NATURE OF

BUSINESS
2

What is business?

▸ Business may be defined as an activity

involving regular production or purchase of
goods and services for sale, transfer and
exchange with an object of earning profit.
3

NATURE OF BUSINESS

The nature of business is best understood on the basis of its

characteristics or features which are as follows:
▸ 1. Business is an economic activity
▸ 2. It includes the activities of production or purchase and distribution.
3. It deals in goods and services.
▸ 4. It implies regularity of transactions.
▸ 5. It aims at earning profits through the satisfaction of human wants.
6. It involves risk; it is not certain that adequate profit will be earned.
7. It creates utilities.
4

IMPORTANCE
OF
BUSINESS
5

IMPORTANCE OF BUSINESS

▸ Business improves the standard of living of the people

▸ It provides opportunities to work and earn a livelihood
▸ It utilizes the scarce resources of the nation and facilitates mass
production of goods and services.
▸ It improves national image by producing and exporting quality goods
and services to foreign countries
▸ It enables the people of a country to use quality goods of international
standard.
▸ It gives better return to the investors on their capital investment and
also provides opportunities to grow and expand the business.
6

IMPORTANCE OF BUSINESS

▸ It promotes social interest by providing tourist services, sponsoring

cultural programs, trade shows etc. in the country
▸ It also facilitates exchange of culture among the people of different
nations and thus, maintains international harmony and peace.
▸ It helps in the development of science and technology
7

OBJECTIVES
OF
BUSINESS
8

OBJECTIVES OF BUSINESS

▸ Economic objectives of a business refer to the objective of earning profit

and those which have a direct impact on the profit-earning objective of
business.
▸ Social objectives of business are those, which are desired to be achieved
for the benefit of the society.
▸ Human objectives of business primarily refer to the objectives aimed at
safeguarding the interest of its employees and their welfare.
▸ National objectives of business are the objectives of fulfilling the national
goal.
▸ Global objectives of business are the objectives of facing the challenges
of global market.
9

BUSINESS
ETHICS
10
WHAT IS BUSINESS ETHICS?

▸ Business ethics is “the degree of moral obligation

that may be ascribed to corporations beyond simple
obedience to the laws of the state” (Kilcullen and
Kooistra, 1999). It concernsbusiness situations,
activities, and decisions where the issue of right and
wrong are addressed.
11

WHAT IS BUSINESS ETHICS?

It is the study of proper business policies and practices

regarding potentially controversial issues, such as
corporate governance, insider trading, bribery,
discrimination, corporate social responsibility and
fiduciary responsibilities. Law often guides business
ethics, while other times business ethics provide a
basic framework that businesses may choose to follow
to gain public acceptance.
12

WHAT IS BUSINESS ETHICS?

It is also known as corporate ethics form of applied

ethics or professional ethics, that examines ethical
principles and moral or ethical problems that can
arise in a business environment. It applies to all
aspects of business conduct and is relevant to the
conduct of individuals and entire organizations.
13 Common unethical
issues
1.) Misusing company time
2.) Abusive behavior
3.)Bullying your co workers
4.) Theft
5.) Lying to your Employees
6.) Abusing your authority
7.) Breaking the rules or policy
14

RELATIONSHIP
BETWEEN
BUSINESS AND
ETHICS
15

Kinds of views of Ethics in Business

1. Unitarian View of Ethics

2. The Separatist View of Ethics
3. The integration View of Ethics
16

▸ Classical thinkers like Adam Smith were

opinion that the objective of any
business was to generate profit only and
business had no relationship with ethics.
▸ Later economist like Milton Friedman
and Talcott expressed views about the
relationship between Business and
Ethics.
 Unitarian
view of ethics
18

UNITARIAN VIEW

▸ If business wants to exist, survive and

flourish in the long run, morality, and
ethics cannot be separated from the
operations of business.
19

MORAL MORAL
STRUCTURE ETHICS

BUSINESS
Separatist
view of ethics
21

Separatist view of Ethics

22

Adam Smith
Theory:
“The Wealth of Nations”
“objective of any business
was to generate profits
only”
24

