University of Technology, Jamaica

School of Business Administration

Business Ethics
2011-12, Semester 11

Relevance of Ethical Behaviour in Business

Ethical Reasoning: why bother about ethics?

i. To define boundaries of acceptable and unacceptable behaviour: lapses can result in loss of
customer confidence, increased government regulations and huge fines
ii. To save lives and protect the environment: society and the environment are like a chain
iii. Laws are insufficient and do not cover all aspects or gray areas of a problem
iv. Free market and regulated market mechanisms do not effectively inform managers how to
respond to issues and crises that have far-reaching ethical consequences
v. Complex moral problems require and intuitive or learned understanding and concern for fairness,
justice, due process for people, groups and communities
vi. Company policies and procedures are limited in scope and detail concerning human,
environmental and social costs in doing business

Moral Responsibility
Humans are hardwired with moral and ethical fibres: relationships and personal reputations matter; trust;
integrity

Sources of human actions:

Pursuit of self-interest: making choices only on the basis of cost/benefit analyses (economic)
Moral commitments: lost and found; strangers in distress; donation of body organs (moral
concerns)

Corporate Social Responsibility (CSR)

The obligations a business assumes toward society; to be socially responsible is to maximise positive
effects and minimize negative effects on society

Economic perspective: responsible to stakeholders (any party – customers, employees, suppliers,

the government, the community – who has a stake in what the organisation does and how it
performs); employees can strike; customer boycott of products; bad publicity brought about by
public protest

Duty-based perspective: Doing the right thing, caring about justice and stakeholder rights; quality
products contribute to society’s welfare; human resource practices that treat employees fairly
and thereby increase/maintain productivity; manufacturing processes that protect the
environment
Four kinds of responsibility:
Economic: primary role to produce goods and services for customer satisfaction in order to make
a profit –financial viability
Legal: executing the law of the land and government regulations
Ethical: not every can be codified, so doing what’s right and avoiding harm
Philanthropic: voluntary and discretionary activities that promote human welfare or goodwill