Faculty of Commerce

Business Ethics
Course Code (GEN122)
(ABA) Lecture (8)
First Grade (2024)

Dr. Samah Mohamed Ahmed Aiad

Lecturer in the Department of Business Administration
Organizational Ethics

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 Defining Organizational Ethics
we proposed business ethics as an area of study
separate from the general subject of ethics because of
two distinct issues:
1. Stakeholders have a vested interest in the
ethical performance of an organization.
2. In a work environment, the situation where
one’s personal value system may clash with the
ethical standards of the organization’s
operating culture.

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 Defining Organizational Ethics
How would you describe the culture of your company?
What “values, beliefs, and norms” do your employees
share?
• Organizational culture: Values, beliefs, and
norms that all the employees of that
organization share
• The culture represents the sum of all the policies
and procedures—both written and informal—
from each of the functional departments in the
organization in addition to the policies and
procedures that are established for the
organization as a whole.
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 Defining Organizational Ethics
• Value chain: Key functional inputs that an
organization provides in the transformation of raw
materials into a delivered product or service
Traditionally, these key functions are identified as:
1. Research and development (R&D)—develops and
creates new product designs.
2. Manufacturing—sources the components and
builds the product.
3. Marketing (and advertising).
4. Sales.
5. Customer service.
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 Defining Organizational Ethics
• Supporting each of these functional areas are the line
functions:
1. Human resources management (HRM), which coordinates the
recruitment, training, and development of personnel for all
aspects of the organization.
2. Finance, which can include internal accounting personnel,
external accounting personnel, and external auditors who are
called upon to certify the accuracy of a company’s financial
statements.
3. Information systems (IS or IT), which maintain the technology
backbone of the organization— data transfer and security, e-mail
communications, internal and external websites, as well as the
individual hardware and software needs that are specific to the
organization and its line of business.
4. Management, the supervisory role that oversees all operational
functions. 3-6
A Representative Company Value
Chain

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 Organizational Ethics
• Each of the functional line areas can represent a
significant commitment of resources—personnel,
money, and technology.

• From an ethical perspective, employees in each

area can face ethical challenges and dilemmas that
can be both unique to their departmental
responsibilities and common to the organization as
a whole

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 True / False Questions
1. An organization's operating culture is a sum of all the
policies and procedures, both written and informal. (TRUE)
2. The culture represents the sum of all the policies and
procedures from each of the functional departments in the
organization, in addition to the policies and procedures
that are established for the organization as a whole.
(TRUE)
3. Only shareholders have a vested interest in the ethical
performance of an organization.(FALSE) Other parties (the
stakeholders) have a vested interest in the ethical performance
of an organization.
4. A value chain is composed of the key functional inputs that
an organization provides in the transformation of raw
materials into a delivered product or service. (TRUE) 1-9
 True / False Questions
5. Organizational culture can be defined as the values,
beliefs, and norms shared by all the competitors and
employees of that organization.(FALSE) Organizational
culture can be defined as the values, beliefs, and norms shared
by all the employees of that organization.
6. Finance and marketing are key functions in a value
chain.(FALSE) Traditionally, these key functions are identified
as: Research and development (R&D), Manufacturing,
Marketing (and advertising), Sales, and Customer service.
7. Finance and marketing are line functions, supporting
each of the key functional areas. (TRUE)
8. Human resources management supports each of the
functional areas in a value chain. (TRUE)
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 Multiple Choice Questions
1. An organization's ______ consists of the values, beliefs, and
norms shared by all of the employees of that organization.
A. External culture.
B. Ethics.
C. Environmental ombudsman.
D. Culture.

2. The key functional inputs that an organization provides during

the transformation of raw materials into a delivered product or
service is referred to as a(n) ______.
A. Value chain.
B. Transformation process.
C. Organizational culture.
D. Operational ethics.

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 Multiple Choice Questions
3. A(n) _____ is composed of the key functional inputs that an
organization provides in the transformation of raw materials
into a delivered product or service.
A. Value chain.
B. Transformation process.
C. Organizational culture.
D. Operational ethics.

4. _______ can be defined as the values, beliefs, and norms shared

by all the competitors and employees of that organization.
A. Value chain.
B. Transformation process.
C. Organizational culture.
D. Operational ethics.

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 Multiple Choice Questions
5. The ______ represents the sum of all the policies and
procedures from each of the functional departments in the
organization, in addition to the policies and procedures that are
established for the organization as a whole.
A. Value chain.
B. Transformation process.
C. Culture.
D. Operational ethics.
6. From an ethical perspective, employees in each functional line
area face ethical challenges and dilemmas that ______.
A. Are common to the organization as a whole.
B. Are unique to their departmental responsibilities.
C. Are common to the industry.
D. Can be both unique to their departmental responsibilities and common
to the whole organization.
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 Multiple Choice Questions
7. All of the following are key functions of an organization except:
_______.
A. Sales.
B. Information systems.
C. Marketing.
D. R&D.
8. Which of the following serves as a support line function to key
functional areas in an organization's value chain?
A. Advertising.
B. Manufacturing.
C. Human resources management.
D. Customer service.

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