Bus - Eth 1 New

Welcome
Diploma
Programme
Salalah College of Technology

Semester - II– 2010-11
BUSINESS ETHICS
Course Tutor : Dr.K.Raghu Ram
Dr.K.Raghu Ram, SCT. 2

Human Activities
1. Economic Activities
2. Non-economic activities
1. Economic Activities: These are concerned with
the production and distribution of goods and
services aimed at making money for living.
2. Non-economic activities: Activities undertaken

either for personal satisfaction or due to religious
or social obligations. Eg: Helping poor, giving
money for charity, etc.
What are Values?
 A value is a belief or philosophy that is

meaningful. They are the beliefs most
important to us.
 They are learnt early in life.
 They come from parents, friends,

schools and culture.

Basic Concept of Values
 Positive Values: Anything which is good for the individual or
society is called positive value. Eg: Mercy, justice, being truthful,
being fair with others etc.
 Negative Values: Anything which is bad for the individual or
society. Eg: Cheating, lying, stealing etc.
 Ethical Values: Ethical Values deal with what is ‘right’ and what
is ‘good’. Eg: Honesty, respect, being reliable and being fair.
 Non-Ethical Values: Non-ethical values deal with what we like
or desire. Eg: Money, fame and status.

Types of Values
1. Personal Values: Values possessed by the individual. These values
lead to action. It reflects a person's behaviour, attitude and character.
Personal values can be positive, negative, ethical and non-ethical, etc.
2. Social Values: Beliefs which are based on the welfare and well-being
of one particular society. This may include equality, justice, liberty,
and freedom, etc. Eg: Helping your friend, neighbour, fighting for
others.
3. Political Values: Ideological beliefs about the best way to govern a

country or organization, for example through welfare and social
responsibility.

Contd….
….Types of Values
4. Economic Values: Beliefs of the people about the money. Like

spending money in a correct way and charging correct price for the
product, payment of taxes etc.
5. Spiritual Value: These values come out from the relationship of

mankind with God. It includes the mode of worship, beliefs, etc. If a
person is very much strong in spiritual value, his action will be more
ethical.
6. Technical Value: It is based on science and physical facts. For

example, using nuclear science and other technologies for the benefit
of human being and not using the same for killing or harming
anything.

Contd….
….Types of Values
7. Legal values: These are based on the law of the country.

Example: following governments’ rules and regulations.
8. Aesthetic values: These are based on beauty and

neatness. Examples: not to destroy the colourful flower
and keeping the class room and office neat and clean.
9. Ecological value: It is based on living system and

environment. Examples: Not to pollute water and space
and not to pollute the environment.

Ethics
 The root of the word (Ethics) comes from the Greek word (Ethikos)
meaning “Character”.
 Oxford Dictionary defines Ethics as “the science of morals in human

conduct".
 Ethics may be defined as “structured set of norms and values by which we

distinguish between what is right and what is wrong, what is good and
what is bad, what is desirable and what is undesirable, what we should do
and what we should not do”.
 Ethics must be followed at every level in society; at home, at work place,

in sports, in business etc.
 From the above explanation, we notice that ethics focuses on:

 - Moral values
 - Usefulness to the society
 - Avoiding harmful effects to the society
 - Help in solving the problems of the society.

Business
 Business may be defined as an economic activity which
involves production or purchase of goods and services
for the purpose of sale at a profit.
 All business activities involve sale, transfer or
exchange of goods and services for some value. It
includes activities like manufacturing, trading,
transportation, banking, finance, insurance, etc.

