BUSINESS ETHICS

INTRODUCTION

Ethics describes minimum standards of

behaviour towards others, such as not
telling lies, not breaking promises not
stealing etc.
The word ethics is derived from the
Greek word Ethikos and latin word
Ethicus mean custom or character. The
concept of ethics deals with human
beings. Hence it is a social science.

In the words of Peter Drucker, Ethics deals

with right actions of the individuals.
It refers to a system of moral principles.- a
sense of right and wrong and goodness and
badness of actions and their motives
consequences.
Business ethics refers to a code of conduct
which businessmen are expected to follow
while dealing with others and also fellow
businessmen.

Business ethics suggest that dealings

with all social groups should be honest
and fair.
In case of customers, businessman
should avoid unfair trade practices. In
the case of shareholders correct
information about financial position,
current status and future prospects of
the company should be given through
company reports.

DEFINITION OF BUSINESS ETHICS

Dr. C.B. Mamoria and Dr. Satish

Mamoria, defines business ethics as
businessmans integrity so far as his
conduct or behaviour is concerned in
all fields of business as well as towards
the society and other business.

FEATURES OF BUSINESS ETHICS

Refers to code of conduct

Business ethics has universal
application
Ethics and profits
Values help better decision making
Needs willing acceptance
Education and guidance required for
introduction

Provides basic framework for business

Provides protection to social groups

NEED FOR BUSINESS ETHICS

Improves consumer confidence

Helps in checking business
malpractices
Making business conscious of social
responsibilities
Protecting consumer rights and social
welfare
Protecting social groups
Developing cordial relations between
business and society

UNETHICAL BUSINESS PRACTICES

Supplying inferior quality goods to consumers

Charging high prices by creating artificial scarcity
for profit maximisation
Giving false and misleading advertisements
Adulterations
Misbranding, Black marketing
Use of unfair sales promotion techniques
Paying low wages, providing inferior quality
welfare facilities and indecent treatment to
employees

Lack of safety measures for employees

Paying low rate of dividend
Avoiding payment of taxes as per
existing laws.

ETHICAL DILEMMAS

Dilemma is a situation for any decision

where we are uncertain of two
alternatives we should choose, in
otherwords its when it is difficult
decision.

The ethical dilemmas comes from three

sources: face-to face ethics, corporate
policy ethics and functional area ethics

FACE TO FACE ETHICS

There is always a human side to every

business. Managers conduct their
duties with human touch. While doing
so they face ethical dilemma of being
called unprofessional.

Corporate policy ethics: while making

ethical decisions mangers face ethical
dilemma. Eg. A subordinate.
Functional area ethics:

HOW TO RESOLVE ETHICAL

DILEMMAS

To study what is the problem

Who are involved in the problem
Get additional information to solve the
problem
To study conflicting views

To find possible solutions to resolve the

conflicts
To study outcomes of each one of the
solutions
To evaluate each solutions
Eliminate solutions which are harmful
or violating org. values
Select and implement best solution to
solve the problem.

CORPORATE CULTURE /
ORGANISATION CULTURE

Corporate culture is a blend of ideas,

customs, traditions, company values
and shared meaning that help define
normal behaviour for everyone works in
a company. Every organisation has a
culture and it exrcises considerable
influence on employee behaviour and
work performnce.

FUNCTIONS

Corporate culture creates distinction

between one organisation and the
other.
It conveys sense of identity for
organisation members.
It enhances the social system stability.
It is the social glue that help hold the
organisation together by providing
suitable standards for the behaviour of
organisational members.