2. BUSINESS ETHICS AN
INTRODUCTION
◦ Moral principles that define right and wrong behavior in the world
of business
◦ Evaluation of business activities and behavior as right or wrong
◦ According to John Donaldson “ Systematic study of moral(ethical)
matters pertaining to business, industry or related activities
◦ “The principles and standards that define acceptable conduct in
business
3. Business ethics can be defined as written and unwritten codes of
principles and values that govern decisions and actions within a
company.
In the business world, the organization’s culture sets standards
for determining the difference between good and bad decision
making and behavior
4. 3 Models of Management Ethics
1.Moral Management—Conforms to high standards of
ethical behavior.
2. Immoral Management—A style devoid of ethical
principles and active opposition to what is ethical.
3. Amoral Management
Intentional - does not consider ethical factors
Unintentional - casual or careless about ethical
considerations in business
5. Warren Buffet’s rule of thumb for
ethical conduct…..
“…I want employees to ask themselves (when they are in doubt
about whether a particular conduct is ethical or not) whether they
are willing to have any contemplated act appear the next day on
the front page of their local paper – to be read by their spouses,
children and friends – with the reporting done by an informed and
critical reporter.”
[Berkshire Hathaway’s code of ethics]
6. CORPORATE ETHICS
SHORT-TERMISM VS. LONG-TERMISM
If businesses are focused on long term stability and growth, they are ethical:
Short term strategies, aimed at earning per share for the year in question,
compromise on longer interests
Capital market orientation of companies force them to be tempted by short term
targets:
Increasingly, the entire system of how companies are evaluated by analysts,
investors and stock markets leads to a short term approach
McKinsey survey shows that companies are focused on short term strategies
due to market pressures
7. GENERAL BUSINESS ETHICS
ETHICS OF HUMAN RESOURCE MANAGEMENT.
ETHICS OF SALES AND MARKETING.
ETHICS OF PRODUCTION
ETHICS OF INTELLECTUAL PROPERTY, KNOWLEDGE AND SKILLS
FINANCIAL ETHICS
8. SOURCES OF BUSINESS ETHICS
◦ PRIMARILY THREE SOURCES - CULTURE, RELIGION
AND LAWS OF THE STATE.
◦ IT IS FOR THIS REASON WE DO NOT HAVE UNIFORM
OR COMPLETELY SIMILAR STANDARDS ACROSS THE
GLOBE.
◦ THESE THREE FACTORS EXERT INFLUENCES TO
VARYING DEGREES ON HUMANS WHICH ULTIMATELY
GET REFLECTED IN THE ETHICS OF THE
9. IMPORTANCE OF BUSINESS ETHICS
Ethics influence and contribute to :
EMPLOYEE COMMITMENT
INVESTOR AND CUSTOMER LOYALITY
CUSTOMER SATISFACTION
ABILITY TO BUILD RELATIONSHIP WITH STAKEHOLDERS
GREATER EARNING
PUBLIC EXPECTS BUSINESS TO EXHIBIT HIGH LEVELS OF ETHICAL
PERFORMANCE AND SOCIAL RESPONSIBILITY.
10. ENCOURAGING BUSINESS FIRMS AND THEIR EMPLOYEES TO
BEHAVE ETHICALLY IS TO PREVENT HARM TO SOCIETY.
PROMOTING ETHICAL BEHAVIOR IS TO PROTECT BUSINESS
FROM ABUSE BY UNETHICAL EMPLOYEES OR UNETHICAL
COMPETITORS.
HIGH ETHICAL PERFORMANCE ALSO PROTECTS THE
INDIVIDUALS WHO WORK IN BUSINESS.
11. STAKEHOLDER VERSUS
SHAREHOLDER
◦ STAKEHOLDER PERSPECTIVE
Stakeholders may include:
employees, suppliers, customers,
competitors, government agencies,
the news media, community
residents and others.
The idea behind stakeholder based
ethical decision making is to make
sound business decisions that work
for the good of all affected parties
◦ SHAREHOLDER PERSPECTIVE
Those who approach ethical decision
making from a shareholder perspective
focus on making decisions that are in
the owners' best interest.
Decisions are guided by a need to
maximize return on investment for the
organization’s shareholders
12.
