SUBMITTED BY: SUBMITTED TO:

NAME: RAHIL NARANG ICAI BHAWAN

REG. NO: NRO0479921
BATCH NUMBER: (LUDHIANA BRANCH)
ICITSS-ITT-16
 Introduction to business ethics…………………………………………….3
 Meaning of business ethics……………………………….....4
 Definition of business ethics………………………………….5
 Nature of business ethics………………………………….....6-7
 Types of ethics………………………………………………….8-9
 Sources of ethics……………………………………………….10-11
 Importance of ethics…………………………………………..12-13
 General principles of business ethics……………………….14-15
 Conclusion……………………………………………………….16
INTRODUCTION TO BUSINESS ETHICS

 Business ethics is a subject of proper business policies and practices

regarding controversial issues such as corporate governance, insider trading,
bribery, discrimination, corporate social responsibility etc. Business ethics
are also known as Corporate ethics.
 Corporate ethics gives guidelines to a company to measure what is right and
what is wrong.the acceptability of business ethics can be determined by
customers, government regulators, competitors, interest group and many
more.
MEANING OF BUSINESS ETHICS
Business ethics is the accepted set of moral values and corporate standards of
conduct in a business organisation. Busniess ethics comprises the principles,
values and standards that guide behaviour in the world of business. Business
ethics can vary from one organisation to another because of differences in
cultural perspectives, operational structures and strategic orientations.

Three levels of business ethics:

1. The macro level: It is related to issues within the systems where business
operations including economic, political, legal and other systems.
2. The corporate level: It is related to company or corporate level in which
ethical standards are embedded in the policies and procedures of the
organisation.
3. The individual level: This includes individuals in the entity who are acting
on behalf of a business entity. It is a related to behaviour/ conduct of one or
more individuals.
DEFINITIONS OF BUSINESS ETHICS

 According to crane, “business ethics is the study of business situations,

activities and decisions where issues of right and wrong are addressed.”
 According to john, “ business ethics in short can be defined as the systematic
study of the ethical matters pertaining to the business, industry or related
activities, institutions and beliefs. Business ethics is the systematic handling
of the values in business and industry.”
 According to grublein: “business ethics is the set of corporate values and
codes of principles which may be written or unwritten by which is company
evaluates its actions and business related decisions.
NATURE OF BUSINESS ETHICS.
 Code of conduct: A code of conduct is asset of rules outlining the
social norms and rules and responsibilities of an individual, party
or organiszation.
 A discipline: it is the knowledge through which huan behaviour is
learnt in a business situation. So it is regarded as separate field of
study.
 Voluntary: Business ethics must be voluntary. The businessmen
must accept business ethics on their own. Business ethics must be
like self discipline.
 New concept: it is strictly followed in developed countries. It is
not followed properly in poor and developing countries.
Develpoed countries have more exposure to business ethics. ‘
 Related to human aspect: it is related to those activities,
decisions and behaviours which are concerned with human
aspect.
 Greater than law: Although the law approves various social
decisions but the law is not greater than ethics. Law is usually
related to minimum control of social customs where as ethics
gives importance to individual and social welfare actions.
 Business social relationship: Business ethics set the terms and
standard the social relationship of business. It indicates what
society expects from the business and what is thinks about the
business.
 Different from social responsibility: social responsibility mainly
relates to the policies and functions of an enterprise whereas
business ethics relates to the conduct and behaviour of
businessmen.
 Not against profit making: business ethics is not against fair
profit making. However, it is against profit by cheating and
exploiting consumers, employees or investors.
 Study of goals and means: business ethics is the study of goals
and means for the rational selection of sacred objects and their
fulfillment. It is the essential that goals and means should be
based on morals.
TYPES OF ETHICS
1. Metaethics: Metaethics is the study of the origin and
meaning of ethical concepts. It is a branch of analytical
philosophy that explores the status, foundations and
scope of moral values, properties and words. It involves
the examination of ethical terms such as justice and
morality as broad concepts for a society.
It covers various issues though two issues are prominent:
 Metaphysical issues concerning whether morality exists
independently of humans or not and
 Psychological issues concerning the mental basis of our moral
judgements and conduct.
2. Descriptive Ethics: Descriptive ethics are the morals
of a society. The category of descriptive ethics simply involves
describing how people behave and/or what sorts of moral
standards they claim to follow. It is possible for people in one
group to have a different set of morals than people in another
group. Descriptive ethics change over time.
 3. Normative ethics: Normative ethics is the study of the principles, rules or
theories that guide our actions and judgements to determine what is morally right
or wrong. Normative ethics imply what should be good or bad in a society. The view
of what is an acceptable ethic requirement subjectivity. Normative ethics
conflictwith descriptive ethics at times. An example of normative ethics is the
debate concerning abortion. Another example is the golden rule which states that
“we should do to others what we would want others to do to us.” since we do not
want our neighbour to steal our car, then it is wrong for us to steal their car.
4. Applied ethics: Applied ethics is the branch of ethics which consists of the
analysis of specific, controversial, moral issues such as abortion, animal rights, etc.
the applied ethical issues have been subdivided into groups such as medical ethics,
business ethics, environmental ethics, and sexual ethics. Generally speaking, two
features are necessary for an issue to be considered an “applied ethical issue.”
(a) firstly, the issue needs to be controversial where there are significant groups of
people both for and against the issue at hand. For example, the issue of gun control
is an applied ethical issue since there are significant groups of people both for and
against gun control.
(b) The second requirement for an issue to be an applied ethical issue is that it must
be a distinctly moral issue.
Sources of ethics
1. Religion: Religion is the oldest
source of ethics. Many religions exsist
across the whole world and all of them
agree on some fundamental principles.
Every religion gives an expression
what is right and wrong in business
and other spheres of life. Religion is
the basis of an individual that he
follows from his childhood and is
deeply rooted in his behaviour. He
understands about their fair and
unfair, badness and goodness of
actions and the consequences of these
actions. The principles of
reciprocity, exchanging things with
others for mutual benefits is seen in all
religions.
2. Culture: culture is the set of important understandings that members of a
community share in common. It consists of a basic set of values, ideas, perceptions,
prefrences, concept of morality, code of conduct etc. which creates distinctiveness
among human groups. Culture is passed from generation to generation. When we
talk about culture, we typically refer to the pattern of development reflected in a
society pattern of knowledge, ideology, values, laws, social norms and day to day
rituals. Depending upon the pattern and the stage of development, culture differs
from society to society.
3. Law: Laws are procedures and codes of conduct that are laid down by the legal
system of the country. The legal system of any country guide the human behaviour
in the society. Whatever ethicas the law defines, are biding on the society. In
business, complying with the rule of law defines, are binding on the society. In
business, complying with the rule of law is taken as ethical behaviour. The society
expects the business to abide by the law. Although it is expected that every should
abide by the law. Although it is expected that every business should abide by the
law but organisations often break laws by tax evasion, hoarding, adulteration,
poor quality & high priced products, environment pollution etc.
 Importance of business ethics

