MBA SEM-1

SUBJECT:PRINCIPLE
S OF MANAGEMENT
 MEANING OF MANAGEMENT

Management is the art of getting things or

works done by a group of no. of people with
the effective utilization of available
resources.
These resources may be in the forms of men,
money, materials & machines. Two or more
persons form the body of managing any
organization, which perform jointly various
functions in order to achieve the common
objectives of the business organization.
Based on above discussion and definitions given by many
authors, we may summarize :
1). Management is a set of activities,
2). Management is performed by group of people,
3). This set of activities is executed by inputting various
resources like men, money, materials, machines,
technologies and many more,
4). Management serves the achievement of common and
specified goals of the group of people,
5). Management is a dynamic process of understanding
various functions like Planning, Organizing, Staffing,
Directing, Co-ordinating, Reporting, Budgeting and many
more.
 DEFINITIONS
Peter F. Drucker defines it as “Management is an organ;
organs can be defined and described only through their
functions.”
According to Terry, “Management is not people, it is an
activity like walking, reading, swimming or playing. People
who perform management can be designated as managers,
members of management or executive leaders.”
Henry Feyol defines as, “To manage is to forecast and plan,
to organize, to compound, to coordinate and to control.”
William Spriegal defines ”Management as the functions of an
enterprise which concerns itself with direction and control of various
activities to attain business objectives. Management is essentially an
executive function; it deals with the active direction of the human
efforts.”
F. W. Taylor defines, “Management is the art of knowing what you
want to do and then seeing that it is done in the best and cheapest
way.”
Koontz and O’Donnell defines, “Management is the creation of and
maintenance of an internal environment in an enterprise where
individuals, working in group, can perform efficiently & effectively
towards the attainment of group goals. It is the art of getting the work
done through and with people in formally organized group.”
 IMPORTANCE OF MANAGEMENT
(1). ACCOMPLISHMENT OF COMMON GOALS
 As discussed earlier, an organization has predetermined specific goals or
objectives.
 The execution of various functions to achieve such goals also leads to establish
the common objectives among those persons executing these functions.
 Management provides an environment to accomplish such common goals by
three factors asunder.
(i). Proper planning and availability of required resources.
(ii).Trying to adjust the business activities to the surrounding external
environment.
(iii).Effective decision making process and controlling activities of business
enterprise.
(2). EFFECTIVE UTILIZATION OF RESOURCES
 Management has to control 6 Ms to be considered as
resources wise Men, Machines, Money, Materials, Methods and
Markets.
 Management tries to utilize all these resources in very
effective and efficient way.
 Management decides and takes actions to arrange & utilize
very appropriate alternative of each of these resources.
3).MANAGEMENT INTEGRATES VARIOUS
INTEREST GROUPS
 Each person in an organization has his personal interest
of working in that organization.
 But the organization has its own set of objectives.
 Management takes initiatives to integrate various
interests of all individuals working in a group to achieve
organizations common objectives.
(4). EFFECTIVE FUNCTIONING OF ORGANIZATION
 Ability, experience, mutual understanding, co-ordination,
motivation and supervision are some of the factors responsible for
some of the effective functioning of business activities of an
organization.
 Management ensures that the skills of managers and abilities of
workers are effectively used and co-operation is obtained with the
help of mutual understanding.
 Thus effective functioning of an organization is possible only
with the efficient management.
5). STRUCTURING THE ORGANIZATION
 Management segregates different activities and tasks to be
performed by different skills level of people.
Management determines and assigns various responsibilities
to perform these tasks separately but in such an established
channel so that entire group of people is included.
 Thus, sound organization structure clearly defines the
authorities and responsibilities to be distributed and assigned
among such group of people in an organization.
(6). INCORPORATING INNOVATION
In the competitive phenomenon of changing technologies and
social structure, management develops new ideas.
 Such new ideas require to be incorporated to keep the
organization alive and efficiently operating its business activities.
 Management achieves better performance by incorporating new
ideas and innovation and that is how management is also called as
dynamic.
 Objectives of management
• To achieve goal of organization
• Promote effectiveness
• Develop the ability of managers
• Human welfare
• Social welfare
• Interaction with environment
 Features of management
 Management is an activity
 Management is a process
 It is required for every type of organization
 Management is required at all levels of organization
 Management is goal oriented
 Management is intangible
 Management is dynamic
 Management is discipline
 Management as an activity

