Define business ethics
Why its important for business
What is an ethical business
Ethical challenges for business
Identifying ethical issues in business
Rationalization
1. Business ethics
Define business ethics
Why its important for business
What is an ethical business
Ethical challenges for business
Identifying ethical issues in business
Rationalization
2. BUSINESS ETHICS
How you define business ethics:
Business ethics are moral principles that guide the way a
business behaves. The same principles that determine an
individual’s actions also apply to business.
Its good for a company to act ethically:
It’s in a company’s best interest to act ethically. Trustworthy
companies are better able to attract and keep customers,
talented employees, and capital.
3. WHAT IS AN ETHICAL
BUSINESS
Ethical business must have following attributes:
• Ethical leadership
• Truthfulness
Obeying laws and regulations
Treating employees, customers, investors, and the public fairly
Compete fairly
Commitment to excellence
Priority must be given to your employer’s interest rather then your personal
interest. E.g. sales agent
Clear understanding about right and wrong actions
Accountability
Core values and principles
4. ETHICAL CHALLENGES FOR
BUSINESS
Businesspeople face two types of ethical challenges: ethical dilemmas and
ethical decisions
An ethical dilemma is a morally problematic situation in which you
must choose between two or more alternatives that aren’t equally
acceptable to different groups
5. Ethical decision
An ethical decision entails a “right-versus-wrong” decision
• If you’re presented with what appears to be an ethical decision,
asking yourself the following questions will improve your odds of
• 1. Is the action illegal?
• 2. Is it unfair to some parties?
• 3. If I take it, will I feel bad about it?
• 4. Will I be ashamed to tell my family, friends, coworkers, or
• boss about my action?
• making an ethical choice:
• 5. Would I want my decision written up in the local newspaper?
8. RATIONALIZATION
Rationalizations are fabricated (hence, false) justifications
we make to ourselves and others when we want to do or
have done something we know we shouldn’t. We go to all
the trouble to make up these stories because we care
what others think of us and, more important, we want to
think well of ourselves.
9. Common justifications for
rationalization
My behavior isn’t really illegal or immoral no
clear evidence that the action is wrong.
My action is in everyone’s best interests.
No one will find out what I’ve done.
The company will condone my action and
protect me
Everybody does it
I’m only human
It’s a stupid rule
10. Corporate social responsibility
Corporate Social responsibility refers to the approach
that an organization takes in balancing its
toward different stakeholders when making legal,
economic, ethical, and social decisions.
An organization’s obligations to maximize its long term
positive impacts and minimize its negative impacts on
society
11. Broad categorization of CSR
Social responsibility towards employees
• Health and Safety
• Freedom from sexual harassment
• Equal Opportunity and Diversity
Equal Pay and the Wage Gap: equal pay for both men and
women in jobs that entail equal skill, equal effort, equal
responsibility, or similar working conditions.
Building Diverse Workforces the workforce according to sex,
race, or some other characteristic. In helping to build more
diverse workforces
Wages and Benefits Businesses should pay appropriate
wages and benefits, treat all workers fairly, and provide
equal opportunities for all employees.
12. CSR towards customers
The purpose of any business is to satisfy
customers, who reward businesses by buying
their products. Sellers are also responsible—
both ethically and legally—for treating
customers fairly.
The right to safe products.
The right to be informed about a product,
The right to choose what to buy.
The right to be heard.
13. CSR towards communities
Areas in which corporate social objectives may be found
The environment – preventing damage
Energy – increasing energy efficiency in
business operations
Community involvement – involved in
community, education, health projects
14. Advantages of social involvement of
business
Creation of a better social environment benefit both
society and business
Power should be used responsibly
Social involvement creates a favorable image
Business has the resources to help solve social problems
Business and society are interdependent
Social involvement discourages additional government
intervention
15. Argument against social involvement
The primary task of business is to maximize profit
Social involvement results in higher prices
Social involvement reduces economic efficiency
Business people lack the social skills to deal with the
problems of society