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CHAPTER 1
Business is part of human society. Business without ethics threatens the survival of human society. The study of Business Ethics paves the way for our common understanding of the basic concepts of what is right and wrong in the conduct of business.
Business is also a complex activity that involves major activities like: Production Manufacturing Marketing. Advertising Selling and the like.
Definitions:
BE is the study of right and wrong human behavior and conduct in business. BE is the study, evaluation, analysis, and questioning of ethical standards, policies, moral norms and ethical theories that managers and decision makers use in resolving moral issues and ethical dilemmas affecting business.
Without ethics, businessmen will set their own moral standards, moral rules and moral principles.
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.
Another important aspect in business that needs profound examination is the manner in which business leaders and managers confront ethical issues affecting the flow of business activities.
- Use of quantitative techniques - Nothing wrong with QT but there are issues which can only be resolved by Moral Reasoning.
Some ethical issues which cannot be solved by QT but MR are the ff:
1. Myth no. 1 Ethics is a personal affair and not a public debatable matter.
Myth No. 2 Ethics and Business do not mix. Myth No. 3 Ethics in Business is Relative.
1. Business is an integral part of human society. Therefore all actions relating to business must be subjected to moral rules and moral evaluation.
2. In business, what is legal may not be necessarily be moral. E.g. lethal injection
4. Peter Drucker argues that the Enterprise is an organ of society and its actions have decisive impact on the social scene.
He is just reminding us that business corporation is not just created to make profits but to consider its moral and social obligations to the stakeholders.
Moral reasoning is the process in which ethical issues and problems are benchmarked against a moral standard so that a moral judgment is made possible.
Situation Analysis (sexual harassment) Problem Analysis (gravity of offense) Decision Analysis (Company rules/policies) Resolution (Moral/Immoral or Legal/Illegal)
1. LOGICAL 2. BASED ON FACTS and SOLID EVIDENCE 3. BASED ON SOUND AND DEFENSIBLE MORAL PRINCIPLES
The Good side of Profitmotive: 1. It motivates people to do something meaningful. 2. It promotes ingenuity and cleverness in running a business. 3. Makes people productive. 4. Generates potential capital for the business.
The Bad Side of Profit-Motive: 1. It promotes rivalry among competitors. 2. It makes people focus only in making money, that is to sell as many goods as possible without considering the needs and wants of the customer. 3. It turns the businessman from being reflective because it focuses his attention in making money. 4. It promotes self-interest rather than the common good.
Ethical Considerations of Profit-Motive in Business 1. Earning profit is good and a valid activity in business. However an ethical discernment is required. Is my profit fair enough for and my customers? Did I consider some factors in making profit?
2. Making excessive profit is totally wrong. It leads to greed, avarice and manipulation of customers. 3. Profit is not the be-all and the end-all of doing business.. 4. Profit is never total condemnable.