3. Three “C’s” of Business Ethics
The need for compliance of rules, including :
◦ Laws,
◦ Principles of morality, the customs of community,
and
◦ Policy of the company and fairness.
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4. Three “C’s” of Business Ethics
The contribution business can make to
society through:
◦
◦
◦
◦
The core values,
Quality of one’s products and services
By providing jobs to employees
Usefulness of activities to surrounding
community, and QWL (Quality of Work Life)
influenced by ethical and moral values.
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5. Three “C’s” of Business Ethics
The consequences of business activity:
Towards environment inside the plant and outside the
organizational community, e.g., Bhopal Gas Leading
Tragedy.
Social responsibility towards shareholders, bankers,
suppliers, customers and employees of organization.
Good public image. Sound business practices so that
public image is not tarnished.
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6. Influences on Ethical Behavior
Personal values
Attitude/Behaviors of supervisor
Attitudes/Behaviors of senior management
Internal drive to succeed
Performance pressures
No threat of punishment
Friends/Coworkers
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7. Ethical Issue
•A problems, situations, or opportunities
requiring an individual to choose among
actions that may be evaluated as right or
wrong, ethical or unethical
Ethical issues arise because of:
Conflict among personal/organizational
values
◦ Conflicts with societal values
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8. Is it Ethical Issue?
Is it ethical to reduce costs by exploiting low
quality resources
Is it ethical to sell products that are legal, but
known to harm those who use them
Is it ethical to manufacture products that are
used to kill?
Those are ‘big questions’ that elicit strong views,
but there are many smaller, tactical issues at an
individual level
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9. Then…..
Ethical behavior goes beyond the legal
requirement placed on a business, as it concerns
discretionary decisions and behavior;
In other words, what a business chooses to do,
rather than what it is forced to do.
Business ethics are relevant both to the conduct
of an individual within an organization and to the
conduct of the organization as a whole.
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10. Theory & Practice
In theory, business ethics are shared
set of attitudes, morals and rules of
behavior that underpin the decision
making process
However, in practice not everybody
agrees on what is ethical and what is
not.
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11. Classification of Ethical Issues
I.
II.
III.
IV.
Conflicts of interest
Honesty & fairness
Communications issues
Organizational relations
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12. I.
Conflict of Interest
A conflict of interest (COI) occurs when an
individual or organization is involved in multiple
interests, one of which could possibly corrupt the
motivation for an act in another.
A conflict of interest is a set of circumstances
that creates a risk that professional judgment or
actions regarding a primary interest will be
unduly influenced by a secondary interest.
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13. • Exists when an individual
Conflict of Interest must choose whether
to advance his or her own personal interests,
those of the organization, or some other group
• Must be able to separate personal interests
from business dealings
• Bribery is a significant concern
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14. Conflict of Interest
Grease Payments – Money given for the purpose of
getting minor officials to do what they are supposed
to be doing. (Money given to minor officials – clerks,
to expediting a project)
Bribes – Relatively large amounts of money given far
the purpose of influencing officials to make decisions
or take actions that they otherwise might not take.
(to high – ranking officials to get these persons to
purchase goods
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15. II. Honesty and Fairness
Honesty relates to truthfulness, integrity &
trustworthiness with business activities
Fairness relates to being just, equitable & impartial
with organizational activities
Business should not be played as a “ game” and
managers tend to Breaking or bending laws means
violates trust
And finally Lack of rules & poor enforcement of firm
may leads to unethical behavior
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16. III. Communications
Issues involved relate to advertising, product
safety, pollution, & employee work conditions.
Lying is a major ethical issue with internal &
external communications
False advertising relates to:
Exaggerated/inflated claims
Concealed / hidden facts & ambiguous statements
Lying
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18. Ethical Issues Related to Ownership
Owners have an obligation to society as well as
their employees & customers
Minimize pollution
Compensate working fairly
Produce safe products
Must be sensitive to legal & ethical risks of
their industry & region
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19. Employees & Management Concerns
Employee theft, sabotage & competitive
intelligence, child labor,
Rights in hiring, promotion, and firing
Fear of layoffs, Upward mobility
Salary plateau/level, motivations
Discrimination, security of job
Privacy & data access, outsourcing
Health & safety, welfare facility
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20. Consumer & Marketing Issues
Better quality of goods, truth
Reasonable price not discriminatory pricing
How to use positioning, promotion tool
How shows differentiations
Maximize positive publicity & avoid
negative
Bidding, Pricing, Competition
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21. Shareholders
Ensure capital appreciation
Ensure steady & regular dividends
Disclosure all relevant information
Protect minority shareholders interest
Protect interest in times of mergers,
amalgamations and takeovers.
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22. Government
Comply with rules and regulations
Honesty in paying taxes
Competitor
Honesty in attracting customer
Practice win-win approach
Beating with value not cheating
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23. Distributors
Comply with rules and regulations
Honesty in paying taxes
Supplier
Comply with agreements
Use bargaining power
Consider as a supplier to supplier
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24. Identify an Ethical Issue
An activity approved by most members of the
organization & customary in the industry is probably
ethical
If the issue withstands open discussion between
groups within & outside the organization is probably
ethical
Covert discussion, destroyed or disguised documents
indicate potential problems.
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