Business Ethics PDF

BUSINESS ETHICS TABLE OF CONTENTS Business Ethics Conceptual Framework of Corporate Ethical Development Formulate ethical decision in business. WHAT IS ETHICS? Ethics are moral guidelines which govern good behavior. Business ethics, by definition, relates to the norms fo...

BUSINESS ETHICS TABLE OF CONTENTS Business Ethics Conceptual Framework of Corporate Ethical Development Formulate ethical decision in business. WHAT IS ETHICS? Ethics are moral guidelines which govern good behavior. Business ethics, by definition, relates to the norms for ethically correct and wrong behavior in the workplace. ETHICS - derived from the Greek word ethos – meaning “ character.” - is conce rne d with understanding right and wrong and how c o n d u c t should be judged to be good or bad. BUSINESS ETHICS - it is when the ethical principles analysis are applied to business - - is an organization’ s policies and standards established to ensure certain kinds of behavior by its members. BUSINESS ETHICS The Board should adopt a Code of Business Conduct and Ethics and ensure its proper and efficient i mpl e me ntation and monitoring of compliance. As per Laura Nash: Business Ethics is “ the study of how personal moral norms apply to the activities and goals of c o m m e r c i a l enterprise. It is not a separate moral standard, but the study of h ow the business context poses its own u n iq u e probl e ms for the moral person w ho acts as an agent of this system.” 3 BRANCHES OF ETHICS 1. Meta Ethics - is the study of the nature of ethics. It considers where one’s ethical principles “come from, and what thay mean”. 2. Normative Ethics – is the study of ethical actions. It deals on the practical side of the ethics. It tells people what to do and what not to do. 3. Applied Ethics – is the study of how we should act in specific areas of our lives. WHAT IS BEHAVING ETHICALLY? Ethical behavior is doing what is morally right. Subjective Concept IS ETHICS THE SAME AS BEING LAWFUL? Ethics: About what is right and what is wrong Lawful: About what is lawful and what is unlawful CODE OF ETHICS FOR CONDUCT AND ETHICS p r o v i d e s s t a n d a r d s for p r o f e s s i o n a l a n d e t h i c a l b e h a v i o r , as w e l l as articulate a c c e p t a b l e a n d u n a c c e p t a b l e c o n d u c t a n d pra ctic e s in internal and external dealings It e x p l a i n s w h a t b e h a v i o r is e x p e c t e d of a ll e m p l o y e e s a n d p r o v i d e s t h e s t a n d a r d s t h a t g u i d e t h e w o r k of t h e c o m p a n y a n d h o w t h e e m p l o y e e s s h o u l d relate to customers, competitors, vendors, a n d to other employees. shall cover a n d apply equally to all employees. ✓ F a i l u r e to c o m p l y w i t h t h e s t a n d a r d s c o n t a i n e d in t h e C o d e w i l l r e s u l t in d i s c i p l i n a r y a c t i o n , i n c l u d i n g t e r m i n a t i o n of e m p l o y m e n t. ✓ In s o m e cases, c i v i l a n d c r i m i n a l a c t i o n s are w a r r a n t e d. ETHICAL PRINCIPLES AND VALUES 01 02 03 04 Accountability Integrity Fairness Transparency Acting righteously, Uphold the value Uphold the value of Taking full morally and legally of justice and fair truthfulness in responsibility for and under the everything we do business decisions, play amongst highest standards coupled with the actions/inactions, everyone we deal of ethics quality of being open and conduct. with both to scrutiny as we internally and provide and disclose externally. accurate material information in a timely manner. The commitments of the Company, its directors, officers, and employees in their behavior and business dealings are related to the following: ETHICAL REASONING is required in business for at least three reasons A third argument holds that ethical reasoning is necessary because complex moral problems require “an Second, freemarket and intuitive or learned regulated- market understanding and mechanisms do not concern for fairness, effectively inform owners and justice, [and] due managers how to respond to process to people, complex issues that have far groups, and reaching ethical communities consequences First, many times laws d o not cover all aspects or “gray areas” of a problem  TWO KEY INFLUENCES ON BUSINESS ETHICS These are the main ways in which business ethics get challenged as one undertake business: INDIVIDUALS CULTURE CONCEPTUAL FRAMEWORK OF CORPORATE ETHICAL DEVELOPMENT proponent : Eric Reidenbach and Donald Robin it is a conceptual model of ethical balance in business operations published in the Journal of Business Ethics in 1991 STAGE 1:The Amoral Organization Leaders of these organizations may take the view that unethical behavior is "the cost of doing business," and they may only address ethical considerations if something goes wrong. Organizations like this typically don’t last long. STAGE 2: The Legalistic Organization Organizations at this stage are preoccupied with following the laws and regulations that relate to their industry. They focus on complying with the letter of the law, rather than its spirit. These organizations have corporate values, and perhaps even a mission and vision statement. They often do the bare minimum needed to comply with the law. STAGE 3: The Responsive Organization Balance legality and productivity with ethics. They feel social pressure to act in the best interests of the public and the environment, and they respond to this. STAGE 4: The Emerging Ethical Organization This stage of organizations have started to experience a cultural shift Leaders now take a proactive approach to ethical and moral issues STAGE 5: The Ethical Organization These kinds of organizations have lived and breathed their ethics and core values. They still care about profit, but they choose lines of business that allow them to make a good profit at the same time as maintaining high ethical standards.  COMMON AREAS WHERE ETHICS ARE TESTED Advertising Presonal Selling Suppliers Contracts Pricing Benefits and Drawbacks of Operating Ethically for Business Organizations Benefits Drawbacks 1. Higher revenues 1.Higher costs 2.Improved brand and 2. Higher overheads business awareness and 3. A danger of building up recognition false expectations 3. Better employee motivation and recruitment 4. New sources of finance THANK YOU