13. FACTORS INFLUENCING BUSINESS ETHICS
Formal and informal policies and rules
Corporate culture
Norms for acceptable behavior
Financial reward system
Hiring practices
Applications of legal behavior
Degree to which professionalism is emphasized
The company’s decision making processes
Existence and application of a written code of ethics
Behaviors and attitudes of the organization’s leaders
14. ETHICAL ISSUES CATEGORIES
◦ FAIRNESS AND HONESTY
The heart of business ethics General values of decision makers
◦ CONFLICT OF INTEREST
Occurs when a person must choose whether to advance their own personal
interest or those of others
◦ COMMUNICATIONS
False and misleading advertising and deceptive personal-selling tactics anger
customers and may cause a business to fail
◦ BUSINESS RELATIONSHIPS
Business people must be ethical toward their customers, suppliers, and others
in their workplace
15. SIX STEPS TO IMPROVE BUSINESS ETHICS
1.Top management support
2.Expectations begin at the top
3.Ethics imbedded in training
4.Ethics working environment
5.External stakeholders informed
6.There must be enforcement
16. A Junior member of staff has just returned to work after taking special leave to
care for her elderly mother. For financial reasons she needs to work full-time.
She has been having difficulties with her mother’s home care arrangements,
causing her to miss a number of team meetings (which usually take place at the
beginning of each day) and to leave work early. She is very competent in her
work but her absences are putting pressure on her and her overworked
colleagues. You are her manager, and you are aware that the flow of work
through the practice is coming under pressure. One of her male colleagues is
beginning to make comments such as “a woman’s place is in the home”, and is
undermining her at every opportunity, putting her under even greater stress.
Question:
How should you proceed so as not to discredit yourself,
your profession or the practice for which you work and at the same
time maintaining integrity and confidentiality in your actions? (200
Words)
CASE STUDY NO 1
18. Relationship between Ethics and Religion
Religion has profoundly affected human
conscious life and moral behavior for over two
thousand years.
To act immorally has been seen as essentially
disobeying God.
Religion has dominated the moral landscape to
appear to be indistinguishable from morality.
Most people identify morality with religion.
19. FACTORS TO BE CONSIDERED
1. Self-Control
2. Social Responsibility
3. Create a healthy competition
4. Able to state that right is right
5. Applying the concept of "sustainable development“
6. Consistent with the rules that have been agreed
7. Avoiding nature of (collusion, connection, and the
Commission)
22. ETHICS IN
HINDUISM
“Ete satpurushaah paraartha-ghatakaah
Svaartham parityajya ye
Saamaanyaa tu paraartham-udyata-bhritah
Svaartha-avirodhena ye /
Temee maanava-rakshsaah parahitam
Svaarthaaya nighnanti ye
Ye tu ghnanti nirararthakam parahitam
Te ke na jaaneemahe //”
—Bhatrihari’s NEETI-SHATAKA (verse 74)
Those are the noblest persons who, giving up self-interest, bring
about the good of others. Those that undertake a business for the
sake of others, not inconsistent with their own good, are the
common lot. Those who harm the welfare of others for their own
selfish interest, are demons in human form. We know not what to
call those who harm others’ welfare for no purpose at all.
23. ◦ The Foundation of Indian ethics, lies in the Vedas.
◦ FOUR VEDAS:
◦ 1. Rig veda
◦ 2. Yajur Veda
◦ 3.Sama Veda
4. Atharva Veda
RIGVEDA, composed some 2,500 years before Christ, had a concept of RITAM, or
cosmic order, by which both the physical and the social worlds were sustained.
◦ Ritam quickly developed in to the concept of satyam or truth, with strong ethical
implications.
The word, Satyam, occurs many times in Rigveda ‘God is the source of Truth’ (satya-
savam savitaaram—Rigveda V.82.7) (
RIGVEDA exhorts people—
‘speak truthfully, and act truthfully’ (satyam vadan satya karman, X.113.4, ibid.: 134).
It assures, ‘God escorts us on to the path of righteouness’ (VI.44.8; ibid.: 169).
There is ardent prayer to God to lead us along the path of righteouness (X.133.6).
The word Dharma, originated from Rigveda. It occurs there not once or twice but
many times, as Kane has observed (1990, vol. I: 1).
But it is used with different meanings in different contexts—moral ordinances, as
synonym for satyam, duties, and ritual obligations
The Vedas
24. UPANISHAD
S
◦ Upanishads gave greater priority to attaining spiritual and long-term
happiness, Shreyas, than to worldly or sensual pleasures which gave
only a momentary happiness, Preyas.
◦ Ignorance and delusion (Avidyaa) are very much looked down upon in
the Upanishads. They gave a higher priority also to study, meditation,
reflection, and debate, than to religious rituals.
