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Fig. 1.2 Understanding Ofbuslness Ethics: Concerned With
Fig. 1.2 Understanding Ofbuslness Ethics: Concerned With
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8 : Business Ethics
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1.7 Ethics In Business and reflecti,
a given situ
Allover the world. there is a growing realisation that ethics is point ofvie\
important for any business and to achieve the progress of any society. involves the
Ethics give rise to efficient economy. It is not the government or law all parties i
which will protect the society. But ethics alone can protect it. Ethics decision. or
are good in itself. Ethics and profits go together in the long run. An
ethically responsible company is one which has developed a culture of As an I
caring for people and environment, a culture which flows downwards. parties conI
insurance c
from the top managers and leaders. Ethics can be described as the
conscious appeal to norms and values to which. on reasonable grounds, excluded fre
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we hold ourselves obliged. as reciprocally. we hold others obliged to the basic moral
same norms and values, As a reflection, ethics are the methodical and
systematic elaboration of the norms and values we appeal to in our and reJect i
first.
daily activities. Where these activities are organised under business
issues, we face ethics in the practical and reflective variety of business The mt
ethics. three possi
has been id
On innumerable occasions. people in business are facing ethical
questions in which a balance has to be found between the different and argued pos!
the case. T:
often conflicting rights and interests of the parties involved. One may
even say that the weighing of rights and interests, at stake in joint effort
influence t]
determinat~ circumstances. constitutes the common domain of
business ethics. required.
Ethical rules are guides to moral behaviour. For example: All
1.9 Ob.
societies have ethical rules forbidding, lying. stealing. deceiving and
harming others, similar to the other ethical rules that approve of . The o~
honesty. keeping promises. helping others and respecting the right of
others. These are the basic rules of behaviour which are of much use
for the preservation and continuation of organised life.
Most of the people find major source of ethical guidance and moral
meaning in religious beliefs and organisations. The family institution
is equally important as it imparts a sense of right and wrong in children
when they grow up, as schools and other similar institutions like
cultural associations and television etc. The totality of these exposures
will create in them a concept of ethics. morality and socially desirable
behaviour.
Ethical rules are present in all societies. all organisations and all
individuals. though they may vary greatly from one to another. What is
considered ethical by one society may be forbidden by another society.
One particular religious notion of morality may differ with others. Still
ethics is a universal human trait. All people wherever they are. need (i) Tt
rules to govern their conduct. rules that tell them whether their actions ar
are right or wrong. moral or immoral. approved or disapproved. et:
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1.8 The Common Domain of Business Ethics.
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.' Majority of the business practition~rs and ethicists alike show a
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business.
. Business ethics can be, and has been, ethical and can still
make profits.
. More interests shown today in the application of ethical
practices in business dealings and the ethical implications.
. Profit maximisation and discharging of social responsibilities
at the maximum limit cannot be done simultaneously as they
are at opposite ends. (eg. concern for task I.e., productivity
and concern of workers).
. By introducting advanced technology to replace occupations
of ageold inhabitants is an ethical dilemma. Many managerial
decisions have ethical implications and these decisions give
rise to managerial dilemmas.
The nature of ethics is shown in fig. 1.4 which is self explanatory.
Introduction to Business Ethics: 11
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. Voluntary;not
forced or
. Deals with
human beings only
coerced by as they are en-
persons or dowed with freedom
circumstances. of choice and
m ,'r (example: means of tree will.
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Injuringor killing a person who . Human being can distinguish
:j!t has come to kill you Is not a between good and evil, right
I;.
:15 moralor legal offence; A cold
bloodedmurder is the highest
kind of moral or legal crime)
. and wrong, just and proper
Human being can distinguish
between the end he wishes to
ct pursue and the means to gain
~
. Judge the values
of thefacts In terms
ofanidealsituation.
. that end. .
Only human being does the
question of ethics, values and
. Conoernednot with moral conduct
faotualJudgements
but with judge- .
y A set of
mentsof 'what ought to be'
. EthicsIs concerned with Judgement systematic
of value or what ought to be; seeks knowledge about
e moral behaviour
to determinethe nature of the norm
a ideal or standrds and seeks to
enquire Into the fitness of human
Botlonsto this Ideal
.
and conduct
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A science a
field of social science
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12 : Business Ethics
n I. Genetic Inheritance
Steiner and Steiner identified . The qualities of goodness is
three primary categories of a product of genetic traits
codes strengthened over time "by
. Company codes the evolutinary process
. Company operating II. Religion
policies
. Codes of ethics . Religious morality Is clearly a
primary focus in shaping our
V. The legal system 41 societal ethics (through a
Law is an everchanging rule exemplified by the golden
approximatio~ of current rule and the ten
perception of right and wrong. commandments)
Laws represent a rough III. Philosophical Systems
approximation of society's
ethical standards . The quality of pleasure to be
derived from an act was the
IV.Codes of Conduct..- essential measure of its
. John Steiner refers to the goodness as per the
rules, customs and epicureans. The stoics like
standards transmitted the puritans and many
from generation to contemporary Americans
generation as guidelines advocated a discussed
for appropriate conduct. hardwoklng, thrifty life style.
Individual values are Suoh philosophies have been
shaped in large measure Instrumental In our society's
by the norms of the moral development
society.
.;"
18 : Business Ethics
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1.12 Six Primary sources of Ethics in the American
Business are
I
. The LegalSystem
. Religion
. Genetic Inheritance
. Philosophical Systems
. Code of Conduct
. Cultural Experience
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Example
. Too many changes in the work - you may not tell your assistant
all the changes.
. Professors may err in your favour in computing your grade.
. CEO may favour one of his assistants who is less experienced.
with only one time contact and on the impression he gets and
sends him abroad on an important assignment. neglecting
other experienced capable personnel.
Minor private decisions are unimportant. But decisions in small
matters tend to set a pattern for the more important ones you may
make as managers.
A multi-industry survey conducted at USA indicated that 40% of
the managers said that their superiors had at some time told them to
do certain things unethical. Despite the ambiguity. ethics appears to
be moving up in the corporate priority-list. Many of the companies have
introduced codes of ethics. Industry associations adopt such codes. then
recommend to members.
Refer figure 1.7. The sources of ethical guidance should lead to
our beliefs or convictions about what is right or wrong.. People have a
responsibility to avail themselves of these sources of ethical guidance.
Individuals should care about what is right and wrong and not just be
concerned with what is expedient. The strength of the relationship
should be between what is right and wrong and not just be concerned
with what is expedient. . .
The strength of the relationship between what an individual or an
organisation believes to be moral and correct and what available sources
of guidance suggest is morally correct is "Type I Ethics."
E.g.. A student copies in the examination. though every one
condemns this practice. This student is unethical. but perhaps only in
a type I sense (Here the student believes it is acceptable to copy another
student's paper in the examination).
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