Introduction of Business Ethics

What is Ethics?
Ethics is the branch of philosophy that focuses on morality and the way in which moral principles are applied to everyday life. Ethics has to do with fundamental questions such as What is fair? What is just? What is the right thing to do in this situation? Ethics involves an active process of applying values, which may range from religious principles to customs and traditions.

What is ethics?
In latin called ethicus In Greek is called ethikos come from ethos Meaning of ethics is character or manners. Ethics is science of morals, moral principles, recognized rules of conduct The character of a man is expressed in terms of his conduct.
Can be termed as good or bad, right or wrong, moral or immoral

Ethics
Its Dictionary meaning is System of moral principles, rules and conduct The origin of this word is from ETHOS which means Character. Ethics has been defined as ability to distinguish between right and wrong and to act accordingly.

What is business ethics?

Business ethics focuses on what constitutes right or wrong behavior in the world of business. Corporate business executives have a responsibility to their shareholders and employees to make decisions that will help their business make a profit. But in doing so, businesspeople also have a responsibility to the public and themselves to maintain ethical principles.

Requirements of Ethics in Organization

Clear Vision Open Communication Ethical Teams Commitment to Ethics

Ethical Decision
Equitable (Justice to all) Morally Correct Good & Fair Appropriate to the Situation.

Example
A secretary who has worked for your corporation for fifteen years is involved in a car accident in which she permanently loses the use of her right hand. Thus, she can no longer effectively type, file, or perform many of the other functions that she previously had performed and that are included in her job description.

 Your corporation has a very tight budget and does not have sufficient funds to pay for an additional secretary without reallocating budget items. The injured secretary has been very loyal to your corporation, and you have been very satisfied with her work and dedication. She wants to stay at her job.

 Moreover, she does not believe that she could find other employment at this time. Should your corporation fire her, lay her off with compensation, or find a way to retain her?

Code of Conduct Formal statement that defines how the organization expects and requires employees to resolve ethical questions.

Codes of conduct cannot detail a solution for every ethical situation, so corporations provide training in ethical reasoning.

Helping employees recognize and reason through ethical problems and turning them into ethical actions.

Executives must demonstrate ethical behavior in their actions.

Scope of Business Ethics

(A)Societal Level (B) Stakeholders level Customers Employees Shareholders Banks and Other Financial Institutions Government (C) Internal Policy Level (D) Personal Policy Level

(A)Societal Level
Concern for poor and down trodden (compressed). No Discrimination against any particular section or group. Concern for clean environment Preservation of Scarce Resources for Posterity. Contributing to better quality of life.

(B) Stakeholders level

1. Employees Security of Job Better working Condition Better Recommendation Participative Management Welfare Facilities

2. Customers Better Quality of goods Goods and services at reasonably price Not to corner stocks and create securities. Not to practice Discriminating pricing Not to make false claims about products in advertisements.

3. Shareholders Ensure Capital appreciation Ensure Steady and regular Dividends Disclose all relevant information Protect minority shareholders interests Not to window dress balance sheets Protect interest in times of Mergers, Amalgamations and Takeovers

4. Banks and other lending Institutions Guarantee Safety of borrowed funds Prompt repayment of loans

5. Government Complying with Rules and Regulations Honesty in Paying Taxes and other dues Acting as partner in the progress of the country

(C) Internal Policy Level

Fair Practices relating to recruitment, compensation, perks, promotions, etc Transformational Leadership to motivate employees to aim at better and higher things in life. Better communication at all levels.

(D) Personal Policy level

Not to misuse others for personal ends Not to indulge in politics to gain power Not to spoil promotional chances of others Not to use office car, stationery, and other facilities for personal use. Not to fall prey to shortcuts and easy money Promise keeping No violence Mutual help

Nature of ethics
1st , ethics deals with human being only 2nd, ethics becomes a set of systematic knowledge about moral behavior and conduct. 3rd , ethics is a normative science. judge the value of the facts in terms of an ideal. 4th , ethics deals with human conduct, is voluntary and not forced by persons or circumstances.

Three cs of business ethics

The need for compliance of rules
Laws, Principles of morality, the customs of community Policy of the company and fairness

The contribution business can make to society through

The core value Quality of ones products and services By providing jobs to employees Usefulness of activities to surrounding community QWL(Quality of Work Life) influence by ethical and moral values.

 The consequences of business activity

Towards environment inside the plant and outside the organization and community Social responsibility towards shareholders, bankers, suppliers, customers and employees of organization Good public image

Benefits for students( young manager)

Ability to reason Resolving ethical issues Responsible tone for the organization Provide reliable managers Manager to realize their social responsibility Beat high level of integrity in managers Create awareness of social and moral values

Ethical concepts
Ideal code of moral principles How people behave, act and conduct themselves ?

Features of Business Ethics

+ Features (Hyperlink) +From Litho pg 4

Importance of Business Ethics

From Litho Pg. 6