• Interpersonal role
• Informational role
• Decisional role
 Interpersonal Roles
• Figurehead – includes symbolic duties
which are legal or social in nature.
• Leader – includes all aspects of being a
good leader. This involves building a team,
coaching the members, motivating them,
and developing strong relationships.
• Liaison – includes developing and
maintaining a network outside the office for
information and assistance.
 Informational Roles
• Monitor – includes seeking information regarding the
issues that are affecting the organization. Also, this
includes internal as well as external information.
• Disseminator – On receiving any important
information from internal or external sources, the
same needs to be disseminated or transmitted within
the organization.
• Spokesperson – includes representing the
organization and providing information about the
organization to outsiders.
•
 Decisional Roles
• Entrepreneur – involves all aspects associated with
acting as an initiator, designer, and also an
encourager of innovation and change.
• Disturbance handler – taking corrective action when
the organization faces unexpected difficulties which
are important in nature.
• Resource Allocator – being responsible for the
optimum allocation of resources like time, equipment,
funds, and also human resources, etc.
• Negotiator – includes representing the organization
in negotiations which affect the manager’s scope of
responsibility.
 Levels of management

The term ‘levels of management’ refers to a line of demarcation

between various managerial positions. In a large organization,
three levels of management are usually identified:

(i) Top level management

(ii) Middle level management and

(iii) Lower level management.

 Levels of management: Difference
Point of Distinction Top Level Middle Level Lower Level
Management Management Management

Action focus A small group of policy Act as a connecting link These managers are in
makers deciding the between top and lower direct contact with
destiny of an level people and manage employees.
organization. activities of other
managers.

Representation Chief Executive Officer, Functional Heads Section Head,

President, Chairman, (Marketing Manager, Supervisor, First-Line
Managing Director, bod Personnel Manager, etc.) manager, etc.
etc. and immediate
subordinates.

Nature of work They generally spend Middle managers, Generally physically

most of their time with compared to supervisors, active, experience
peers, outsiders and to are far less physically frequent interruption,
a lesser extent, active and far more often shift back and
subordinates. A top involved in paper work forth between tasks and
manager’s schedule is and meetings. Their job is spend most of their
typically hectic. less hectic, more time with subordinates
reflective and more and peers caring for
frustrating. monetary problems.
Time Spent in Carrying Out
Managerial Functions
 Managerial skills

Managerial skills are what the manager uses to assist the

organization in accomplishing its goals. Specifically, a manager will
make use of his or her own abilities, knowledge base, experiences,
and perspectives to increase the productivity of those with whom they
manage. In order to be effective, a manager must possess and
continuously develop several essential skills. Basic types of skills
which are needed by all managers–

 Technical skill

 Human skill

 Conceptual skill
 Technical skills
Technical skills are those skills needed to
accomplish a specific task. It is the ‘know how' skill
set that allows a manager to complete his or her
job. These skills are the combination of formal
education, training, and on-the-job experience.
Most employees expect their managers to have a
technical skill set above their own so that, when
needed, an employee can come to their manager
to find out how to do something specific to their
individual job.
 Human skills
These interpersonal skills are what a manager will use to
work with his or her employees. Some people are born with
good human skills; others must work much harder at it.
Human skills are critical for all managers because they
work with people. Managers with good human skills
understand their role inside the manager/employee
relationship and how important things, like trust, cohesion,
fairness, empathy, and good will, are to the overall success
of the organization. Human skills help the manager to
communicate, lead, and motivate an employee to work
towards a higher level of productivity.
 Conceptual skills
• The ability to identify and solve problems is also
an example of conceptual skills. Conceptual
management skills require the ability to make
quick decisions, where required. Some types of
problem-solving skills include decision-making,
critical thinking, logical thinking, multitasking,
and troubleshooting.
Skills and Management Levels
 Functions of Management