◦ Ethics received more weightage than rites.
◦ Upanishads emphasize Ahimsa (non-violence) for the first time, which
was to become a major virtue in Indian religions later.
Chaandogya Upanishad (VIII.15) exhorts pupils to practise ahimsa with all
living beings (ahimsa sarva-bhootaani).
25. BHAGVAD
GITA
◦ In the Bhagavad Gita, Krishna advises Arjuna about
an ethical system that is applicable even now.
Krishna elaborates on character-building virtues and
how to avoid ethical failure.
EX: Gitopadesha
◦ The Bhagavad Gita describes three fold ethics
◦ karma yoga (work)
◦ Bhakti yoga (concentration)
◦ Jnana yoga (knowledge)
26. ◦ Virtues in the Bhagavad Gita, Krishna mentions qualities in business,
which are:
◦ to be peaceful,
◦ charitable,
◦ simple,
◦ clean,
◦ mild-mannered,
◦ magnanimous,
◦ saintly,
◦ equitable,
◦ truthful,
◦ obedient and merciful
◦ One should surrender the fruits of one’s actions to God and avoid
greediness.
◦ More ideal qualities include: to be determined, steady, concise, expert,
eloquent, friendly, compassionate, grave, humble, respectful and sober.
27. Bhartrihari’s Neeti-shataka and the ancient Tamil classic, The Kural, by Tiruvalluvar were
entirely didactic, but such texts on moral instruction alone were rare.
Hindu morality was administered by law codes (Dharmashastras), epics, and other popular
classics and oral traditions ,morals were already adequately secured in the Shastras, Rituals,
Dharmas. (Hindery 1978: 188)
Call for duty does not mean ignoring consequences.
Duties are evolved by taking into account consequences and for the long-term good of the
society as a whole, not ignoring long-term interests of individuals.
When in specific situations conflicts arise between the two, Hinduism has even tended to
favor Consequentialist approach, without diluting the emphasis on duty as a general
principle.
The moral path (dharma) was never to be abandoned.
Mahabharata also says the same thing: ‘One should not abandon dharma under the influence
of sensual desire, fear or greed.
Dharma is eternal, our pains and pleasures are only passing.’
For the sake of passing pleasures or pain, lasting values of dharma should not be ignored,
according to Mahabharata.
28. Key reasons why ethics plays a key
role in business in Hinduism
First, it is crucial that ethics have a considerable influence if we
want an efficient, smoothly operating economy. Ethics helps the
market to its best.
Second, the government, laws and lawyers cannot resolve certain
key problems of business and protect the society: ethics can.
Third, Ethical activity is valuable in itself, for its own sake, because
it enhances the quality of lives and the work we do-business has
an ethical responsibility for fairness for humanity.
30. INTRODUCTION
Islamic business ethics is a set of values about the good, bad, right,
wrong, and halal, haram in the business world based on the
principles of morality are in accordance with Shariah.
Islamic Ethics :
About Business In relation to the Islamic paradigm of business
ethics, the philosophical foundation that must be built in Muslim
personal is the conception of the relationship between humans
and their environment,
the human relationship with God, which in the language of the
religion known as (hablum minallah wa hablumminannas ).
Islamic business ethics based on Al-Qur’an and Hadits.
31. The principles of business ethics according to Al-Qur'an:
Prohibits business conducted by the evil (Surah 4:29).
The business must not contain elements of usury (Surah 2:275).
Business activities also have a social function either through
Zakat and alms (Surah 9:34).
The right to prohibit the reduction of an item or commodity that is
acquired or processed with medium dose or scales because it is a
form of tyranny (Surah 11:85).
Upholding the values of both economic and social balance, safety
and kindness and do not approve of the damage and injustice.
Prohibited businesses do wrong (cheating) either for himself or to
other businesses ( Surah 7:85 , QS.2 : 205
Business must not interfere with the activities of worship to God .
32. Paying employee wages before the sweat dried .
Not monopoly .
Should not be doing business in a state danger (
harm ) that can be harmful and damaging individual
and social life .
Commodity businesses that sell goods that are holy
and lawful.
Business done voluntarily , without coercion .
Gives grace period if the debtor ( creditor ) has not
been able to afford .
Conducted that business net of elements of usury
33. ◦Islamic Principles in Transactions
◦ ❋ Ensuring that one has a sincere intention, namely that the object of
transactions is to earn a living through lawful means in order to satisfy one’s
basic needs and thus to enable oneself better to worship Allah and to shun
the worship of wealth—which may otherwise have detrimental effects.
