By Lakshmi.

H
Meaning of ethics
Definition: term ethics- derived from the
Greek word Ethikos- meaning conduct,
custom or habit. It consist of standard or
code of behavior of a group. Eg: killing-
immoral- police encounter
Morality- individual character & disposition
By Lakshmi.H
Business Ethics
Biz ethics is the systematic analysis of ethical principles pertaining to biz,
industry, commerce, trade & other related activities, institutions, beliefs &
practices
Biz ethics is evaluation of biz in terms of certain ethical principles &
norms
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Relation between Ethics & Biz Ethics
3 inter relations:
1. Concepts of Deonticism(kant- German philosopher-
governed by certain dos & donts- no matter- led to
max happiness or gain), Utilitarianism (any action that
leads to max benefits & happiness of greatest number of
ppl in society), Consequentialism(human actions- good
for society @ large- good actions- outcome of the action
on the society- important- if consequences are good- can
be implemented- else no ), morality, values (persons
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believes in critical value. Eg: Gandhi- truth, ahimsa, Jesus- Love, Mother Teresa-love
through service) & virtues (acquired mental disposition- forms a part of character-
reflected in behavior- deliberate choice not- congenital- acquired. Eg: honest, courage)
2. Ethical theories- provides certain analytical guidelines & moral standards- directly or
indirectly applied to solutions to biz problems
3. Ethical theories- contribute to ethical decision making, solving ethical dilemmas & so
on

By Lakshmi.H
Evolution of Biz Ethics
History- 12
th
century- lending money for interest- unethical, ppl- do not work- not eat
Capitalism- labor was sacred duty towards God.
Industrial revolution- accumulation of riches- no matter of turmoil & trouble
Discipline- later Confucianism- hard work, sincerity & hardwork
India- 20
th
century- bizman- wealth accumulation- later social fold
Anti religious philosophy- exploitation of labor- Max weber
Free market philosophies- social & economic benefits- ethical
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Benefits of free market philosophies:
1. Market ethics: social benefits- human selfishness- all sellers- products & services- social
welfare- supported by Adam Smith
2. Competition & market price: generates surplus for producers & consumers- positively
benefits the society
3. Expansion of biz renders free choice & liberty: growth of technology & different choice of
production & production methods
4. Free market philosophy maximises individual freedom & utility: better utilization of social
& individual potential- higher employment opportunities-overall economic growth

By Lakshmi.H
Nature of Biz Ethics
1. Subject is analytical. Normative (ethical norms & standard practices) & positive
science
2. Diagnostic in nature- various aspects of biz dela, operations & management
techniques- analysed
3. Evaluative
4. Prescriptive- provides solution- eradicate unethical behavior
5. Set moral standards in biz: guiding principle- employees, employers public etc
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Scope of Biz Ethics
Scope of biz ethics- vast:
1. Ethical responsibility of biz
2. Unethical practices- HR, marketing, Finance, IT
3. Ethical resp- employees, customers, suppliers, stakeholders
4. Ethical leadership & social responsibilities
5. Ethical decision making
6. Ethical issues in CG
7. Ethical biz strategy
8. IB ethics
9. Ethical audit
10. Professional ethics



By Lakshmi.H
Need & Purpose of Biz Ethics
Necessary to give guidance- uphold the
interest of stakeholders- including
consumers, shareholders, suppliers,
distributors & investors
Necessary- to remind moral duty of
firm- undertake social responsibilities
Objectives are:
1. Teaches ethical stds & values to biz
2. Concerned with application of ethical stds to
biz
3. How to run biz in ethical lines
4. Helps to identify- areas- unethical practices-
ethical code
5. Helps firms to make biz decisions & strategy-
morally fair, just & consistent

By Lakshmi.H
Importance of Biz Ethics
Biz ethics- 2 classification- micro & macro aspects
Micro aspects: private & professional life of a manager or CEO
Macro aspects: wider dimensions- policy making settle of conflicts, operational aspects.
Unethical practices- confronted, discrimination- immoral competition, cheating
Biz behavior- macro perspective- run biz successfully
Importance & significance of biz ethics are:
1. Broad framework for guidance- run biz
2. Trusted by all stakeholders (customers, employees, suppliers etc)
3. Improves social image

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4. Improves & strengthens OC
5. Solid foundation for future
6. Generate sense of empowerment- employee & stakeholders
7. Companies- strong team work
8. Avoid work related conflicts

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Sources of Ethical Knowledge for Biz
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6 primary sources of ethical knowledge
Roots of Unethical Biz Practices
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Corruption
Ethical Decision Making in Biz
Ethical decision- no of factors- involved in biz. 2 set of factors: Organizational &
Individual factors
1. Organizational Value:
Greater influence- decision making than individual factors. Composed of group of persons-
diff background & family circumstances.
Org. values- predominates- orientation or predisposition
Orientation- vision & mission. OC set of shared values, goals, beliefs & attitude. Eg: whistle
blowing in Ranbaxy 2013
If ethical base- strong- decision making- prominent. Eg: mgr- ethical- influence team mbrs-
ethical decsion making, proper usage of reward & punishment technique

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2. Personal disposition:
Gender: survey women are more sensitive- towards- ethical issues than men
Age structure: elderly managers- more - ethical issues & CSR
External & internal factors: relationship b/w profit & ethical decision making
Education level: formal & informal education- ethical sense
Ethical leadership: as leader so the employees
Rules Vs. Discretion: set of rules- ethical decision making
Personal values in DM: caring for others, fairness & justice, commitment to social
responsibilities, sense of trusteeship & duty, good citizenship
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Benefits of managing ethics at workplace
1. Attention to biz ethics has substantially improved the society: child labor- HR policies
for employees-
2. Ethical programs helps to maintain a moral course in turbulent times: employee
management, resolving conflicts
3. Cultivates strong teamwork & productivity: motivation & performance
4. Supports employee growth & meaning: helps employee to face good & bad situations-
ethical system- moral boost
5. Are an insurance policy: ethical principles- lawsuits. Clear cut policies- failure to
comply- implication
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6. Help avoid criminal acts of omission & can lower fines: detect unethical issues. Eg:
biz dealings with defense- penalties for ethical obligations
7. Helps to manage values associated with quality management, strategic planning &
diversity management: effort includes- identifying preferred values, behavior- aligned
with values. Eg: Japanese firms. Diversity programs- recognizing & acknowledging
different values
8. Promote strong public image: Johnson & Johnson- Tylenol case, Infosys, Biocon
9. Overall benefits: improves trust relationships b/w individual & organizations, greater
consistency in standards of products/ service
By Lakshmi.H