Business Ethics: CHAPTER 1: �INTRODUCTION TO BUSINESS ETHICS

CHAPTER 1: �INTRODUCTION TO BUSINESS ETHICS

1. Semester-IV “ 403- Business Ethics” Prepared by, Prof. Mayuri Londhe Sanjivani Arts, Commerce and Science College Dept. of BBA-IB

2. CHAPTER 1: INTRODUCTION TO BUSINESS ETHICS Meaning, Nature and Scope of Business Ethics : Ethics in Contemporary Business Organizational Ethical Climate – Ethical Decision Making and Importance of framing ethical policies Why Ethical Problems occur in Business Difference between workplace Ethics and Laws Normative and Individual ethics

3. CHAPTER 1: INTRODUCTION TO BUSINESS ETHICS Ethics: E thics refers to well-founded standards of right and wrong that prescribe what humans should do, usually in terms of rights, obligations, benefits to society, fairness, or specific virtues . Business Ethics: Business ethics is a practice that determines what is right, wrong, and appropriate in the workplace. Business ethics is often guided by laws, and these principles keep companies and individuals from engaging in illegal activities. Business ethics ensure that a certain basic level of trust exists between consumers and various forms of market participants with businesses.

4. Definition: By definition, Business ethics are the moral principles that act as guidelines for the way a business conducts itself and its transactions. In many ways, the same guidelines that individuals use to conduct themselves in an acceptable way – in personal and professional settings – apply to businesses as well . “ Business ethics is generally coming to know what is right or wrong in the workplace and doing what is right—this is in regard to effects of products/ services and in relationship with stake holders ”. "Business ethics is the study of business situations, activities, and decisions where issues of right and wrong are addressed." "The ethics of business is the ethics of responsibility. The business man must promise that he will not harm knowingly."

5. Nature of Business Ethics The characteristics or features of business ethics are:- Code of conduct :  Business ethics is a code of conduct. It tells what to do and what not to do for the welfare of the society. All businessmen must follow this code of conduct. Based on moral and social values  : Business ethics is based on moral and social values. It contains moral and social principles (rules) for doing business. This includes self-control, consumer protection and welfare, service to society, fair treatment to social groups etc. Gives protection to social groups  : Business ethics give protection to different social groups such as consumers, employees, small businessmen, government, shareholders, creditors, etc. Provides basic framework  : Business ethics provide a basic framework for doing business. It gives the social cultural, economic, legal and other limits of business. Business must be conducted within these limits. Voluntary  : Business ethics must be voluntary. The businessmen must accept business ethics on their own. Business ethics must be like self-discipline. It must not be enforced by law. Requires education and guidance  : Businessmen must be given proper education and guidance before introducing business ethics. The businessmen must be motivated to use business ethics. They must be informed about the advantages of using business ethics . Relative Term  : Business ethics is a relative term. That is, it changes from one business to another. It also changes from one country to another. What is considered as good in one country may be taboo in another country. New concept :  Business ethics is a newer concept. It is strictly followed only in developed countries. It is not followed properly in poor and developing countries .

6. Scope of business ethics: Positive consequences Goodwill of the business and businessman Protection- both sides Self satisfaction Encourage others Success and development New management

7. Ethics in Contemporary Business Integrity Loyalty Trustworthiness Honesty Respect and concern Fairness Leadership Caring Transparency Organizational ethical climate

8. Ethical Decision Making Decision making process includes following steps; Identify the problem Generate alternatives Decide on the course of actions Implementation

9. Importance of framing ethical policies To protect organization assets Helps in Team work and productivity Helps In creation of public image and goodwill Helps In decision making

10. Why Ethical Problems occur in Business Personal gain and selfish interest Business goals Vs Personal Values Competitive pressure on profits Cross cultural contradictions

11. Difference between workplace Ethics and Laws Workplace ethics Laws Meaning Ethics refers to a system of moral principles Laws refers to the written opinions of the courts according to act Nature Ethics aligns with a professional setup Law aligns with policies and procedures. Areas 3 major areas of study: Meta-ethics, Normative ethics, Applied ethics. 1.Selected workplace rules; Which can protect your business from legal claims 2.Effectively necessitates that even the smallest of businesses set up work rules. Consistent within It will be consistent within professional setup but would vary between 2 diff. organizations or institutions Law will not be consistent within a professional set up and it would not vary between 2 different organizations or institutions.

12. Determined by Institution , organization and varied professions. Law are not determined by and institution , organization and varied professions. It is a legal written framework. Action Ethics could act as a constraint. Should be consistent. Law could act as legal framework. Derived from Greek word ethos that means character. Teutonic word ‘Lag’ that means ‘definite’.

13. Normative and Individual ethics There are 3 major area of study within ethics. 1. Meta-Ethics ( the study of the concept of ethics) 2 . Normative Ethics ( the study of how to determine ethical values) 3. Applied Ethics ( the study of the use of ethical values) Normative ethics: normative ethics, that branch of  moral philosophy , or ethics, concerned with criteria of what is morally right and wrong. It includes the formulation of moral rules that have direct implications for what human actions, institutions, and ways of life should be like

14. Individual Ethics: Personal ethics refers to a person's beliefs about what's right and wrong and guides individuals in the decisions they make both in and out of the workplace. Your unique ethics will determine how you handle certain situations at work as well as how you grow and develop within your career. Personal/ Individual ethics refers to the ethics that a person identifies with in respect to people and situations that they deal with in everyday life. Professional ethics refers to the ethics that a person must adhere to in respect of their interactions and business dealings in their professional life. An important part of your personal ethics statement is identifying your personal beliefs and personal values. Some code of ethics examples include integrity, selflessness, honesty, loyalty, equality, fairness, empathy, respect, and self-respect .

15. 3 C’s of Business Ethics: Compliance : (The need for compliance of rules including) Laws Principles of Morality Policy Of Company 2. The Contribution: The core values Quality of Products or Services Employment Usefulness of activities to surrounding environment & quality of work life 3. The consequences of business activity: Towards environment inside and outside the organization Social responsibility toward shareholders, bankers, customers and employees of organization. Good public image, sound activity gives good image ***

16. Assignment No. 1 What do you mean by Ethics and Business E thics? Explain the scope of business ethics. Explain the importance of promoting an Ethical Business Climate. Write short Notes on: Ethical Decision Making Ethics in Contemporary business