Business Ethics

Manish Naik
+91 986 763 6938
manish.canopy@gmail.com

Broad Syllabus
Evolution of thought of
ethics in business
Culture and ethics
Overview of ethics
Social and economic
values and responsibilities
Trusteeship
Normative ethics
Ethics and decision
making

Ethics and corporate

excellence
Ethics in corporate settings

Institutionalization of ethics
Corporate governance
Disclosures
Variety of ethical situations
current and future
CSR

Books and Reference Text

Books
Balachandran S, Business Ethics
Velasquez Manuel, Business Ethics Concept and
Cases, Pearson
Shaw William, Business Ethics, Wadsworth Publishing
Raj Rituparna, A Study in Business Ethics, Himalaya
Publishing
Reference Text
The Ethics of Management by La Rue Hosmer
Ethics in Management by SK Chakraborty, OUP

Some Terms of Reference

Some Terms of Reference (1)

Business ethics goes hand-in-hand with
ethics, which is a major discipline
Business ethics is applied science like:
Accountancy ethics
Medical ethics
Consumer ethics
Religious ethics
Work (professional) ethics
Personal ethics

Some Terms of Reference (2)

During the course of these lectures, well discuss
and debate over concepts and ideas that may
be:
against someones religious/personal beliefs;
bold;
need not be appealing to all (may be even offensive
to some participants); or even
hold against someones thought orientation

Note that ours are going to be purely class

discussions enabling you to take ethical
decisions in your personal & work settings

Our Purpose
1. Give an overview of the likely ethical
questions you may face in future
2. Enable you to take ethical decisions in
work and personal settings
3. Develop an ability to institutionalize
ethical standards in organizations
4. Prepare students for ethical leadership
roles

Terminologies and Errors

Ethical and unethical

Ethically right and ethically wrong
Moral, immoral and non-moral
Mores and folkways
Morally right and morally wrong
Ethical dilemmas
Profiting and profiteering

Ethics

Ethics
The concept of ethics comes from the
Greek word ethos meaning both an
individuals character and a communitys
culture
Ethics has a distinguishing disposition

Ethics
Ethics is a set of values and rules that define
right and wrong conduct
What is considered ethical may depend on the
perspective from which ethical issues are
considered
Ethics is non-universal ethics are governed by
the environment and the society (religion
included)
What is ethical may not be legal and vice versa

Forces that Shape Ethical Conduct

Societal norms and culture

Laws and regulations
Organizational practices and culture
Individual perspective

Nature of Ethics
Ethics deals only with humans

Nature of Ethics
Ethics deals only with humans
Under what conditions can ethics come into
play?
Only out of freewill
There should be a choice
One needs fully-developed rational faculty and
maturity

Ethics belongs to the field of social sciences

Ethics is a Normative Science

Business Ethics

Business and Ethics:

Some Questions
Is profit making the only goal of
businesses?
Should an unbridled market mechanism
drive an enterprise?
To what extent corporations should
compensate for the hidden costs that are
incurred by the society at large?

Consensus in Answers
A consensus emerged:
that corporate practices cannot bypass the
fundamental demands of ethical behavior,
that administration and policies have to be
transparent and publicly accountable, and
that businesses have to be sensitive to the
community and the environment within which
they operate.

This led to the ethical trilogy.

Business Ethics: Emergence of

Ethical Trilogy

* Generally all treated in isolation

Business Ethics: Ethical Trilogy

Why Business Ethics for

B-Schools?
A business that makes nothing but money
is a poor kind of business. - Henry Ford

Why Business Ethics for

B-Schools?

Why Organizations are

Vulnerable to Ethics Violations

Authority structures
Incentive systems
Role of (at times lack of) corporate governance
Role of decision making lapses
Escalation of commitment (a decision making bias
where people commit additional resources to a failing
course of action)
Easier wrong that gives results
Leader behaviour
Non institutionalization of value systems

Some Trivia
Where was business ethics first introduced?
Why was ethics introduced in management
courses?
Concepts have undergone change due to
internationalization
Will undergo modifications due to nature of
future workplaces, and business relations

Relationship between Business and

Ethics
Unitarian view
Separatist view
Integration view

Nature of Business Ethics

Ethical decisions differ with the individual
perspectives of different persons
Ethical decisions are not limited only to themselves,
but affect a wide range of other situations as well
Most ethical decisions involve a tradeoff between
costs incurred and benefits received
The consequences of most ethical decisions are not
clear: they are ambiguous in nature
Every person is individually responsible for the
ethical or unethical decision and action that he or
she takes

The Ethics of Action

Bribery
Coercion
Theft
Unfair discrimination
Adulteration (adultery)
Wrong disclosure
Under disclosure
Evasion of duty
False claims

Insider trading
Puffery
Deception
Deliberate wrongdoing
Anchoring
Wastage (resources,
food, time, )
Unfructuous work to
keep people engaged

The Ethics of Action

Gifting
Lobbying
Canvassing
Solicitation
Taboos
Plagiarism
Ethnocentrism
Stereotyping

Advertising Ethics

Deceptive advertising
False advertising
Misleading ads
Impression
management
Harmful products
Celebrity
endorsements
Hidden surcharges

Puffery
Exaggeration
Ambiguity
Psychological effect

Deception: Advertisers Use

Ambiguity (semantic ambiguity light desserts
or in expression light snacks)
Concealing information (lack of transparency)
False claims (300% more oxygen or Volvo ad)
Exaggeration (whiteness in detergents)
(However, Puffery is ethical use of harmless
adjectives and superlatives like:
BMW (the ultimate driving machine)
Aamby Valley (lifes best abode)

Psychological effects (use of links - Marlboro

campaigns relate to machoism)

Volvo Ad

Basis for Ethical Decisions

Utilitarianism
Justice
Equity
Term concept
Option concept
Systems concept
Reversibility
Intention
Impact