Planning

Organizing

Staffing

Directing

coordinating

Controlling
 Planning stage

Planning is the primary function of management. It

involves determination of a course of action to achieve
desired results/objectives. Planning is the starting point of
management process and all other functions of
management are related to and dependent on planning
function. Planning is the key to success, stability and
prosperity in business. It acts as a tool for solving the
problems of a business unit. Planning plays a pivotal role in
business management It helps to visualize the future
problems and keeps management ready with possible
solutions.
 Organizing
Organising is next to planning. It means to bring the resources
(men, materials, machines, etc.) together and use them
properly for achieving the objectives. Organisation is a process
as well as it is a structure. Organising means arranging ways
and means for the execution of a business plan. It provides
suitable administrative structure and facilitates execution of
proposed plan. Organising involves different aspects such as
departmentation, span of control, delegation of authority,
establishment of superior-subordinate relationship and
provision of mechanism for co-ordination of various business
activities
 Staffing
Staffing refers to manpower required for the execution of a
business plan. Staffing, as managerial function, involves
recruitment, selection, appraisal, remuneration and
development of managerial personnel. The need of staffing
arises in the initial period and also from time to time for
replacement and also along with the expansion and
diversification of business activities. Every business unit
needs efficient, stable and cooperative staff for the
management of business activities. Manpower is the most
important asset of a business unit. In many organisations,
manpower planning and development activities are
entrusted to personnel manager or HRD manager. 'Right
man for the right job' is the basic principle in staffing
 Directing
Directing as a managerial function, deals with guiding
and instructing people to do the work in the right
manner. Directing/leading is the responsibility of
managers at all levels. They have to work as leaders of
their subordinates. Clear plans and sound organisation
set the stage but it requires a manager to direct and
lead his men for achieving the objectives. Directing
function is quite comprehensive. It involves Directing as
well as raising the morale of subordinates. It also
involves communicating, leading and motivating.
Leadership is essential on the part of managers for
achieving organisational objectives.
 Coordination
Effective coordination and also integration of activities of
different departments are essential for orderly working of
an Organisation. This suggests the importance of
coordinating as management function. A manager must
coordinate the work for which he is accountable. Co-
ordination is rightly treated as the essence of
management. It may be treated as an independent
function or as a part of organisation function.
Coordination is essential at all levels of management. It
gives one clear-cut direction to the activities of
individuals and departments. It also avoids misdirection
and wastages and brings unity of action in the
Organisation. Co-ordination will not come automatically
or on its own Special efforts are necessary on the part of
managers to achieve such coordinatiuon
 Controlling
Controlling is an important function of management. It is
necessary in the case of individuals and departments so as
to avoid wrong actions and activities. Controlling involves
three broad aspects: (a) establishing standards of
performance, (b) measuring work in progress and
interpreting results achieved, and (c) taking corrective
actions, if required. Business plans do not give positive
results automatically. Managers have to exercise effective
control in order to bring success to a business plan. Control
is closely linked with other managerial functions. It is rightly
treated as the soul of management process. It is true that
without planning there will be nothing to control It is equally
true that without control planning will be only an academic
exercise Controlling is a continuous activity of a supervisory
nature.
 MANAGEMENT- A SCIENCE OR AN
ART
Management As Science
Management as Science believes that there are ideal managerial
practices for certain situations. Like delegation of authority.
Manager with scientific approach will expect that there is a
rational and objective way to determine the correct course of action
for any problem
They follow general principles and theories
Management as an Art
Managers are likely to rely on social & political
environment surrounding the managerial issues.
Use their knowledge and skills for a particular
situation determines course of action
Requires more than a mastery of techniques and skills

