ETHICS

&
BUSINESS
 NATURE OF BUSINESS
ETHICS
The Nature of Business
Business is as old as human civilization.
in the beginning of human existence, men took care of their
own needs and wants.
they hunted animals and cultivated the land for food and
clothing, and people simply provided for their own.
some people sought their products and services so that they
need not spend more time, money, and effort to acquire these goods
that they need.
 the manufacturer then found out that he could continue
supplying the products or services to people if he had enough funds
or goods to barter with.
he learned that he could expand his trades if he was able
to acquire more capital needed to continue his entrepreneurial
activities.
the more he acquired funds, the more he is able to supply
goods and services to his cutomers.
the requirement therefore is for him to earn profit in order
to stay in business and provide the goods and services needed by the
customers.
For as long as people have needs and wants, there will always
be business.

Those who have capital will continue to produce and sell

goods and services that will satisfy the needs and wants of
customers.

Business is an activity that is part and parcel of human society.

Society will not exist without business.
Since business is an integral part of society, its activities must be
examined from the ethical perspective, in the same way that society
examines politics, economics, government, culture, and religion
from the moral point of view.

The fundamental reason for examining the activities of business

from the moral perspective:
for the promotion of the common good
protection of the individuals interests
the preservation of the human society in general
Without Ethics, business will be a chaotic human activity
because there will be no common understanding and
agreement about what is wrong and right human conduct.

Business is also a complex activity that involves major

activities like production, manufacturing, marketing,
advertising, selling, purchasing, accounting, and the like.

Businessmen deal with suppliers, customers, workers,

employees, and even competitors.
It is within this structure of interaction of people that a lot of
questionable practices occur-misrepresentation, questionable
pricing policies, false advertising, misbranding, lying,
adulteration, unfair competition, and local price-cutting,
among others.

The bottom line is, somewhere, somehow peoples rights

are being violated, their values disrespected, and the interest
of the common good disregarded.
Business is a good human activity. It is the wrong
motive and personal interests of unscrupulous
businessmen that make business bad.
The Importance of Ethics in Business

The study of Business Ethics paves the way for common

ground in our understanding of the fundamental idea of what
is good and what is bad in our human conduct.
without Ethics, people, especially businessmen, will
set their own moral standards, moral rules, and moral
principles.
business people will consider some of their actions
good but unacceptable to others.
Example: cheating the customers may be acceptable for some
Ethics as a science does not only evaluate the morality of our
human conduct but also provides us with a common understanding
of the universal, objective, and irreversible moral principles that
govern our human conduct and guide our moral decisions.

Some business enterprises today are using quantitative

techniques to measure the viability and profitability of business.
However, the resolution on some ethical issues like sexual
harassment, bribery, ,misrepresentation, graft, insider trading, among
others, cannot be solved by quantitative techniques but by moral
reasoning.
Business Ethics opens a novel way of resolving moral issues
and ethical dilemmas in business and in the corporate world.

The study of Business Ethics will prepare and equip

managers for a more effective way of managing people and
organizations.
 THE BUSINESSMANS MYTHS
ABOUT BUSINESS ETHICS

Business, certainly is a good human activity. However, it is

the business leaders wrong perception of the role of Ethics
in business that affect their decisions, and in some cases,
forget to be ethical.
 MYTHS OF BUSINESSMEN
ABOUT BUSINESS ETHICS
Myth 1. Ethics is a Personal Affair and not a Public Debatable
Matter.
ones concept of morality is a result of the environmental
factors, like religion, culture and family values that have had a
great impact on the person however man is also a social being,
which means- he is always a being in relation with other men.
The individuals moral values may be very subjective but in
the exercise of this value system, he must also consider the impact
and gravity of his actions on others.
Myth 2. Ethics and Business do not Mix
Any business activity that is devoid of morality will bring
more harm than good to people in particular, and the society
in general.
Further, the belief that Ethics does not mix with business
will only justify illegal activities and will most likely promote
questionable practices in business activities.
Myth 3. Ethics in Business is Relative
the study of Ethics paves the way for our common
understanding of the fundamental ideas of right and wrong as
reflected in our human nature and our human conduct.

Myth 4. Good Business Means Good Ethics

The study of Ethics in business encourages businessmen and
managers to look closely into the end and the means of doing
business. The end does not justify the means.
Myth 5. Business is a War
for some business leaders and businessmen the market is
an arena of gladiators trying to fight for survival and vying for
the number one position. As an integral part of the society,
business must promote healthy competition and not destroy
the competitors.
 MORALITY VS. LEGALITY

What is legal may not necessarily be moral.

People tend to confuse legality with morality. An
action may be legal but not necessarily moral, e.g., capital
punishment (death by lethal injection). For some, this is legal
but in truth, this is immoral. Ethics provides us with a clear
distinction between morality and legality.
Laws are insufficient. They cannot regulate all aspects of our
human behavior.

Laws are sometimes absent or unclear in some areas of our

human conduct.

Ethics is the unwritten law, written in the hearts of men.

In the absence of the law, Ethics dictates the correct conduct to

follow.
Ethics and Law are closely related.
Ethics deals with morality, and when we speak of
morality, we mean primarily the moral law.

Law may be defined as crystallized ethics.

Law and morality presuppose the concepts of right and
wrong, good and bad, even the rules of conduct.
 DIFFERENCE BETWEEN
WHAT IS MORAL AND LEGAL
Law covers the external actions of man.
in the making of the law, the items covered in that
Law is the external action and behavior of a person.

Ethics speaks about the study of motivation and intention,

including the internal disposition of the person.
Many acts that would be widely condemned as
unethical are not prohibited by law
(Example: Lying or betraying the confidence of a
friend)
A man can commit adulteries in his mind, yet a
person is not legally or criminally guilty because the
exercise is innate within the person.
he may not be legally or criminally
responsible, but he is morally responsible.
Law is external-oriented while Ethics focuses on the
internal disposition of a person.
The essence of studying Business Ethics is to provide
managers and decision makers with a framework for the
resolution of moral issues and problems affecting business
activities and the organization.

Moral Reasoning is a process in which ethical issues and

problems are benchmarked against a moral standard so that
a moral judgment is made possible.
 Framework for Moral Reasoning

Moral Norm
Moral
Ethical Moral Standard
Judgment
Reality Company
Issues / Check Policy/Ethical
Problems Principle

Situation Problem Decision

Resolution
Analysis Analysis Analysis

Examples: -gravity of offense -company

Graft -frequency of rules/policies
offense -Moral or
Sexual -ethical
-harm done Immoral
Harassment -number of people
principles
-codes of -Legal or
Theft affected
-cost conduct Illegal
Bribery
-moral norms