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Business Ethics

Content
Business Ethics: An overview
Framing Business Ethics- CSR, stakeholders
and Citizenship
Ethical theories
Tools and Techniques of Business Ethics
Management, Role of various agencies in
ensuring ethics in corporation
Contextualizing Business Ethics- Corporate
Governance, Accounting and finance
Content Contd
Employees and Business Ethics
Consumers and Business Ethics
Suppliers, Competitors and business ethics
IT and Ethics
Environment and Business Ethics
Civil Society and Business Ethics
Government, Regulation and business ethics
Business Ethics: An overview
Adapted from Business Ethics by Andrew Crane and Dirk Matten (2nd edition)- OUP
Module 1: What is Business Ethics
Module 2: Why Business ethics is important
Module 3: Business Ethics in different
Organizational contexts
Module 4: Globalization: key context for
business ethics
Module 5: Sustainability: A goal for business
ethics
What is Business Ethics?
What is business ethics?
Business ethics is the study of business
situations, activities, and decisions where issues
of right and wrong are addressed.

The term business ethics is used in three different


senses:
ethics in business
business ethics as a movement
business ethics as part of the general field of ethics.
What is business ethics? Contd..
Broadly, ethics is the discipline that examines
ones moral standards or the moral standards
of a society to evaluate their reasonableness
and their implications for ones life.
Business ethics is a specialized study of moral
right and wrong that concentrates on moral
standards as they apply to business
institutions, organizations, and behavior.
Why is business ethics important?
Why is business ethics important?
1. Power and influence of business in society
2. Potential to provide major contribution to society
3. Potential to inflict harm
4. Increasing demands from stakeholders
5. Lack of business ethics education or training
6. Continued occurrence of ethical infractions
7. Evaluating different ways of managing business
ethics
8. Interesting and rewarding
Defining morality, ethics and ethical
theory
Morality is concerned with the norms, values
and beliefs embedded in social processes
which define right and wrong for an individual
or a community.
Ethics is concerned with the study of morality
and the application of reason to elucidate
specific rules and principles that determine
right and wrong for any given situation.
These rules and principles are called ethical
theories.
Types of Ethical Issues
Systemicethical questions about the social,
political, legal, or economic systems within
which companies operate.
Corporateethical questions about a
particular corporation and its policies, culture,
climate, impact, or actions.
Individualethical questions about a
particular individuals decisions, behavior, or
character.
Business Ethics
Globalization: a key context for
business ethics?
Globalization: a key context for
business ethics?

Globalization is a process which diminishes


the necessity of a common and shared
territorial basis for social, economic, and
political activities, processes, and relations.
Ethical impacts of globalization
Adapted from Business ethics- Crane and Matten (2nd ed)OUP

Globalization provides potential for greater profitability, but also greater risks. Lack of
Stakeholders regulation of global capital markets, leading to additional financial risks and instability.

Corporations outsource production to developing countries in order to reduce costs in


Employees global marketplace - this provides jobs but also raises the potential for exploitation of
employees through poor working conditions.
Global products provide social benefits to consumers across the globe, but may also meet
protests about cultural imperialism and westernization. Globalization can bring cheaper
Consumers prices to customers, but vulnerable consumers in developing countries may also face the
possibility of exploitation by MNCs.
Suppliers & Suppliers in developing countries face regulation from MNCs through supply chain
competitors management. Small scale indigenous competitors exposed to powerful global players.
Global business activities brings the company in direct interaction to local communities
Civil society
with possibility for erosion of traditional community life; globally active pressure groups
(NGOs, etc) emerge with aim to police the corporation where governments are weak and tolerant.

Government & Globalization weakens governments and increases the corporate responsibility for jobs,
regulation welfare, maintenance of ethical standards, etc. Globalization also confronts governments
with corporations from different cultural expectations about issues such as bribery,
corruption, taxation, and philanthropy.
Europe N. America Asia
Who is responsible for ethical Social control by the The individual Top management
collective
conduct in business?
Who is the key actor in business Government, trade The corporation Government,
unions, corporate corporations
ethics? associations
Negotiated legal Corporate codes of
What are the key guidelines for framework of
Managerial
ethics discretion
ethical behaviour? business
Social issues in
What are the key issues in Misconduct and Corporate
organizing the
immorality in single governance and
business ethics? framework of
decisions situations accountability
business
What is the dominant Formalised multiple Focus on Implicit multiple
stakeholder approach shareholder value stakeholder
stakeholder management approach, benign
approach? managerialism
Adapted from Business ethics- Crane and Matten (2nd ed)OUP
Business Ethics
Sustainability: a key goal for business
ethics?
Sustainability: a key goal for business
ethics?
Sustainability refers to the long-term
maintenance of systems according to
environmental, economic and social
considerations
The three components of sustainability

Adapted from Business ethics- Crane and Matten (2nd ed)OUP


Triple bottom line
Coined by John Elkington
Bottom line thinking suggests sustainability as
a goal
Three dimensions:
Environmental perspectives
Economic perspectives
Social perspectives