Requires managers to understand individual their

motivation and help them achieve their goal
Combining management and leadership into practice
It is such as it deals with fundamentals of knowledge,

wisdom and leadership, but because it is also

concerned with practice and application

Management is more of an art as scientific “facts” do

not remain stable over time.
 Management is both a science
and an art
• As science, it is based on principles & theories,
on the basis of which managers act, and as Art,
it deals with decision making process through
application of practical & personal skills

• “The art of management begins where science

of management ends”
 ADMINISTRATION & MANAGEMENT

•This conflict was 1st raised by Oliver Sheldon in his book “the
Philosophy of Management” in 1923.
•Three approaches:
-Administration is above Management
-Administration is a part of Management
-Administration & Management are same
 ADMINISTRATION IS ABOVE
MANAGEMENT

Administration is that phase of a business enterprise

that concerns itself with the overall determination of
institutional objectives & the policies necessary to be
followed in achieving those objectives. Management
on other hand, is an executive function which is
primarily concerned with carrying out broad policies
laid down by administration. -- Spriegel
 ADMINISTRATION IS PART OF
MANAGEMENT

•Management is process of executive control in

commerce, entailing responsibility for the
effective and planning & regulation of the
operation of an enterprise, in fulfilling of given
task.
•while Administration is that part of management
which is concerned with installation & carrying
out of the procedures and process of activities
regulated & checked against plans-- Brech
 MANAGEMENT. & ADMINISTRATION
ARE SAME

•Both involve same functions, principles &

objectives.
administrative management
operative management
•All undertakings require planning, organizing,
commanding, coordinating & controlling in order
to function properly.--- Henry Fayol.
Org-all levels Administration

Mgmt

Functions in
Organization
 Difference between Adm & Mgmt

Basis of Diff Administration Mgmt

Level of Org Top level Middle or lower
level
Major focus Policy formulation Policy execution
Scope of functions Broad & conceptual Narrow &
operational
Factors affecting External Internal
decisions
Qualities require Administrative Technical
Principles of Management
 Introduction Of Henry Fayol
(1841-1925)
- He was a French mining Engineer
- He was known as founder of “Management Process
School” - Also as first “Management Theoretician”
- His outstanding contribution to management theory comes
from his book called “ Administration Industrielle et
Generale” that was published in year 1916
- This book was best known for Classical administrative
theory, and its english version of book was called as
“General and Industrial Management”, published.
- Based on his experience of working in mining industry and
also his research, he concluded some ‘general principles of
management’, which are 14 in number.
- Let us see those 14 principles one by one ….
 14 principles of management
1. Division of work - It means to specialize the work into
managerial and non-managerial job - This specialization
helps to increase to built up skills, increase production
2. Authority and responsibility - Authority means, a
manager should have power to give commands
Responsibility must go hand on hand with authority.
3. Discipline - It implies, employees should obey orders of
management
4. Unity of command - Each employee should receive
orders only from one supervisor - It eliminates conflicts
of command
5. Unity of Direction - People engaged in a similar group
of activities must have same objectives
6. Subordination - Here it means employee must be
subordinated to overall interest of organization.
 Cont..
7. Fair Remuneration for effort - A fair remuneration
should be paid to employee for his effort - It must be
under constant attention of manager
8. Centralization or Decentralization - Whether to
centralize or decentralize the organization, it depends up
on the structure, nature of its operations, culture of its
staff and its business
9. Scalar Chain - It means a line of authority, where every
employee reports to his supervisor, and chain is
maintained from top to bottom structure of organization
10. Order - Refers to material order and social order
necessary for proper functioning of organization
11. Equity - All the employees must be treated with
fairness, kindness and justice.
 Cont..

