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BUSINESS OBJECTIVE V. ETHICSOften ethical conflict between making

money and doing what is rightPeople in business claim they are bound

only by law, not by normal normsBusiness is no concern with ethics Moral is personal matter

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• Positive business ethics:

• i.e – personal ethics, fairness, integrity, truth telling, dependability, business plan, values based.

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ETHICS AND MORALITY EthicsSolomon – ethics means character/custom How people ought to act - individual

character Its basic concept:-A.individual character – ‘a good person’B. the social rules that govern and limit our

conduct – ‘morality’

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Ethics means how people ought to be distinguish from morality which refers to human conduct & values.

Ethics presupposes the existence of morality.

The morality of society is related to its customs and law of society.

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Morality Rules of human behavior/human conduct and

values Specifies certain act as wrong or immoral Action can be viewed from moral perspective –

including business Those practices & activities that are considered

importantly right and wrong The rules that govern those activities The values that embedded, fostered or pursued by

those activities & practices

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BUSINESS ETHICSPart of general field of ethicsWhat is business ethics?A study what constitutes right and

wrong/good and bad in business activitiesThus, it is not the study of what is legal but

of the application of moral standards to business decisions.

Moral standard s are canons of personal behaviour that are neither legislated nor changed by legislation.

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AMERICAN MYTH OF A MORAL BUSINESS

A popular & widespread view among American businessman

It describes how American Business and businessman perceive themselves & are perceived by others.

Business is concerned primarily with profit

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Business & people in business are not explicitly concerned with ethics

They are not unethical or immoralBusiness is not expected to be concerned

with ethics

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RELATION BETWEEN BUSINESS AND MORALITY

Business and moral are relatedBusiness is an important part of

contemporary societyMorality consist of rules of human

behaviors & specifies that certain actions are wrong or immoral or vice versa

Business presuppose a background of morality & would be impossible without it.

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• BUSINESS RESPONSIBILITIESMerely profit making orSocial responsibilities? Narrow view – profit maximizationFrieman: ‘business has no special

responsibilities other than to maximize profits’

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• Broader view – corporate social responsibility Keith Davies: ‘ social responsibility implies that

business decision maker in the process of serving his own business interests is obliged to take actions that also protect and enhance society’s interest…’

In this manner, harmony is achieved between business’s action and the larger social system.

The businessman becomes concerned with social as well as economic outputs and with total effect of his institutional actions in society.