 Reduced business malpractices- when business ethics is put in the practice, it

will stop the business malpractices. Not all the businessmen are involved in the
business malpractices, but there are some immoral businessman doing business
malpractices.
 Creates good image and improve customers confidence: business ethics are
very important in increasing customer confidence about the quality of products,
price of products and other products that are offered by the company or an
organisation.
 Customer satisfaction: the consumer gives a lot of contribution in the market.
Without consumer, the business cannot survive in the market. In business
transaction, user or consumer satisfaction must be taken seriously.
 Protecting employees and shareholders: In business ethics, it is required to
protect the interest of employees, shareholders, dealers, suppliers, and many
more from exploitation through unfair trade practices.
 Credibility with the employees: when the employees are convinced of the
ethical values of an organisation they are working for, they hold the
organisation in high esteem. It creates common goals, values and language.
 Loyal investors: investors are concerned about ethics, social responsibility and
reputation of the company in which they invest. Investors are becoming more
and more aware that an ethical climate provides a basis for efficiency,
productivity and profits.
 Healthy competition: healthy competition will exsist in business when the
businessman implements business ethics while dealing with the competitors.
For example, the businessman will avoid monopoly in business when there is
competition in the market and practice the business ethics.
 Better decision making: decision making will be better if the decisions are in
the interest of public, employees and companys own long term good.
General principles of business ethics

 Honesty: Ethical executives above all should be honest and worthy of trust. Ethical
executives should be honest and truthful in all their dealings and should not deliberately
mislead or cheat others by misrepresentations or any other means.
 Integrity: integrity refers to a wholeness of character demonstrated by consistency
betweem thoughts, words and actions. Ethical executives should demonstrate personal
integrity by doing what they think is right even when there is great pressure to do wrong
things.
 Loyalty: ethical executives should be loyal to the persons and institutions theyd eal with
fully devoted to their duty.
 Fairness: ethical executives should be fair and just in all the dealings. They should
neither exercise power arbitrarily nor take undue advantage of anothers mistake or
difficulities. Fair persons ensure a commitment to justice, the equal treatmenr of
individuals, tolerance for and acceptance of diversity.
 Law abdidng: Ethical executives should be law abiding by the laws, rules and
regulations relating to their business activities. Law abdidng by the executives will
motivate the employees to abide by the code of ethics of the business organisation.
 Leadership: Ethical executives should be conscious of the responsibilities and
opportunities of their position of leadership. They shouldseek to positive ethical role
models for the employees by their own conduct and help to create an environment in
which principled reasoning and ethical decision making are highly valued.
 Commitment to excellence: ethical executives should pursue excellence in
performing their duties. They should be well infored and prepared and constantly
work to increase their proficiency in all the areas of responsibility.
 Reputation and morale: ethical executives should understand the importance of
their own and their companys reputation as well as the importance of the pride and
good morale of the employees.
 Promise-keeping & trustworthiness: ethical executives should be worthy of trust.
They should be trusted for supplying relevant info. And keeping their promises and
commitments.
 Conclusion.

 Ethics is the branch of philosophy concerned with the meaning of the all aspects
of human behaviour which is right or wrong. Ethics is the branch of social
science.
 The scope of ethics indicates its subject matter. Ethics are applied equally in
every field of business whether it is compliance, accounting or finance, human
resource management, marketing management, production management and
authority.