! { ST JOSEPH’S EVENING COLLEGE | BUSINESS ETHICS- (V SEMESTER -B.Com) | Lo Notes -) Meaning of Ethics Ethics is about moral choices. It is about the values that lie behind them, and the reasons people give for them. It is about innocence and guilt, right and wrong, and what it means to live a good or bad life. It is about the dilemmas of life, death, sex, violence and money. It explores human virtues and vices, rights and duties, The word Ethies originated from the Greek word ‘ethos’, meaning- character or manners. Ethics is the discipline dealing with what is good and bad, or right and wrong, or with moral duty and obligation, and what ought to be. Ethics could be considered as the source of character of a person expressed as right or wrong conduct or action, Ethics is related to moral questions. It is a study of morals and moral choices. It focuses on standards, rules and codes of conduct that govern the behaviour of individuals and groups. It deals with what is right, what is proper and what is just. Ethical rules are present in all societies, all organizations 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. But all people wherever they are, need rules to govern their conduct, rules that tell them whether their actions are right or wrong, moral or immoral, approved or disapproved. Ethics and actions Actions can be divided into three categories 1, Moral: if they reflect a person's values and those of saciety a Tmmoral” of they go against « person’s or society's values 3. Amoral: if they do not reflect choices based on values or social norms. ‘Morality and Ethics Every society has its set of moral rules or guidelines that set the boundaries of acceptable behaviour. Often these rules are about behaviour that might harm other people (killing, stealing), behaviour that is concerned with the well-being of others {helping those who are in need, responding to the suffering of others), or actions that touch on issues of respect for other persons (segregation, using other people for one’s own ends without concern for their welfare). Often the rules about such behaviour is expressed in statements about what you ought to do or should do. These rules fit together to form a moral code by which a society lives. Moral codes are seldom completely consistent. There are contradictions in moral rules. Sometimes our old moral rules do not cover new situations and we have to figure out how to cover new situations. (Right to privacy and access‘to computer date-on other people, spying on phone of politicians, euthanasia, abortion) Ethics is the conscious reflection on our moral beliefs with the aim of improving, extending, or reflecting those beliefs in some way.omer y Moral development of persons ‘There are three levels and six stages in the moral development of persons. Level 1: Pre-conventional Level (Self-Orientation) © Stage 1. :Punishment avoidance: avoiding punishment by not breaking rules, The person has little awareness of others’ needs. eward seeking: acting to receive rewards for oneself. The person has awareness of other's needs but not of right and wrong as abstract concepts. © Stage 2.: Level 2.: Conventional Level (Others Orientation) * Stage 3:Good person: acting ‘right’ to be a ‘good person’ and to be accepted by family and friends, not to fulfill any moral ideal. + Stage 4: Law and order: acting ‘right’ to comply with law and order and norms in societal institutions. Level 3: Post-conventional, Autonomous, or Principles Level (Universal, Humankind Orientation) * Stage 5: Social contract: acting ‘right’ to reach consensus by due process and agreement. The person is aware of relativity of values and tolerates differing views. © Stage 6: Universal ethical principles: acting ‘right’ according to universal, abstract principles of justice, rights. The person reasons and uses conscience and moral rules to guide actions. What is business? Economic activity or business, is any situation where people voluntarily enter into transactions of economic exchange of goods or services. These goods and services can be provided by three levels of society: the state, organizations of civil society, and individuals. ‘There are three broad dimensions of economic activity * The macro or systemic dimension: This business is determined at national level and international level as determined by the Government. * The messo or institutional dimension : This describes relations between economic organizations and others - between business and the state, organizations of civil society, or private individuals. “ + The miero or intra-organizational dimension: This concentrates on the economic actions and decisions of individuals within an organization. What is Business ethics? | Business Ethics are moral principals that define right and wrong behaviour in the world of business. It is the evaluation of business activities and behaviour as right and wrong. Business Ethics are the application of general ethical rules to business behaviour, They are concerned with moral issues in business just as medical ethics are concerned with morality of medical practices and policies, or political ethics are concerned with the morality of political affairs.BUSINESS ETHICS ORGANIZATION AND ETHICS Rational Organization Organization is a structure of a formal relationship designed to achieve some technical or economic goals with maximum efficiency Relationships — formal Hierarchies of authority identified in the organizational chart representing various official positions and lines of authority, Top Management Middle Layer Operating Layer Bottom Layer ~ Produce the essential output of the organization. Apex of pyramid ~ Top management In a rational organization ~ most of the information is collected from the operating layers using the various levels, through each of which the information reaches the top management levels. Top Management makes general policy decisions and issues general commands, pass it downward to the operating layer as detailed work instructions. From these two reciprocal flows there arises two moral obligations or ethical responsibilities. 1. The obligations of the employees 2. The obligations of the employer ‘The Employees Obligations to the Firm (Ethical) ‘The main moral duty of the employee is to work a) Towards the goal of the firm b) Toavoid any activities which might cause harm to these goals ©) Toobey organizational superior Unethical — Deviate from the above in order to serve one’s own interest. Illegal ways of serving one’s own interest in an organization is “White collar crime” The Employer’ ligatic Provide them with the compensation they have freely and knowingly agreed to receive, in exchange for their services Areas of conflicts of interest ‘An employee of a company is engaged in carrying out a task on behalf of the company and the employee has private interest in the out come of the task. Conflicts of Interests may be mostly financial ~ holding another job or consulting position in out side firm with which there own company deals or competes. Bribes Gifts Embezzlement Larceny Trade secrets