THE IMPORTANCE OF BUSINESS

ETHICS
GROUP-1

ABHILASH BAJPAYEE

ANNIE JIM

HARSHDEEP SINGH

MONJIT CHETRY

RISHAV BARMAN

SHIVANSH TANDON

UTKARSH SINHA
DEFINITION

Business Ethics comprises organizational principles, Business Ethics

values, and norms that may originate from individuals,
organizational statements, or from the legal system that
primarily guide individual and group behavior in business. Principals Values Norms

Principals are specific pervasive Values are enduring beliefs Norms are shared rules and
boundaries for behavior that and ideals that are socially expectations that govern
should not be violated. They enforced: Teamwork, social behavior and guide
Often become basis for rules. Trust & Integrity. interactions within a group.
 MORAL & VALUE DILEMMA
▪ Employees many times find themselves in a decision making
situation where they have multiple options,
▪ But, none of the available options are acceptable in an
absolute sense, i.e. morally conflicting choices
▪ One example of a moral dilemma in business ethics is the
decision to prioritize profits over social or environmental
responsibility
Moral
Dilemma
Value
Dilemma
▪ Value dilemma is when employees find themselves in a
decision making situation where the available choices
conflict with their core values
▪ For example, managers face a value dilemma between
prioritizing employee well-being and ensuring productivity
on a challenging project
DEVELOPMENT OF BUSINESS ETHICS

• Rise of Social Issues in Business – 1960s 1970s 1980s 1990s 2000s

1960s Consumer’s Bill of Rights Environmental Employee Bribes and Sweatshops and unsafe Cybercrime
Issues Militancy Illegal working conditions in
• Business Ethics as an emerging field – contracting third-world countries
practices
1970s Corporate Social Responsibility
Civil Rights Issues Human Rights Influence Rising Corporate liability Financial
Issues Peddling for personal damages (eg. misconduct
• Business Ethics reaches maturity – Cigarette companies)
1980s Defence Industry Initiative Increased Covering up Deceptive Financial mismanagement Global issues,
Employee-Employ rather than advertising and fraud product safety &
• Institutionalization of Business Ethics er tension correcting issues bribery
– Federal sentencing guidelines for
1990s organizations (FSGO) Changing work Disadvantaged Financial fraud Organizational ethical Sustainability
ethic customers (eg. savings and misconduct
• Twenty first century of Business loan scandal)
Ethics – Sarbanes Oxley Act | Dodd Frank Rising drug use Transparency Intellectual
2000s Reforms issues property theft
Timeline of Ethical & Socially Responsible Concerns (In 5 stages)
 GLOBAL ETHICAL CULTURE – GLOBAL COMPACT
▪ An ethical culture is defined as appropriate behavior
according to company and industry standards, aiming to
minimize the need for strict enforcement by fostering
ethical reasoning.
▪ To foster better ethical cultures, businesses establish ethics
programs and appoint ethics officers, with top management
playing a crucial role in ethical leadership.
▪ The Global Compact, launched by the United Nations, is a
set of 10 principles that aim to promote global ethical
behavior. It focuses on human rights, labor, the
environment, and anti-corruption.
▪ The purpose of the Global Compact is to foster openness
and alignment among businesses, governments, society,
labor, and the United Nations.
▪ The Global Compact encourages companies to
collaborate and partner with others to advance the
broader objectives of the United Nations.
 ETHICS AND EMPLOYEE COMMITMENT

A strong ethical culture and employee well-being foster loyalty, commitment, and
performance within organizations, leading to increased productivity, teamwork, and
employee retention.

The Role of
Organizational Ethics
in Performance:
 CONTRIBUTION OF ETHICS

INVESTOR LOYALTY
▪ Investors recognize that an ethical culture provides a
foundation for efficiency, productivity and profits.
▪ Negative publicity, lawsuits and fines can lower stock prices,
PROFITS
diminish customer loyalty and threaten a company’s
long-term viability. ▪ Businesses with greater resources (profits) have the means to
be ethical and practice social responsibility while serving the
customers, valuing their employees and contributing to
society.
CUSTOMER SATISFACTION ▪ Ethical conduct towards customers builds a strong
▪ The perceived ethicality of a firm is positively related to competitive position that positively affects business
brand trust, emotional identification with the brand, and performance and product innovation.
brand loyalty.
▪ An ethical culture that focuses on customers incorporates
the interest of all employees, suppliers, and other
important decision-makers.
 AN ETHICAL DILEMMA (SOPHIE’S CHOICE)

Sophie is a Sales trainee under Emma, who revealed the challenges of accurately filling out
expense vouchers due to the lack of appropriate categories for tipping and other expenses.
Emma shared her strategy of padding her expense account and using blank receipts from
cab drivers. Sophie expressed concern about going against company policy, but Emma
assured her that many employees engaged in this practice. Emma also recounted a situation
where an employee who reported discrepancies was investigated and eventually left the
industry, emphasizing the small world and consequences for whistleblowers. Sophie also
learned about the vice president's acknowledgement of the issue but no significant action
was taken. This left her uncertain about how to handle her own expense report.
 RESOLVING ETHICAL BUSINESS CHALLENGES
(ABUSE OF POWER)

Lael, a recent hire in Best East Motels' manager training program, initially found her job
promising. However, she started hearing rumors about inappropriate behavior by Nikhil,
the son of the motel chain's owner and her mentor. Investigating further, Lael discovered
that several female employees had experienced suggestive comments, gestures, and
unwanted advances from Nikhil during night shifts. Former employees confirmed these
allegations, but most were hesitant to report them due to fear of retaliation and job loss.
Lael realized that the behavior constituted sexual harassment, as outlined in the franchise
employee handbook. She then contemplates the best course of action, considering the
potential impact on the employees, the motel's reputation, and her own involvement.