12. Stability of tenure - Stability of tenure of job among

personnel, is necessary for successful operation of
organization.
13. Initiative - All personnel of organization must be
encouraged to take initiative, it helps for growth of
organisation.
14. Esprit De Corps - It refers to raise of morale,
motivate the employees of organization.
 Management theories
 Scientific management approach
- Developed by F.W.taylor in 1880 to 1890
- published in his book shop management &
principle of management
- F.W. taylor show the natural difference in
productivity
- taylor suggest the principle of scientific management
- main aim of the theory is to improve the economic
productivity
Scientific Management Theory

The Scientific management theory/approach is one

of the essential theories of traditional public
administration, formulated by Frederick Winslow
Taylor, an engineer. He strived to view the world
around him scientifically. Since he was in the field
of production, he was concerned with increasing
worker efficiency to propel output in the shortest
time with the fewest resources. As a result, waste
is minimised to the greatest extent possible, and
profits are maximised.
 Principles
• Standardization of work methods: Time and
motion study
• A scientific method is used to determine the best
way to accomplish each job/task performed by a
worker, based on scientific observation and
analysis, resulting in less manual work because
the worker can achieve more with fewer efforts.
The use of benchmarked and standardised tools,
equipment, and methods would improve quality
control and inspections, lowering production
costs and increasing efficiency.
 Cont..
• Taylor emphasised the importance of hiring and
training the “right man for the job,” as well as
ensuring that consumers receive fair wages and
reasonable prices for standardised goods.
Workers were frequently left unsupervised on the
factory floor to fend for themselves. As a result,
rather than piling it all on the workers, Taylor
urged management to consider the functions it
was best suited for, such as planning, organising,
controlling, and determining work methods.
• Mutual collaboration of workers and
management:
- This principle states that to increase production,
organization, and efficiency, there should be
active cooperation and cordial relations between
the administration and the workers, rather than
discord and distrust.
• Equal work distribution: Taylor stresses that there
should be an equal division of labour and
responsibility among workers and management,
and that management and workers should work
almost side by side with employees assisting.
• Selection of workers scientifically: Taylor
argued that each person should be
scientifically chosen and then assigned
work that is appropriate for his or her
physical, mental, and intellectual abilities.
To improve efficiency, proper training
should be provided.
• Mental revolution: He advocated for a shift in
worker and management attitudes toward one
another and their responsibilities. Managers
should emphasise generating the most revenue,
resulting in higher profits. Workers should
concentrate on increasing their commitment,
efficiency, and production, which will inevitably
lead to a rise in their pay.
• Division of labour: The planning function will be
taken over by the management that is trained
and skilled for the job, whilst the workers can
focus on completing their functional tasks
according to the rules, guidelines, and methods
devised by the former. As a result, everyone
does what they are best qualified for.
• Taylor advocated for strong learning and
development programs for the workers based on
their existing skill sets. It is the responsibility of
the management to select candidates for
specific jobs based on their nature, character,
and abilities.
• Work should be studied systematically and
scientifically, and various laws and rules should be
applied to everyday work to find the most efficient
method of performing a particular job. Taylor used
a stopwatch to study every worker’s movement,
removing all unnecessary activities, and
determining the minimum time required for each
job.
• Individual work: Taylor was never a proponent of
group work or activity. He claimed that people are
only motivated by personal ambition and that they
lose their individuality/individual drive in a group
setting. He believed that workers should not
interact verbally because it puts them under undue
personal stress.
 Criticism
• Look into the production function only
• Union leader felt that it was an exploitation
of the worker
• Differential payment was not accepted
because many variable reason are
responsible for lower productivity
• The moral of the work go down when he\
she not able to achieve the goal it put
impact on productivity
• Taylor not consider the human element
Social responsibility of business

