10/19/2010

Clarifying Terms: Ethics, Business Ethics and Ethical

Standards
The Global Environment — Ethics
Chap 3: Ethics and Social Responsibility Ø is the study of morality and standards of conduct;
Ø concerned with what is right or wrong, and this implies
judgments about what is moral or immoral.
— Business ethics
are concerned with personal conduct perceived to be
right and moral by individuals within an enterprise
thereby taking into account the human welfare of those
affected by decisions and behaviors.
Chapter 3, Hodgetts, Luthans and Doh, International Management:
Culture, Strategy and Behavior , 6th edition (New York: McGraw-Hill — Ethical standards
Irwin, 2006) describe expectations for companies and individuals to
confirm to widely accepted codes of conduct.
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A Self Contract
— In every culture, an implied social contract exists
between business and society that permits companies to
pursue commercial interests within certain parameters of
conduct.

— The implied contract constitutes a set of expectations for

the role of corporation and its managers in a particular
society

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Continuum of Social
Corporate Social Responsibility
Responsiveness
Defined as
Ø“Actions of a firm to benefit society
beyond the requirements of law and the
direct interests of the firm”
Ø“ An organization’s obligations to conduct
business in such a way as to safeguard the
welfare of society while pursuing its own
interest”

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 10/19/2010

Corporate Social Responsibility

— Organizations are responsible for their
actions through the collective decisions,
policy, and conduct of managers who are
accountable for activities within the
context of their organization social and
ecological environments.
— A corporation is judged by the
responsiveness of its managers to meet
society’s expectations for its organizational
performance.
Prof Col (R) Manzoor I Awan
Corporate Governance
— Corporate governance is the set of
processes, customs, policies, laws and
institutions affecting the way a corporation
is directed, administered or controlled.
— Corporate governance also includes the
relationships among the many stakeholders
involved and the goals for which the
corporation is governed.
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Corporate Governance - Corporate Governance -

Stakeholders Stakeholders
— Shareholders — Customers — Shareholders — Customers
— Management — Banks and other — Management — Banks and other
— Board of lenders, regulators — Board of directors lenders, regulators
directors — Environment — Employees — Environment
— Employees — Community at — Suppliers — Community at large
— Suppliers large

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Impact of Corporate Governance

— The positive effect of good corporate

governance on different stakeholders
ultimately is a strengthened economy, and
— Hence good corporate governance is a tool
for socio-economic development.

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