SOLOMON ISLANDS NATIONAL UNIVERSITY

BU671: BUSINESS ETHICS & CORPORATE GOVERNANCE

SEMESTER 2, 2018

LECTURE 3/Topic 3:
ETHICAL THEORY AND BUSINESS PRACTICE
15Aug2018
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• Announcements:
• Assignment 1
• ready now and due on 31st August. Collect and start work now!

• Class Periods:
• Lecture: Wednesday, 11.30am-12.30pm, Lecture Theatre
• Tutorial: Group (A/B), Friday 8am to 10.15am, Ex Library
• Tutorial: Group (C), Friday 10.30-11.30am, B2

• Course Assessment:
• Assignment 1: 15%:
• Assignment 2: 15%:
• Tutorials (attend and participate): 5%
• Test: 15%
• Final Exam: 50%
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Explain the following:

Norms
• These are informal (unwritten rule) understandings that govern/shape the
behaviour of members of the society so that members enjoy order.
• Anything that most members of a group consider to be normal, right
correct, proper, and appropriate.
• Examples?
• Use the word “Please” or “Thank you”; Join the queue, don’t jump it;
dress properly a situation you in; say “sorry” if you bump into someone;
pay tribute to someone being dead; etc.
• People need to subconsciously follow it for working together and order.
Defiance will cause uneasiness and draws attention.
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Explain the following:

Goals
• Description of a destination or the “end point of a race.”
• Abstract and general unlike objectives which are narrow and measureable
and timed.
• Long term outcomes you or your organisation want or need to achieve.
• Example?
• E.g: I will become a Manager of the Company one day
• E.g: I must work hard to inspire my colleagues
• E.g.: I will get an A+ in this course
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Persons and relationship

• Humans are complex and complicated animals due to different background,
different rearing up, cultures, families, habits etc.
• Creating CLOSE relationships formed by emotional and interactions
between persons. These are vital and top priority due to:
• They produce kindness, respect, commitment, trust, Honesty (VALUES IN LIFE)

• Need for a mutual affiliations and connection that will lead to mutual
understanding, respect, peace, team spirit, fun, oneness between individual
• Example?
• sponsoring tea at tea break, greeting/smiling to colleagues, etc.
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Importance of Business Ethics (BE) in the Modern World

• BE’s are important ingredients of the modern business practices for the
purposes of maintaining its competition, reputation, profitability and
survival in the long run;
• Every decision made (by individual or group) will be determined by the
culture of the firm or company
• Employees must abide by the workplace ethics to protect and respect
the business assets
• The UNDESIRABLE major by-product of doing business is rising:
• corruption, favoritism and nepotism, deterioration of human values,
series of scam in business, govt. policies and society
• Ethical issues are more critical today than they have ever been.
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The Traditional Western Philosophical Theories about Ethics:

Aristotle and the virtues
• Aristotle – (384BC to 322BC) a Greek philosopher who’s one of the greatest
thinkers in politics, psychology and ETHICS.
• Virtue is a disposition (mood or character) to behave in the right manner and
as a mean between extremes of deficiency and excess, which are vices (sins).
• Two overriding virtues: INTELLECTUAL & MORAL
• Intellectual Virtue – acquired through education and inheritance
• Moral Virtue – imitation of habit and practice, not reasoning & instruction
• Twelve (12) Virtues:
1. Courage – bravery and valor
2. Temperance – self control and restraint
3. Liberality – generosity, charity and bigheartness
4. Magnificence – radiance
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The Traditional Western Philosophical Theories about Ethics:

ARISTOTLE & THE VIRTUES
• Twelve (12) Virtues: (continues)
5. Pride – self satisfaction
6. Honour – respect, reference, admiration
7. Good Temper – equanimity, level headedness
8. Friendliness – conviviality & sociability
9. Truthfulness – straightforwardness, frankness & candor
10. Wit – sense of humor/fun – meaninglessness & absurdity
11. Friendship – Camaraderie & companionship
12. Justice – impartiality, evenhandedness & fairness
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The Traditional Western Philosophical Theories about Ethics:

EMMANUEL KANT & DEONTOLOGICAL THEORIES
• Emmanuel Kant (1724-1804) – one of the most Western influential
philosophers in Physics, Epistemology, aesthetics and ETHICS.

• Rightness or wrongness of actions does not depend on the

consequences but on whether they fulfill our duty.
• It is the motivation behind our actions that governs or determines
whether these actions are good or bad, rather than the outcome.
• Example?
• If Ken drowns Gwen in order for him to survive, it is ethical.
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The Traditional Western Philosophical Theories about Ethics:

JOHN STUART MILL’S UTILITARIANISM
• Utilitarianism – argues that the rightness or wrongness of an action should be
judged by its consequences
• Utilitarianism ethics – to promote greatest happiness for the greatest number.
• JSM (1806-1873) - British philosopher, political economist & civil servant
• Ethics: good/right action leads to pleasure and define good character. People
therefore perform actions for social utility or satisfaction.
• Right action leads to highest pleasure or well being (“highest pleasure” is the
consequence)
• Example?
• It is ETHICAL that if more money make people happy, provide them with good job
and prosperity.
• If smoke-free zone gives more comfort to most of the colleagues, stop smoking in
the office, or bus, etc.
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How Basic Moral Values Affect Business:

Respect; responsibility; integrity; personal growth; liberty;
justice; beneficence.
• Moral Values guide people towards feeling committed to perform
their roles in office and take pride in what they are doing, thereby
enhancing the company to progress, prosper and exhibit reputation in
the society.
• It is these values that can be turned into Ethics
• The true value of ethical behavior and application can be found by
combining ethics and values
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The Systems of Relationship
A. Threat systems
• “You do something I want, or I will do something you DON’T want.”
• And negative action of A can affect B (threat to B) adversely affect the former
(B) and may cause unstable relationship in the long run, thereby causing
violence.
B. Exchange systems
• “You do something I want, and I will do something you want.”
C. Integrative systems
• I do something for you because I want to, NOT because you want me to do it
for you, or you threaten me to do it.”
• This is Love system!
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Justice and Economic Distribution

Ethical Question
• Should people be rewarded according to how hard they work or how much
they have contributed?
• Justice fights FAIR treatment for all, that they get what they deserve
• Treat people on the moral of equality
• We need to raise moral issues when distributing social benefits and burdens:
I. Wealth
II. Income
III. Status
IV. Power
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END!