Introduction to Business Ethics

Instructor
Ms. Indra Mughal
 What are Business Ethics?

• Business ethics is the prescribed code of conduct for

businesses. It is a set of guidelines for dealing with
various procedures ethically.

• Business Ethics studies how to deal with corporate

governance, whistle blowing, corporate culture, and
corporate social responsibility. It emphasizes
standard principles prescribed by governing bodies.
Non-compliance with business ethics leads to
unnecessary legal action
 What are Business Ethics?

• Business ethics, therefore, educates businessmen and

employees about ethical procedures and penalties for
non-compliance.

• Business ethics ascertain social, cultural, legal, and

other economic limitations and safeguard the interest
of parties involved. Further, it emphasizes moral and
social values like consumer protection, welfare, fair
business practices, and service to society.
 What are Business Ethics?

• Ethics go beyond enforcement; they are to be

self-imposed and followed diligently.
• To uphold ethics, businesses must conduct 
internal audits and quality control checks at
regular intervals.
• Ethics vary from company to company.  
 Factors Influencing Business Ethics

• The application of ethics depends on the personal

values of the business owners.
• Managements choose leaders, ethics play a huge
role. These individuals represent the firm. 
• Industry-specific government guidelines for working
conditions, product safety, statutory warning, and
social responsibilities. 
• If Businesses fail to comply with societal norms, they
risk ruining brand image, reputation, and credibility.
 Principles of Business Ethics

Accountability
Care and Respect
Honesty
Compliance
Loyalty
Avoid Conflicts
Relevant Information
Law Abiding
Fulfilling Commitments
 Types of Business Ethics

• Corporate Responsibility: The organization works as a separate legal

entity with certain moral and ethical obligations. Such ethics
safeguard the interest of all the internal and external parties
associated with the firm. This includes the employees, customers,
and shareholders.  
• Social Responsibility: Making profits should not be at the cost of
society. Therefore, corporate social responsibilities (CSR) have been a
common practice where businesses work towards environmental
protection, social causes, and spreading awareness.
• Personal Responsibility: Employees are expected to act responsibly
with honesty, diligence, punctuality, and willingness to perform
excepted duties. Individuals should settle dues in time and avoid
criminal acts.
 Types of Business Ethics

• Technology Ethics: In the 21st century, companies have adopted

e-commerce practices. Technology ethics includes customer-
privacy, personal information, and intellectual property fair
practices.
• Fairness: Favouritism is highly unethical. Every individual
possesses certain personal bias. But at the workplace, personal
beliefs and biases should not affect decision-making. The firm
has to ensure fair chances of growth and promotion for all.
• Trustworthiness and Transparency: Businesses should maintain
transparency in business practices and financial reports.
 Challenges

• Educating employees on their ethical code of

conduct is a huge challenge.
• Lack of direct communication hampers the
enforcement of ethical policies.
• Moral compliance, bribes, sexual harassment,
and a toxic atmosphere are the common
challenges faced by firms.
 Conclusion
• Business ethics is the prescribed code of conduct for
businesses. It is a set of guidelines for dealing with various
procedures ethically.
• The discipline comprises corporate responsibility, personal
responsibility, social responsibility, loyalty, fairness,
respect, trustworthiness, and technology ethics. It
emphasizes sustainability, customer loyalty, brand image,
and employee retention.
• The motive is to prevent unethical business practices, both
deliberate and inadvertent. Businesses risk paying a
hidden cost—the loss of reputation.