business ethics.pptx course 1 chap in book of business ethics

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1. chapter 1 Business Ethics: An overview Dr Zoya khan

2. What is Ethics? Ethics: Is a branch of philosophy. Is a normative science because it is concerned with the norms of human conduct. As a science, it must follow the same rigors of logical reasoning as other sciences. As a science, involves systemizing, defending and recommending concepts of right and wrong behavior.

3. Principles of Personal Ethics Personal ethics refers to the application of values in everything one does. Principles of personal ethics include: 1. Concern for the well being of others; 2. Respect for the autonomy of others; 3. Trustworthiness and honesty; 4. Willing compliance to law; 5. Basic justice: being fair ; 6. Refusing to take unfair advantage; 7. Benevolence: doing good; and 8. Preventing harm to any creature.

4. Principles of Professional Ethics The basic principles people are expected to follow in their professional career are the following: Impartiality: Objectivity; Trustworthiness and honesty; Openness: Full Disclosure; Confidentiality: Trust; Due Diligence: Duty of care; Fidelity to professional responsibilities; Avoiding potential or apparent conflict of interest.

5. What is Business Ethics? Business ethics is the application of general ethical ideas to business behaviour . It is based on the principle of integrity and fairness and concentrates on the benefits to the stakeholders, both internal and external. Stakeholder includes those individuals and groups without which the organization does not have an existence. It includes shareholders, creditors, employees, customers, dealers, vendors, government and the society.

6. What is not Business Ethics? Ethics is different from religion. Ethics is not synonymous to law. Ethical standards are different from cultural traits. Ethics is different from feelings. Ethics is not a science in the strictest sense of the term. Ethics is not just a collection of values.

7. Code of Conduct and Ethics for Managers Managers must observe the following ethical values while performing their duties: Impartiality Responsiveness to public interest Accountability Honesty Transparency Integrity

8. Evolution of Business Ethics over the years The 1970s saw papers from the academic circle. Businessmen became more concerned with their public image and addressed ethics more directly. 1974: The first conference held at the University of Kansas. 1975: Business ethics became institutionalized at many levels through writings and conferences. 1979: Three anthologies on business ethics appeared: Ethical Theory and Business by Tom Beauchamp and Norman Bowie; Ethical Issues in Business: A Philosophical Approach by Thomas Donaldson and Patricia Werhane; and Moral Issues in Business by Vincent Berry.

9. Evolution of Business Ethics over the years (contd.) 1980s: The subject was taught in several universities in the US and Europe. There were also, by this time, many journals of business ethics, apart from centers and societies established to promote ethical practices. 1982: Richard De George brought out Business Ethics, and Manuel G. Velasquez published his Business Ethics: Concepts and Cases. 1990: Business ethics as a management discipline was well-established. Parallel to these academic pursuits, the late 1980s and early 1990s saw increased concern for consumer rights, quality, safety, price, customer service and environment in Britain. Simultaneously, with these developments, religion also lent its powerful voice.

10. Importance and Need for Business Ethics A business organization competes in the global market on its own internal strength, in particular, on the strength of its human resource and on the goodwill of its stakeholders. The value-based management and ethics that an organization uses in its governance enables it to establish productive relationship with its internal customers, and lasting business relationship with its external customers. Real type situations (Tata Steel and Infosys) show that use of ethical practices in business creates high returns for companies

11. Values and Ethics in Business A value is a view of life and judgement of what is desirable. It is very much part of a person's personality and a group's morale. Business ethics relates to issues of "what is right" and "what is wrong" while doing business. What values are to individuals, ethics are to business. Business ethics operates as a system of values, relating business goals and techniques to specific human ends.

12. Distinction Between Values and Ethics Values Ethics Personal in nature (e.g. a belief in providing customer satisfaction and being a good Generalized value system (e.g. avoiding discrimination in recruitment and adopting fair business practices). Offer alternatives to choose from. Provides general guidelines within which the management can operate.

13. Why should Businesses act Ethically? The reasons for an organization to be ethical include: To protect its own interest . To protect the interests of the business community as a whole so that the public will have trust in it . To keep its commitment to society to act ethically . To meet stakeholder expectations.

14. Why should Businesses act Ethically? (contd.) The reasons for an organization to be ethical include: To prevent harm to the general public, To build trust with key stakeholder groups . To protect themselves from abuse from unethical employees and competitors . To protect their own reputations . To protect their own employees . To create an environment in which workers can act in ways consistent with their values.

15. Ethical Decision-making Norman Vincent Peale's and Kenneth Blanchard's suggestions to conduct ethical business. Is your decision fair? Is it a win-win situation for all? Is your decision legal? If it is not legal, it is not ethical. The Eleventh Commandment: "Thou shall not be ashamed when found", meaning when hauled up for unethical behavior, if one's conscience is clear, then there is nothing to be ashamed of.

16. How Corporations Observe Ethics in Their Organizations? Publish in-house codes of ethics to be strictly followed by all their associates. Employ people with a reputation for high standards of ethical behavior at the top levels. Incorporate consideration of ethics into performance reviews. Give rewards for ethical behavior. SEBI, CII and such other organizations representing corporations issue codes of best practices and enjoin their members to observe them. IIMs and highly rated B-schools give extensive and intensive instruction in business ethics, corporate social responsibility and corporate governance as part of their curriculum. Conduct an Ethics Audit.

17. Corporate Governance Ethics Corporate governance is a set of rules that governs the administration and management of companies. Its goalposts are transparency, integrity, full disclosure of financial and non-financial information, and protection of stakeholders' interests.

18. Benefits from Managing Ethics in Workplace The many benefits that arise from managing ethics in the workplace are: Attention to business ethics improves society. Ethical practice contributes towards high productivity and strong team work. Changing situations require ethical education. E thical practices create strong public image. Strong ethical practices act as an insurance

19. Characteristics of an Ethical Organization Mark Pastin provides the following characteristics of ethical organizations: At ease while interacting with diverse internal and external stakeholder groups . Obsessed with fairness. Individual responsibility, with individuals assuming personal responsibility for actions of the organization. See their activities in terms of purpose.

20. Recognizing Ethical Organizations There are certain characteristics by which we will be able to identify an ethical organization: On the basis of corporate excellence In relation to the stakeholders In relation to corporate governance

21. The end