Business Ethics

Dr.P.G.Arul
Department of International Business
Pondicherry University
Pondicherry - 605014
“There is no agreement as to what
the term Business Ethics means”
Business Ethics
Societal Level

Stakeholders Level

Internal Policy Level

Personal Policy Level

Defining Ethics:
• SK Bhatia:
• “Ethics is said to be aggregate of moral
principles or sets of values about what the
conduct ought to be. Ethics give an idea what
is right or wrong, true or false, fair or unfair,
just or unjust, proper or improper”
• Eg. Honesty, obedience, equality, fairness,
truthfulness, etc and respect and then doing
right thing.
Defining Ethics:
• Manuel G.Velasquez: “Ethics is the discipline
that examines one’s moral standard or moral
standard of society”
• Carrol Buchholtz: “Ethics is that discipline
which deals with what is good and bad and
also deals with moral duty and obligation.
Ethics are set of moral principles or values”
Importance of Ethics
• Regulating human behaviour
• Help to improve image and goodwill
• Benefit in long run
• Promote balanced growth
Business & Ethics Relationship:

Environmental Hazards Economic Institution

Business and
Ethics Relationship

People Involvement Commercial Venture

Elements of Business Ethics:(E.Frederick)

Action
Consequences

Action itself

Principle of Action
Need of Ethics in Business:
• Fulfilling public expectation
• Preventing harm to others
• Improving business relation and employee
productivity
• Minimizing penalties
• Protecting business from others
• Protecting employees
• Promoting personal morality
Dimension of Business Ethics:

Relating to
Production

Business
Relating to Relating to
Ethics
conduct Employment
Dimension

Relating to
work
Factors Influencing Business Ethics:

Personal views
and values

Level of
Education
Social Values

Factors
Influencing
Business Ethics

Industrial Norms Legislation

Government
Regulation
Are Ethics apply to Individual or apply
to Corporation as well?
• Responsibility, obligation apply to individual the
same way it apply to corporation
• Corporation have objectives like an individual –
corporation is formed based on groups of
individuals
• Organization do not act on their own – It is acting
based on direction given by individuals
• Therefore the people responsible for taking
decision need to be morally responsible for any
immoral decision or action and not corporation.
Arguments against Business Ethics:

• No place for business ethics in perfectly

competitive market
• Business manager should single mindedly
pursue interest of their firms
• Obeying law is ethical
Benefits of managing ethics in the
organization (Carter McNamara ten Benefits)

1. Attention to business ethics has substantially

improved society
2. Ethics programme help to maintain a moral
course of turbulent times
3. Ethics programme cultivate strong team work
and productivity
4. Ethics programme support employees growth
and meaning
5. Ethical principles are often state-of-art legal
matters
Contd.,
6. Ethical programmes help to avoid criminal acts of
omission and can lower fines
7. Ethics programme help to manage values
associated with quality management, strategic
planning and diversity management
8.Ethics programme promote a strong public image
9.Overall benefits of ethics programmes
10. Formal attention to ethics in the work place is
the right thing to do.
Issues in corporate ethics:

• Equity – higher salary for directors

• Rights - hire and fire of employees
• Dignity – privacy-protection- harashment
• Honesty-misleading ad
Which ethical issues are most
important?
Shareholders Interest

Environmental issues

Safety and Security of Company Records

Product and work place safety

Employee health screening

Enforcing Code of Ethics:
(1) Global Ethical Code (2) Corporate Code of
Ethics & (3) Professional Code of Ethics:
• Ethic Committee
• Ethic hotlines
• Ethics Training Programme
• Ethic Audit
• Ethic Award
Issued Addressed in Ethical Code of Conducts
(by Ethical Resource Centre Washington)

• Conflict of interest
• Discrimination
• General conduct
• Employee theft
• Use of company assets
• Kick back, gifts, entertainment
• Sexual harassment
• Protecting company’s proprietary information
THANK YOU