INTRODUCTION TO INTRODUCTION TO BUSINESS ETHICSBUSINESS ETHICSSubmitted to : Prof. Ashwini yaranal Submitted by : Arun 05

EthicsEthics word meaning- character

Set of standards or code or value system, worked out from human reason & experience by which free human actions are determined as ultimately right or wrong, good or evil.

Business ethics-appl. of ethics in business

Nature of ethics in Nature of ethics in businessbusinessIn busi. 2 types of ethical problem

>overt- bribary, theft, sabotage etc

>covert- complex and not transparent, defy ethical solutions

3 Models of Management 3 Models of Management EthicsEthics

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Three Types Of Management Ethics

3 Models of Management 3 Models of Management EthicsEthics

1. Moral Management—Conforms to high standards of ethical behavior.

2. Immoral Management—A style devoid of ethical principles and active opposition to what is ethical.

3. Amoral Management—◦ Intentional - does not consider ethical

factors◦ Unintentional - casual or careless about

ethical considerations in business 6

Stages of Ethical Consciousness in BusinessStages of Ethical Consciousness in Business

First Stage

Law of Jungle: business Decisions are driven by

“might is right”

Business ills are common at this stage

Second Stage

Anything for Profit: believe “anything goes as long

as one does not get caught by the law”

Bribery to government, tax evasion etc are common

Third Stage

Profit maximizing in short term: Believe that “good business is good ethics”-

to maximize profits within constraints of law

Fourth Stage

Profit maximizing in Long term: Shift in focus from business to ethics-

“sound ethics is good business” in long run. Here firms create post of ethics

officer to supervise ethical aspect of business

Fifth Stage

Stakeholder concept- Companies concentrate on social and economic mission

Focus on philanthropy

Focus is to create mutual relationships between companies and society

Sixth Stage

Corporate Citizenship: Higher level of ethical

consciousness

Belief that business can be healthy only if society

around it is healthy and no other institution

including government has resources to bring this

transformation except Business Organizations

Entrepreneurs seek to achieve social objectives

such as promoting community health, employing

handicapped people, etc

Factors Affecting Ethical Factors Affecting Ethical ChoicesChoices

The ManagerThe Manager

Level or stage of moral development

Learned Ethics

The OrganizationThe Organization

Systems

Culture

Moral DevelopmentMoral DevelopmentPreconventionalPreconventional Level = concerned Level = concerned with external rewards and with external rewards and punishmentspunishments

ConventionalConventional Level = conform to the Level = conform to the expectations of peers and society expectations of peers and society (consistent with practical approach to (consistent with practical approach to ethical decision making)ethical decision making)

Postconventional Postconventional (Principled) Level = (Principled) Level = individuals develop a personal, individuals develop a personal, internal set of standards and values. internal set of standards and values. (About 20% of adults)(About 20% of adults)

The OrganizationThe Organization

SystemsExplicit rules and policiesExplicit rules and policiesReward systemReward system

CultureCommon ValuesCommon ValuesTraditionsTraditions

Characteristics of BECharacteristics of BEDiffer with persons ethical questions do not have a

unique soln but a multitude of alternatives

Ethical decisions are not limited to themselves, but affects a wide range of other situations as well.

ED involves a trade off between cost incurred and benefits received.

Consequences are not clearEvery person is individually

responsible for the ethical or unethical decision and action that he or she takes

Ethical actions are voluntary human actions

Morality and ethicsMorality and ethics Morality is the std an individual or

community keeps about what is right and wrong or good and evil.

MoralityMoral norms deals with topics that

either seriously harm or benefit human beings

Moral stds are not dependent on or changed by the decision of authoritative bodies

Moral demands enjoys a self-driven force

Expressed through the medium of special emotions.

EthicsEthics helps one to address

questions such as what do moral principles mean in a given situation

Ethics offers certain moral stds to judge a particular human behaviour or situation

Why is ethics impo. in Why is ethics impo. in business?business?Ethics corresponds to basic human

needsValues create credibility with the

publicValues give mgmt credibility with

employeesValues help better decision makingEthics and profitLaw cannot protect society, ethics

can.

Why Ethical problems Why Ethical problems occur?occur?

Personal gain

Individual values widely differ with organizational

goals

Managers values and attitudes

Competitive pressures

Cross-Cultural contradictions

Benefits of Business Benefits of Business EthicsEthicsBetter ethical climate

Employee commitment and trust

Investor loyalty and trust

Customer satisfaction and trust

Long term profits

Criteria For Criteria For Ethical Decision MakingEthical Decision MakingMost ethical dilemmas involve Conflict between needs of the part &

whole- Individual versus the organization - Organization versus society as a whole

Managers use normative strategies to guide their decision making - norms and values

Ethical Decision Making Ethical Decision Making ApproachesApproachesUtilitarian Approach

Individualism Approach

Moral-Rights Approach

Justice Approach

Utilitarian ApproachUtilitarian Approach● Moral behavior produces the

greatest good for the greatest number

● Criticise fear a “Big Brother” approach and ask if the common good is squeezing the life out of the individual

Individualism ApproachIndividualism Approach● Acts are moral when they promote

the individual's best long-term interests, which ultimately leads to the greater good

● Individual self-direction paramount

● Individualism is believed to lead to honesty & integrity since that works best in the long run

Moral-Rights ApproachMoral-Rights ApproachMoral decisions are those that

best maintain the rights of those people affected by them.

An ethical decision is one that avoids interfering with the fundamental rights of others

Six Moral RightsSix Moral Rights

1. The right of free consent1. The right of free consent

2. The right to privacy 2. The right to privacy

3. The right of freedom of conscience

3. The right of freedom of conscience

4. The right of free speech 4. The right of free speech

5. The right to due process 5. The right to due process

6. The right to life & safety 6. The right to life & safety

Justice ApproachJustice Approach Moral Decisions must be based

on standards of equity, fairness, impartiality

Three types of Justice Approaches: Distributive Justice Procedural Justice Compensatory Justice

Distributive JusticeDistributive JusticeDifferent treatment of people

should not be based on arbitrary characteristics

In case of substantive differences, people should be treated differently in proportion to the differences among them

Procedural JusticeProcedural JusticeRules should be clearly stated

Rules should be consistently and impartially enforced

Allocation of slides Allocation of slides

Sl.no Names Slide no

01 Rattan shinde 1,2,3

02 Punit patil 4,5,6

03 Shivkumar 7,8,9

04 Arshad 10,11,12

05 Praveen 13,14

06 Arun 15,16,17,18

07 Altaf 19,20

08 Shreeshail 21,22

09 sateesh 23,24,25,26

10 Feroz 27 to end

Thank you