Milton Friedman
“Corporate Social
Responsibility”
 “ there is one and only one social
responsibility of business – to use its
resources and engage in activities to
increase its profit so long as it stays within
the rules of the game, which is to say,
engages in open and free competition
without deception and fraud "
Integration
view of ethics
27

Integration view of ethics

28

INTEGRATION VIEW

▸ Talcott Parsons proposed a view called the

integration view. He was of the opinion that ethical
behavior and business should be integrated in a
new era called “Business Ethics.”
▸ According to this view, Business and Morality are
interrelated and are guided by external factors like
Government, Market System, Law and Society.
29

Talcott Parsons
“ Ethical behavior and business
should be integrated or combined in a
new area called ‘Business Ethics’.”
31

Business Ethics

▸ the value of what should be done and what should

not be done from the business point of view
▸ At its most basic definition, business ethics revolves
around relationships. These relationships exist between
businesses and consumers on multiple social and
economic levels. Business ethics therefore, define the
relationship between an individual and a business, or
may apply to employees, various areas of government,
and the community
32

INTEGRATION VIEW

▸ According to this view, Business and

Morality are interrelated and are guided
by external factors like Government,
Market System, Law and Society.
33

IMPORTANCE
OF
BUSINESS
ETHICS
34

Ethical behavior and Corporate Social

Responsibility

Unethical Behavior or Lack of Social

Responsibility
35

Right and Wrong

Trusting Environment

Importance of Governance
36
TRIPLE BOTTOM LINE

PEOPLE

PLANET

PROFIT
37

ANTI- LIMITED SOURCES

CAPITALIST
STATEMENT
THE 4 MAJOR FACTORS

LONG TERM CONS AND RISK

GROWTH REDUCTION
38

▸ Ethics is important to business because

without it you will end hurting everybody.
▸ Ethics is important in business .It
produces role models.
▸ Ethics is important to business .It does
not lead to criminal charges and it
promotes good performance.
39

▸ Ethics is important in business because

if you have unethical behaviour or you
lack of social responsibility by
comparison may damage a firm’s
reputation and make it less appealing to
stakeholders. Profits could fall as a
result.
40

▸ Ethics is important to business because without

it there is no good governance and no trust .
▸ It protects and preserves the cridebility of the
said business and the company.
▸ The absence of ethics will surely lead to no
business at all despite the fact that there
were deals done before.
“
There’s no way to succeed in
business without the highest
ethical standards
~ Jordan Belfort
42

Thank You for listening!

43

REFERENCES

▸ http://download.nos.org/srsec319new/319EL1.pdf

▸ http://download.nos.org/srsec319/319-1.pdf

▸ https://l.facebook.com/l.php?u=https%3A%2F%2Fwww.youtube.com
%2Fwatch%3Fv%3DWwRgSjHsnnY&h=AT3rVbJ_gjOh9tF1svAVRVd
u-
mSdNGqjiyYM9tFkpEHrEVlGg2S3yCL0BFiO9yBADEXMmUTNmBFV
KRw1uoGoDXTgdCZBu6f3w-gqjQyUcwWbb-
upxxePsEVHDn2byDNejOTqRw
44

REFERENCES

▸ our corporate policies: https://goo.gl/QMccJ7

▸ How to Build an Ethical Culture: https://goo.gl/E5s4sD
▸ Complete Guide to Ethics Management: https://goo.gl/ors4K6
▸ How to Build an Ethical Business Culture:https://goo.gl/cUXA1S
▸ The Building Blocks of Business Ethics: https://goo.gl/to3yAN
▸ How to Build a Business Ethics Program: https://goo.gl/3kvDgL
▸ "Business Ethics (Stanford Encyclopedia of Philosophy)".
Plato.stanford.edu. 2008.
▸ C., Ferrell, O. Business ethics : ethical decision making and cases.
Fraedrich, John., Ferrell, Linda. (Eleventh edition ed.). Boston.2003