What is Business Ethics ?
 study of business situations, activities and decisions where issues of
right and wrong are addressed.
 Business ethics is a specialized study of moral standards (i.e. what is
right or wrong) and how they apply to the organizations, companies
and to the individuals who work within the organizations.
 It also prescribes the values to be maintained while doing business.
 Business ethics is defined as the application of moral and ethical

standards to business situations. In another words, it is widely
accepted code of conduct of doing business.
 Examples: Not to sell food after expiry date, To give salaries regularly

Why Ethics are important ?
 To develop trust and confidence among the people
(Customers, employees and suppliers).
 To build a strong business with high growth.
 To become more successful
 To gain respect and reputation from Customers,
employees and suppliers

Principles underlying business ethics
1. UTILITARIAN Principle
2. INDIVIDUALISM Principle
3. MORAL Principle
4. JUSTICE Principle

1. UTILITARIAN PRINCIPLE
According to this principle, actions and policies

should be evaluated on the basis of costs and benefits
society receives.
So, a decision-maker should consider the effect of

each decision and select the one which is beneficial
for most number of people.

2. INDIVIDUALISM PRINCIPLE
According to this principle, morals promote the

individuals’ best long-term interests.
Example:
Example
Honesty, sincerity and truthfulness work best for
the individual in the long run.

3. MORAL PRINCIPLE
According to this principle, moral decisions are

those that best maintain the rights of the people.
Example:
1. The right to privacy
2. The right of freedom of conscience
3. The right of free speech
4. The right to due process
5. The right to life and safety
4. JUSTICE PRINCIPLE
This principle emphasizes the equitable

treatment of people and relies on concepts of
equity, fairness and impartiality.
1. Distributive Justice
2. Retributive Justice
3. Compensatory Justice

4.1 Distributive Justice
Distributive justice is related to distributing society’s

benefits and burdens fairly.
4.2 Retributive Justice
Retributive justice refers to the just (fair) imposition

of punishments and penalties on those who do wrong.

4.3 Compensatory Justice
It refers to the just way of compensating people for

what they lost, when they were wronged by others.
Hence every person should maintain ethics in his

personal life and Official life.

Define Business Ethics. Do you think
they are relevant today? Justify.

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Welcome

Salalah College of Technology

Course Tutor : Dr.K.Raghu Ram

Dr.K.Raghu Ram, SCT. 2

2. Non-economic activities: Activities undertaken

 A value is a belief or philosophy that is

 They come from parents, friends,

Dr.K.Raghu Ram, SCT. 4

Dr.K.Raghu Ram, SCT. 5

3. Political Values: Ideological beliefs about the best way to govern a

Dr.K.Raghu Ram, SCT. 6

4. Economic Values: Beliefs of the people about the money. Like

5. Spiritual Value: These values come out from the relationship of

6. Technical Value: It is based on science and physical facts. For

Dr.K.Raghu Ram, SCT. 7

7. Legal values: These are based on the law of the country.

8. Aesthetic values: These are based on beauty and

9. Ecological value: It is based on living system and

Dr.K.Raghu Ram, SCT. 8

 Oxford Dictionary defines Ethics as “the science of morals in human

 Ethics may be defined as “structured set of norms and values by which we

 Ethics must be followed at every level in society; at home, at work place,

 From the above explanation, we notice that ethics focuses on:

Dr.K.Raghu Ram, SCT. 9

involves production or purchase of goods and services

for the purpose of sale at a profit.

 All business activities involve sale, transfer or

exchange of goods and services for some value. It

includes activities like manufacturing, trading,

transportation, banking, finance, insurance, etc.

Dr.K.Raghu Ram, SCT. 10

 Business ethics is defined as the application of moral and ethical

Dr.K.Raghu Ram, SCT. 11

Dr.K.Raghu Ram, SCT. 12

Dr.K.Raghu Ram, SCT. 13

According to this principle, actions and policies

So, a decision-maker should consider the effect of

Dr.K.Raghu Ram, SCT. 14

According to this principle, morals promote the

Dr.K.Raghu Ram, SCT. 15

According to this principle, moral decisions are

This principle emphasizes the equitable

Dr.K.Raghu Ram, SCT. 17

Distributive justice is related to distributing society’s

4.2 Retributive Justice

Retributive justice refers to the just (fair) imposition

Dr.K.Raghu Ram, SCT. 18

It refers to the just way of compensating people for

Hence every person should maintain ethics in his

Dr.K.Raghu Ram, SCT. 19

Dr.K.Raghu Ram, SCT. 20

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