• Business organizations are looked forward to solve a

broad range of social problems like poverty, crime
pollution, raise the level of education, create better
job opportunities, uplift weaker and minority sections
etc...
• It refers to the business organization’s obligation to
look after the interest of the society
• An enterprise is responsible for its impact on all
relevant stake holders
• It is the continuing commitment by business to
behave fairly & responsibly to contribute the
economic development
 Definitions of social responsibility
• “Social responsibility is an organization’s
obligation to benefit to the society in the ways
that transcend the primary objective of
maximizing profit”
• “It is the obligation of an organization to seek
that protect and improve the welfare of the
society along with its own interest”
 Nature of social responsibility
• Focus on business firms
• It deals with morale issues
• Commensurate with the objective of profit
maximization
• Pervasive activity
• Continuing activity
 Levels of social responsibility

• Obeisance of law
• Catering to public expectation
• Anticipation of public expectation
• Creation of public expectation
 Various stake holders
• Shareholders
• Employees
• Customers
• Competitors
• Government
• Society at large
 Types of companies
• A Company is a legal group created by an individual or a
group of individuals to work and regulate in a commercial
market. A company can be coordinated in many ways for
financial liability and tax purposes, depending on the
Companies Act of its management. A company's branch
usually decides which corporate structure to choose,
such as partnership, company, or corporation. In such
cases, the company can be considered a kind of
business. On the basis of shareholders, the company is
divided into- Private Sector Company and a Public
Sector Company
 Private Sector Company

• A Private Sector business is an organization that is

established for the motive of profit and is owned by a private
individual or a group of individuals and enjoys very little
government interference. The Private Sector is made up of
households, businesses and organizations that include jobs
in various areas such as retail, construction and
manufacturing. They are owned and controlled by
individuals or businesses, so companies in this category
focus on entrepreneurial activity and take risks to create jobs
and generate profits.
• Private companies are categorized by size, such as SMEs
and large companies being either private or listed
companies.
 Public Sector Company

• The Public Sector refers to all governmental organizations, including

federal, state, and local governments. Public Sector Organizations
focus on services to the general public, including education,
welfare, legal systems, employment, natural resources and medical
services.
• companies are wholly owned, controlled and supervised by the
government, whether central, governmental or local. There are two
types of public institutions. That is, either the state is fully funded
from the income it earns from collecting taxes, surcharges,
membership fees, etc., or the state holds 51% or more of the total
equity capital of its subordinates.
• Departmental Undertakings:
• Departmental organizations are one of the most ancient
forms of public enterprises, and they are also known as a
department of the government. The existence of these
depends on the government and the ministry controls
their work. The companies that are the departmental
organizations are Railways, Post-service, some
Telephone service, and others. Either the central or state
government has full control over the working of this public
sector organization. The treasury of the government has
access to the revenue of departmental undertakings.
Further, the annual budget of the government finances
these Departmental Undertakings..
 Cont..
• Public or Statutory Corporation:
• Public or Statutory Corporations are the types of public sector formed
by the parliament’s special action or state/central legislatures.
Additionally, the government finances these types of public sector
undertakings, and the legislature decides its objectives, powers,
limitations and other rights. Public/ Statutory Corporations are - Indian
airlines, State Bank of India, Oil & Natural Gas Corporation, etc.
•
• A Statutory Corporation is a separate entity that forms legally, and it
also automatically incorporates with the passing of any act in the
Parliament. Either state or the central government decides the
operations of statutory corporations. Moreover, nothing in these
corporations happens behind their backs, thus ensuring that the public
interests stay protected.
•
 Cont..
• Government Companies:
• Government Companies are the types of public enterprises in which
either state or central government holds a minimum of 51% of the
paid shares. These types of public sector undertakings follow the
provisions of the Companies act, just like the other registered ones.
The Government Companies are Hindustan Machine tools, State
Trading Corporation, etc.
• The registration of the Government Companies accomplishes under
1956’s Companies Act, and all its provisions apply to them. As the
government partially or wholly owns them, their shares are in the
name of the president of the nation.
 Cont..
• To manage these types of public sector undertakings,
the government and other shareholders nominate the
board of directors. Despite being controlled and
managed by the government, it stays far away from
political interference and is financed and audited, just
like the other private sector companies.
•
• Government Companies can also have access to the
technical, management, and other expert skills of the
private sector organizations by collaborating with them.
Types of business organizations
• Private organization:
• Public organization:
 Business Ethics
• Ethics are a set of beliefs and values that help
individuals determine what actions are right or
wrong based on their personal beliefs. Business
ethics are principles and values that guide
decision-making and behavior in business.

