business ethics pup

8/9/2019 Business Ethics PUP

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M EAN IN G

Ethics is a set of rules thatdene right and wrong conduct.

Business ethics can be dened as

written and unwritten codes ofprinciples and values that governdecisions and actions within a company.In the business world, the

organizations culture sets standards fordetermining the dierence betweengood and bad decision maing andbehavior.


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Long term ism in business

Issues of corporate ethics have taen the form of short!termism vs. long!termism

If businesses are focused on long term stability andgrowth, they are ethical" #hort term strategies, aimed at earning per share for the

year in $uestion, compromise on longer interests %arren Buet has often stressed on long term strategies Investigations into &annie 'ae suggested that the entire

senior management was intensively focused on earningsguidance

(apital maret orientation of companies force them to betempted by short term targets" Increasingly, the entire system of how companies are

evaluated by analysts, investors and stoc marets leads toa short term approach

'c)insey survey *'arch +- shows that companies arefocused on short term strategies due to maret pressures


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3 M odels of M anagem ent Ethics

/

Three Types Of Management Ethi

Moral Amoral Immoral


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3 M odels of M anagem ent Ethics

1. Moral Management0(onforms to highstandards of ethical behavior.

2. Immoral Management01 style devoid ofethical principles and active opposition to whatis ethical.

3. Amoral Management0 Intentional - does not consider ethical factors

Unintentional - casual or careless aboutethical considerations in business

2


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Developing M oral Judgm ent

6-23


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M aking Ethical Judgm ents

3

Behavior or act

that has been

committed

Prevailing norms

of acceptability

Value judgments

and perceptions ofthe observer

compared with


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W arren Buffets rule of thum b for ethicalconduct

45I want employees to as themselves6when they are in doubt about whethera particular conduct is ethical or not7

whether they are willing to have anycontemplated act appear the ne8t dayon the front page of their local paper 9to be read by their spouses, childrenand friends 9 with the reporting done byan informed and critical reporter.:*Bershire ;athaways code of ethics


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Stakeholder ersus Shareholder

#hareholder


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W hat is Ethical Behavior!. In many situations lines between right and wrong are blurred. Such situationscan lead to ethical dilemmas.When faced with ethical dilemmas, its important to consider outcomes of thedecision-making process. One way of dealing with ethical dilemmas is byusing the four way test to evaluate decisions. his test involves asking four!uestions"

Is my decision a truthful one?Is my decision fair to everyone aected?ill it build good!ill for the organi"ation?Is the decision bene#cial to all $arties !ho havea vested interest in the outcome?


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# companys managers play an important role inestablishing its ethical tone. If managers behave as

if the only thing that matters is profit, employeesare likely to act in a like manner. # companysleaders are responsible for setting standards forwhat is and is not acceptable employee behavior.Its vital for managers to play an active role increating a working environment where employeesare encouraged and rewarded for acting in anethical manner.

W "# $S %ES'S$BLE (#% )%E*+$',E+"$)S $' *' #%,*'$-*+$#' !


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O TH ER FACTO RS IM PACTIN G

O RG AN IZATIO N AL ETH ICS

(orporate cultureE8istence and application of a written code of ethics&ormal and informal policies and rules@orms for acceptable behavior&inancial reward system#ystem for recognizing accomplishment(ompany attitude toward employees

;ow employees are selected for promotions;iring practices1pplications of legal behavior?egree to which professionalism is emphasized=he companys decision maing processes

Behaviors and attitudes of the organizations leaders


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7 Principles of Adm irableBusiness Ethics

1. %e &rustful

2. 'ee$ An ($en Mind

3. Meet (bligations

). *ave +lear ,ocuments

. %ecome +ommunity Involved

. Maintain Accounting +ontrol

/. %e 0es$ectful


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Overview of issues in business ethics

(orporate socialresponsibility

duciary responsibility,staeholder concept v.

shareholder conceptindustrial espionage.


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eneral business ethics

thics of human resourcemanagement

thics of sales and mareting thics of $roduction

thics of intellectual $ro$ertyno!ledge and sills


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IM PO RTAN CE O F ETH ICS


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IM4(0&A5+ (6 %U7I577&*I+7

&ublic e.pects business to e.hibit highlevels of ethical perform ance and socialresponsibilit/0Encouraging business firm s and their

em plo/ees to behave ethicall/ is toprevent harm to societ/0&rom oting ethical behavior is to protect

business from abuse b/ unethicalem plo/ees or unethical com petitors0"igh ethical perform ance also protectsthe individuals 1ho 1ork in business0


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Coke & Pepsi in India

=oday, more from the world ofproduct safety. =his time the storyis about (oe and


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SW *M $ $E*'*'D $EW S #' E+"$)S

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$n order to 1in the gam e4 /ou need toplan0 +o plan inform ation is im perative0,et it through legal 5 ethical m eans0 $n

life and business4 ethical standardm ust be set4E+"$)*L S+*'D*%D M 2S+ BE SE+4

E+"$)*L S+*'D*%D M 2S+ BE M E+0


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Ethics are important notonly in business but in allaspects of life because it

is an essential part of thefoundation on which of acivilized society is build.1 business or society

that lacs ethicalprinciples is bound to failsooner or later.

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business ethics pup

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