Chapter 6

BUSINESS ETHICS
 Is based on the
personal values and
standards of each
person engaged in
business.
 Learning Objectives
1. Explain what business ethics is
2. Discuss the purposes of business ethics
3. Describe the scope and impact of business ethics on
a) the economy
b) society
c) environment
d) business managers
4. Explain the ethical challenges in today's world
PURPOSE OF
BUSINESS
ETHICS
 MAIN PURPOSE
To help business and would-be
business to determine what business
practices are right and what are wrong.
 SPECIAL
PURPOSE
1. To make businessmen realize that they
cannot employ double standards to the
actions of other people and to their own
actions.
2. To show businessmen that common
practices which they have thought to be right
because they see other businessmen doing it,
are really wrong.
3. To serve as a standard or ideal upon which
business conduct should be based.
SCOPE AND IMPACT
OF BUSINESS ETHICS
1. Economic impact
2. Social impact
3. Environmental impact
4. Impact on business managers
Economic impact
A business has an economic impact on society
through the wages it pays to its employees, the
materials that it buys from their suppliers and
the prices it charges its customers. It would have
a positive social impact on its employees if they
are paid fair living wages and benefits.
Social impact
The social impact of corporate governance
contributes to the ethical climate of society. If
businesses offer bribes to secure work or other
benefits, engage in accounting fraud or breach
regulatory and legal limitations on their
operations, the ethics of society suffer.
Environmental impact
Environmental protection is a key ares of business
influence on society. Businesses that implement
good environmental policies to use energy more
efficiently, reduce waste and in general lighten
their environmental footprint.can reduce their
internal costs and promote a positive image of
their company.
Impact on business managers
The concepts and principles for the ethical
conduct in business are relegated to the managers
of the business enterprise. Thus, although the
manager is expected to act in the best interest of
the business, he cannot be expected to act in a
manner that is contrary to the law or to his
conscience.
Ethical challenge in today's world
In an article, "Ethical Challenges in Today's
World" written by Ms. Mercedes B. Suleik
published in the Business Mirror on February
13, 2018 the author expressed her insights on
"Business Ethics" where an inherent conflict
between ethics and the pursuit of profit is more
pronounced.
"Humanity is experiencing a turning point in its history an can be seen
from the advances occurring in the sciences and technology. We are in
age of knowledge and information and that this has led to new and offen
anonymous kinds of power. We have today an economy of exclusion and
inequality"

"In a system that idolizes increased profit everything that stands in its
way is pushed aside. Behind this attitude Turks a rejection of ethics.
Ethics has come to be viewed with derision as being counterproductive.
Ethics is felt to be a threat because it condemns the manipulation and
debasement of the person and that ethics leads to a call for a committed
response, which is outside of the categories of the marketplace."