◦ ❋ Observing high morals in transactions, for doing so testifies to one’s true
worship of, and obedience and this will certainly help increase one’s
earnings.
◦ ❋ Choosing only lawful projects, even if the profits may be minimal.
◦ ❋ Choosing good partners and laborers on the basis of good moral conduct,
as this is bound to lead to success and help gain more profits.
◦ ❋ Giving the laborers their dues “before their sweat dries up” to motivate
them and to prompt them to work vigorously.
◦ ❋ Discharging one’s financial obligations to Allah, such as giving Zakahand
charity in order to purify one’s wealth and cause it to grow.
34. ❋ Discharging one’s duty towards society by paying the
required tax, which is a form of social responsibility.
❋ Solving disputes by reaching amicable settlement to be
supervised by righteous people.
❋ Retaining friendliness and love for Allah’s(God’s) sake in
case of the dissolution of a business partnership.
❋ Turning to Allah (God) in repentance and seeking His
forgiveness for the transactions that may have been conducted
contrary to the Islamic dictates.
Islamic Principles in Transactions
36. MORALITY
IN
CHRISTANIT
Y
◦ MORALITY AND CHRISTANITY
◦ Christian morality consists of living one’s life with guidance and
inspiration from the Christian scriptures and traditions.
◦ Christian ethics as an academic discipline uses the scriptures and
traditions in developing and critiquing ethical norms and theories
and applying them to ethical issues.
◦ Most Christian ethicists agree that the sources for doing ethics
include revelation (scripture) and tradition, as well as human reason
and experience.
◦ Thus one important question for a Christian ethicist is how morality
(the practice) or ethics (ideas about the practice) depends on religion
(convictions and commitments) or theology (critical discussion about
those convictions and commitments).
38. BASIC TENENTS OF BIBLE
◦ UNDERSTAND THAT GOD CALLED US TO WORK.
Genesis 2:15 - "The LORD God took the man and placed him in the Garden of Eden in
order to have him work it and guard it."
◦ WORK IN SUCH A WAY THAT GLORIFIES GOD
1 Corinthians 10:31 - "Therefore, whether you eat or drink, or whatever you do, do
everything for the glory of God."
Colossians 3:17 - "And whatever you do, whether by speech or action, do everything in
the name of the Lord Jesus, giving thanks to God the Father through him."
◦ WORK SO THAT YOU CAN SHARE WITH THOSE WHO NEED IT
Ephesians 4:28 - "The thief must no longer steal but must work hard and do what is good
with his own hands, so that he might earn something to give to the needy."
◦ BE FAITHFUL IN YOUR WORK SO THAT YOU CAN EARN RESPECT FROM OTHERS
1 Thessalonians 4:11-12 - "Also, make it your goal to live quietly, to mind your own
business, and to work with your own hands, as we instructed you, so that you may win
the respect of outsiders, and have need of nothing."
39. ◦ DO NOT BE LAZY OR CARELESS
Proverbs 6:6-11 - "Go to the ant, you lazy man! Observe its ways and become wise. It has
no commander, officer, or ruler, but prepares its provisions in the summer and gathers
its food in the harvest. How long will you lie down, lazy man? When will you get up from
your sleep? A little sleep, a little slumber, a little folding of the hands to rest, and your
poverty will come on you like a bandit and your desperation like an armed man."
Proverbs 10:5 - "Whoever harvests during summer acts wisely, but the son who sleeps
during harvest is disgraceful." Proverbs 15:19 - "The lifestyle of the lazy is like a thorny
hedge, but the path taken by the upright is an open highway."
◦ PROVIDE FOR YOURSELF AND FAMILY
1 Timothy 5:8 - "If anyone does not take care of his own relatives, especially his
immediate family, he has denied the faith and is worse than an unbeliever." Titus 3:14 -
"Our own people should also learn to make good deeds a priority when urgent needs
arise, so they won’t be unproductive.“
◦ THE DIVINE COMMAND THEORY OF ETHICS.” One version of this theory is to claim that
only God’s will makes things right or wrong; it is sometimes stated as “X is good (or
obligatory)” just means “God approves of (or demands) X.” Divine command theorists
admit that, of course, atheists and others can use moral ideas without realizing their
foundation; people can use a building, for example, without giving a thought to its
foundation. Only when they start questioning will they see a need for a foundation.
40. The strongest thing that any human being has going
for itself is its own integrity and it's own heart. ...