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Module 3 & 4
Business Ethics- Meaning of ethics, business ethics, relation between ethics and business ethics,
evolution of business ethics, nature of business ethics, scope, need and purpose, importance,
approaches to business ethics, sources of ethical knowledge for business roots of unethical
behavior, ethical decision making, some unethical issues, benefits from managing ethics at
workplace, ethical organizations
Management of Ethics - Ethics analysis [ Hosmer model ]; Steps/ considerations in resolving
ethical dilemma; Ethics in practice - professional ethics for functional managers; Comparative
ethical behaviour of managers; Code of ethics; Competitiveness, organizational size,
profitability and ethics; Cost of ethics in Corporate ethics evaluation
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Meaning Of Ethics
The basic concepts and fundamental principles of right human conduct.It includes study of
universal values such as the essential equality of all men and women, human or natural rights,
obedience to the law of land, concern for health and safety and, increasingly, also for the
naturalenvironment. See also morality.
Ethics, also known as moral philosophy, is a branch of philosophy that involves systematizing,
defending, and recommending concepts of right and wrong conduct. The term comes from the
Greek word ethos, which means "character". Ethics is a complement to Aesthetics in the
philosophy field of Axiology. In philosophy, ethics studies the moral behavior in humans, and
how one should act. Ethics may be divided into four major areas of study:
Meta-ethics, aboutthe theoretical meaning and reference of moral propositions and
howtheir truth values (if any) may be determined;
Normative ethics, about the practical means of determining a moral course of action;
Applied ethics, about how moral outcomes can be achieved in specific situations;
Descriptive ethics, also known as comparative ethics, is the study of people's
beliefsabout morality;
Business Ethics
Business ethics (also corporate ethics) is a form of applied ethics or professional ethics that
Eti Khatri, Asst. Professor
business
malpractices
Some
unscrupulous
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Cultural experience: It refers to the set of values, rules &beliefs among generations to be
followed.
State problem.
2.
Check facts.
Many problems disappear upon closer examination of situation, while others
change radically.
3.
4.
Be imaginative, try to avoid "dilemma"; not "yes" or" no" but whom to go to,
what to say.
5.
publicity test: Would I want my choice of this option published in the newspaper?
reversibility test: Would I still think choice of this option good if I were adversely
affected by it?
organization test: What does the company's ethics officer or legal counsel say
about this?
6.
Make a choice based on steps 1-5.
7.
Review steps 1-6. What could you do to make it less likely that you would have to make
such a decision again?
Are there any cautions you can take as an individual ( and announce your policy
on question, job change, etc.)?
Ethical Organizations:
Are business entities that have incorporated ethics & values in the bloodstream of
the organization. Management embodies the vision.
Characteristics:
Leadership
Integrity
Values
Respect
Loyalty
Concern
Egoism
Utilitarian
i)Egoism
Ethical egoism: whatever action serves my self-interest is also the morally right action. Whats
good for me in the sense that it gives me pleasure and happiness is also good in the sense that its
the morally right thing to do.
Ethical egoism mirrors altruism: If Im an altruist, I believe that actions ought to heighten the
happiness of others in the world, and what happens to me is irrelevant. If Im an egoist, I believe
that actions ought to heighten my happiness, and what happens to others is irrelevant.
When we hear the word egoist, an ugly profile typically comes to mind: self-centered,
untrustworthy, pitiless, and callous with respect to others. Some egoists really are like that, but
they dont have to be that way. If youre out to maximize your own happiness in the world, you
might find that helping others is the shortest and fastest path to what you want. This is a very
important point. Egoists arent against other people, theyre for themselves, and if helping others
Eti Khatri, Asst. Professor
b)Non-Consequentialist Theory
Normative Ethical Theories are general approaches or strategies to moral deliberation and
decision-making. They are future oriented as well as past oriented. As future-oriented, they
provide us with guidelines for decision-making; as past-oriented, they provide criteria for
evaluation of choices or decisions already made. Each normative ethical theory typically
includes its own philosophical justification, worked out by its advocates, together with criticisms
of alternate approaches for being in some way inadequate.
Eti Khatri, Asst. Professor
Ethical Dilemma
Managers are responsible for upholding the ethical code and helping others to do so as well.
Outline the role managers must play in implementing internal ethical standards and aligning the
organization with external standards
Managers hold positions of authority that make them accountable for the ethical conduct of
those who report to them.
Managers monitor the behavior of employees in accordance with the organization's
expectations of appropriate behavior, and they have a duty to respond quickly and appropriately
to minimize the impact ofsuspected ethical violations.
Managers may be responsible for creating and/or implementing changes to the ethical codes or
guidelines of an organization.
Managers may also be subject to a particular code of professional ethics, depending on their
position and training. Fiduciary duty is an example that applies to some managerial roles
Ethics, also known as moral philosophy, is a branch of philosophy that involves systematizing,
defending, and recommending concepts of right and wrong behavior .
Professional Ethics
Professional Ethics concerns ones conduct of behavior and practice when carrying out
professional work. Such work may include consulting, researching, teaching andwriting.The
institutionalization of codes of conduct and codes of practice is common with many professional
bodies for their members to observe.
Functional Managers are those who are responsible for carrying at a particular function in an
organization like functional manager can be Marketing Manager, HR Manager, Financial
Manager, Public relation officer etc.
Marketing Manager:
Marketing manager Marketing Managers has to follow certain Marketing Ethics.
A right marketing action is expected to contribute to the overall societal gain both in the
short and the long rule.
One ethical practice would be that which in a marketing exchange alters the entitlements
of either the buyers of the seller in such a way that it is at the expenses of others.
For instance, raising the price by a percent and offering that as a discount to attract.
Therefore Marketing ethics should guide a marketers action in such a way that a
marketing action.
Therefore a code of ethic for marketing managers is used by the American Marketing
Association.
Reports and documents shall contain full, fair, accurate, timely and understandable
information.
Comply with rules and regulations of federal, state, provincial and local governments,
and other appropriate private and public regulatory agencies.
Competitiveness &Ethics
Any organization, public or private, large or small, faces internal and external uncertainties that
affect its ability to achieve its objectives. The effect of uncertainty on an organization's
objectives is "risk." Risk management, commonly known in the business community as
enterprise risk management (ERM), can provide for the structured and explicit consideration of
all forms of uncertainty in making any decision.
The overarching principle of ERM is that it must produce value for the organization. It is the
culture, processes and structures that is directed towards taking advantage of potential
opportunities while managing potential adverse effects. Corporations face the task of managing
their risk exposures while remaining profitable and competitive at the same time. Managing risks
is not a new challenge, yet it may get overlooked due to several reasons. The challenges and
demands of contemporary markets, customer expectations, regulatory authorities, employees and
shareholders present organizations with an interesting array of contradictions. Risk management
can enhance the environment for identifying and capitalizing on opportunities to create value and
protect established value.
Leadership
However, rather than seeing these activities as costs, Primark believes that they enable the
business to operate in a sustainable and well-managed way. Through its remediation programme,
Primark's team of ethical managers work with factories to help them find ways of putting issues
right and developing sustainable practices. This provides a benefit to the supplier but also in the
long term to Primark, who gains from having suppliers all working to its standards.