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Ethics In Business.
Ethics deals with Ideals. Hence ethics is said to be Normative Science. A Normative Science seeks to determine Norms, Ideals, Standards or Values. It is generally recognized that there are three Ideals of Human Life, Viz, Truth, Beauty, and Goodness. They correspond to three aspects of our experience: Thinking, Feeling and Willing. Logic deals with the Ideal of Truth, Aesthetic deals with Beauty, and Ethics is concerned with the Ideal of Good. Ethics is not concerned with Human Conduct as it is, but as it Ought To Be. It passes Judgments of Value upon Human Actions with reference to the Moral Ideal. The Judgments of a Normative Science like Ethics are Judgments of Value, stating whether a Particular Conduct is in Conformity with the Moral Ideal or the Ideal Of Goodness. 2
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An important question which arises in Ethics: When we judge a Conduct as Good or Bad, do we judge it by its Motive alone or by Consequences? According to some, if the Consequences are good, the Conduct is Good, if the Consequences are Bad, Conduct too is Bad. But this is not always so. Sometimes the Motive may be Good, but the Result may be Bad. Example: A Surgeon performs an operation, with utmost care to cure a patient, but despite that, the patient dies. In this case, Motive is Good, but the Consequence is Bad. The action of the Surgeon cannot be termed as Morally Bad, simply because Consequence turns out to be Bad. Another important Principle to be noted is that Means adopted are as important as the End. In other words to achieve a Good End, the Means adopted should also be Good. Hence, we conclude that Morality of Action is judged by the Intention of the doer, the term Intention being used in a wide sense to cover both immediate or remote Intention, Conscious or Unconscious 6 Intention, Formal and Material Intention.
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Trust In Supplier Relations: Suppliers provide a Firm with Products and Services it needs to conduct Business. An Exchange Relationship is based on Trust between both Parties that each will honor his Commitment and minimize Surprise. This will reduce the risk involved in the Buying Process. Trust In Customer Relationships: The Companys contact with a Customer is mostly through its Sales Force. A Salesman earns a Customers Trust by being Dependable, Honest, Competent and Customer Oriented. Customers rely on Suppliers to provide Goods and Services of Acceptable Quality as Promised at Reasonable Prices. Trust In Employee Relations: Trust applies to Peers as well as Superiors and Sub-Ordinates. The following factors promote Trust: Open Communications. Giving Employees a Greater Share in the Decision Making. Sharing Of Critical Information. Trust Based Sharing of Perceptions and Feelings. Trust is an Important Element in the Employee Empowerment 11 Process.
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Consequentialist Principles.
Consequentialist Principles Focus on the Outcome of a Decision. A Decision is Ethical or Unethical based on the Consequences of the Decision. Egoism: Egoism is a Standard that focuses on Self Interest. Egoism is equated with an Individuals Personal interest. Decisions based on Egoism provide the most favorable Consequences for that Party, regardless of the Consequences to other Parties. This does not mean that other Parties must be harmed by a Decision. However, benefits beyond the Party of Interest are of no concern to the Decision Maker. Self Interest may be Short-Run or Long-Run. Long-Run Self Interest is often called Enlightened Self Interest, because it considers both the direct and indirect Consequences of an Act over an extended period of time. Long-Run Self Interest takes into account the Impact of a Decision on the relevant Stakeholders and the expected reaction of the Stakeholders. Adam Smith has argued that Societys Interest is better served, when an Individual peruses Long-Run Self Interest.
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Utilitarianism.
According to the Utilitarian Principle, a Decision is Ethical, if it provides a greater net Utility than any other alternative Decision. The Decision Maker should evaluate each alternative Decision, determine the negative and positive Utilities arising from all alternatives and then select the one that yields the Greatest Net Utility. By using a Consequentialist Approach, a Manager will face some difficulties as under. It is very difficult to foresee all the Consequences of a Business Decision. Accurate Forecasts of outcomes are required, in situations, where little Data is available. Many Decisions have Consequences that are not easily measured, and often lack common measurement units. Maximizing Net Utility may require actions that cause harm to some people.
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Non-Consequentialist Principles.
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