (10 marks)

Assessment Written Test (30 marks)

Additional Resources (As suggested (External)
in class)
ETHICS

• Ethics is the study of How

people should ACT.
• Ethics also refers to the
values and beliefs related to
the nature of human conduct
( Based on ethical standards and
moral orientation)
 Rules and
Regulations

Rules of
Values
Conduct

Ethics

Ethical
Research
Practices

Moral
Principles
CASE STUDY- GOVERNMENT AND BUSINESS IN
CHINA
• C:\Users\User\Desktop\What are ethics- Case study.pdf
WHAT ARE ETHICS ??

• Ethics are Standards

• Ethics are ‘Application Oriented’
• Ethics are Changeable ( Because of Focus, Experience, Debate)
HOW ETHICS CHANGE?
• Change in Reasoning
• Change within person ( with maturity)
• Social Situation
TYPE OF ETHICS

01 02 03 04
DESCRIPTIVE NORMATIVE/ META ETHICS ( APPLIED ETHICS
ETHICS ( what PERSPECTIVE What does (How can we put
people think is ETHICS ( How RIGHT even this knowledge
RIGHT) should people mean) into action)
ACT) recommend
BUSINESS ETHICS
Business Ethics
The set of moral rules that govern how
businesses operate, how business
decisions are made and how people are
Treated.
 Misleading advertising

Misleading labeling
UNETHICAL AND
OFTEN ILLEGAL
PRACTICES Poor product or service safety

Harming the environment

……………..
 Easier change management

Strong team work and productivity

BENEFITS OF Enhanced Employee growth

FOLLOWING
BUSINESS Guarantee that personnel policies are legal
ETHICS
Helps to detect violations easily

Helps to manage values associated with quality

management, strategic planning
VIDEO

Are the Ethics FADING these days????

https://www.bing.com/videos/search?q=ethics+video+for+mba+students&&view=detail&mid=AF38AD1367B5CD4
9A009AF38AD1367B5CD49A009&&FORM=VRDGAR
MORALS
BASED ON FAITH, BELIEF SYSTEM
AND SOCIETY EFFECTS ARE
MORALS OF A PERSON.
CRITICAL PRINCIPLES (MORAL THEORIES)

• End Based Ethics (Utilitarian Theory)-Action is taken only when it produces

positive results for larger number of people. (also called- Consequentialism or
Utilitarianism).

• Theory of Justice- Actions are guided by fairness, equity and impartiality.

Example…..
• Theory of Rights and Duties- Actions should be based on certain given rights of
ethics. (Legal Rights & Moral Rights)
• Ethics of Care -Golden rule-action is based on care and compassion. Example…
Utilitarianism
• an ethics of consequences
• an action is good if it produces the greatest good for the greatest number

Business perspective:
• Any action or policy should be evaluated on the basis of benefits and costs it will impose on
the society
• Any plans, programmes or actions of the organization should be chosen to produce the
greatest net benefits for the largest number of people associated with the business –which
includes society
• The net benefits should also take into consideration environment and social factors besides
economical (SROI- Social Returns on Investment)

Business Ethics & Corporate Governance 15

Rights Approach
• individual's right to choose for herself or himself

Business perspective:
• Right for fair wages
• Right for safe working environment
• Right for working as per job description agreement
• Consumer Rights
• Right To Information (RTI)

Business Ethics & Corporate Governance 16

Fairness or Justice Approach
• actions are guided by fairness, equity and impartiality

Business perspective:
• No religion discrimination while hiring
• No situation of “women facing glass ceiling” while promoting
• No favoritism to preferred (e.g. relative) bidder during tender evaluation

Business Ethics & Corporate Governance 17

Ethics of Care.
• society comprising individuals whose own good is linked to the good of the community
• Community members are bound by the pursuit of common values and goals

Business perspective:
• Environment and Sustainability Policy (GRI)
• New CSR Act

Business Ethics & Corporate Governance 18

Standards Observed In Business Unit

Moral Honesty Integrity Values

Standards

Ethical Transparency Accountability Commitment

Standards

Legality Humanity Discipline

Legal
Standards non-discrimination, equal opportunity
DIFFERENCE BETWEEN MORALITY AND ETHICS

 Morality refers to adhering to certain moral standards or conduct of behaviour

established in a society for good, harmonious and fair living

vs. Ethics refer to goodness, rightness and fairness of such standards and conduct
exhibited by an organization or people running organizations
 Morality and moral standards refer to individuals / people (irrespective of

independent entity or business) for their goodness, rightness or fairness of their

decisions and actions
vs. Ethics and ethical standards refer to business, professions, institutions, associations for their
goodness, rightness or fairness of their decisions and actions
MORAL REASONING
 The reasoning process by which human behaviours, institutions, or policies are judged to be in accordance
with or in violation of moral standards

Moral reasoning involves:

– The moral standards by which we evaluate things
– Information about what is being evaluated
– A moral judgment about what is being evaluated

Steps:
1. Identifying what constitutes “moral standards”
2. Examining facts and figures concerning the policy, behaviour and actions under the specific situation
3. Arriving at a moral judgment on the basis of rightness or wrongness of policy, behaviour or actions
First Level: Second Level: Third Level:
Pre-conventional Conventional Post- KOHLBERG’S
Stages (Childhood) Stages conventional
Stages THREE LEVELS
– Stage One: – Stage One:
(Principled)
– Stage One:
OF MORAL
punishment Interpersonal social contract DEVELOPMENT
and obedience Concordance orientation
orientation – Stage Two: – Stage Two:
– Stage Two: law and order universal
instrument and orientation principles
relativity orientation
orientation
THE RELATIONSHIP BETWEEN MORALITY, ETHICS,
AND ETHICAL THEORY

Morality Ethics Ethical Theory

Potential Solutions
to ethical problems
• Ethics rationalises • To Produce • That can be
morality…. ethical theory applied to a
situation