• It is an ethical code that businesses should follow

to maintain a healthy and successful environment.
Business ethics are based on the core concepts of
respect for people, the environment, and society.
 Cont..
• The principles of business ethics emphasize the importance of
honesty, integrity, and accountability in all interactions.
• This means considering the effects of decisions and actions on
stakeholders, customers, suppliers, employees, competitors, the
environment, and the community.
• In some ways, business ethics is regulated and mandated by law. For
example, the Sarbanes-Oxley Act of 2002 was enacted to
improve corporate governance and prevent accounting fraud. Other
laws, such as labor standards and environmental rules, also regulate
corporate behavior.
• However, business ethics go beyond mandated legal frameworks.
Many companies go beyond the law, creating ethical codes and
guidelines. For example, a business may choose not to engage in legal
but unethical activities, such as deceptive advertising and marketing,
discrimination, or environmental destruction.
•
 Ethical activities
• Organizational effectiveness

• Profit maximization & stake holder’s interest

• Attending customers with Integrity

• Meet organizational standards

 Approaches or theories of ethics
• Utilitarian Theory:

• The utilitarian theory suggests that plans and actions should be

evaluated by their consequences.
• A utilitarian or consequence-based manager would look at the
possible choices for taking a certain action in light of the results of
doing one thing versus another.
• Actions that produce the greatest benefit and least harm for most
people are deemed ethical according to this view. The focus is on
creating top overall utility and value. However, utilitarianism is
blamed for potentially missing the interests of people and minority
groups in favor of the greatest good for the greatest number. It also
provides no clear advice for how to weigh other groups' interests.
Utilitarianism can also incentivize unethical shortcuts that produce
maximum aggregate benefits.
 Cont..
• Rights-Based Ethics:
• This perspective argues that businesses must respect all
stakeholders' basic human rights and dignity, especially
employees. Workers have rights to fair treatment, safe
working conditions, adequate pay, and privacy that
businesses should uphold. The focus is on respecting
fundamental rights. But some argue it is unclear whether
firms truly have moral obligations beyond economic and
legal ones. Rights-based ethics also provides an vague
framework as it does not consider the interests of other
stakeholders beyond rights-holders.
 Cont..
• Justice and Fairness:
• Firms should distribute costs, benefits, opportunities, and
risks fairly among all stakeholder groups according to
their respective claims and merits. Workers should be
compensated and enabled based on performance and
merit, not factors like nepotism or bias. The focus is on
just and fair procedures and outcomes. However, critics
note there are various concepts of justice, and it is
unclear which feeds the best framework for business
ethics. There are also debates about which stakeholders
deserve respect in deserve respect in distributional
justice.
 Cont..
• Virtue Ethics:
• Businesses should develop and cultivate moral virtues
like honesty, integrity, care, and trustworthiness within
and among employees. Ethical decisions then flow from
having a virtuous disposition. The focus is on building
good moral character. But some argue it is unclear how
firms versus people can develop virtues. There is debate
about which virtues are most relevant and important for
businesses. Virtue ethics also provides limited guidance
on specific decisions and policies
 Tools of ethics

• Values
• Rights & duties
• Moral rules
• Human relationships
• Common morality
– Promise keeping
– Mutual aid
– Respect for others
– Respect for property
• The morality of care