CORPORATE
ETHICS

INTRODUCTION
∫ Business Ethics as an applied branch of
General Ethics must be studied from the
perspective of Philosophy.
∫ This is because Ethics is a part of moral
principles, you will not know Ethics without
being philosophical.

Ethics & Philosophy
o Philosophy, etymologically came from
two Greek words philos, which means
love and sophia, means wisdom. (Love of
Wisdom)
o Hence, a philosopher is one who loves
wisdom.
o As a science, philosophy is interested
with the meaning of reality including
our human experiences.
o It is a science that seeks to explain the
ultimate cause of everything by the use
of human reason alone.

Division of Philosophy
1. Theoretical Philosophy – studies the truth to
be known, e.g. God, immortality of the soul,
origin of the universe.
2. Practical Philosophy – studies truths to be
acted upon, e.g. ethics, axiology(study of
vales, goodness etc.), semantics(relation
between words, phases, signs & symbols),
etc.

Division of Philosophy
THEORETICAL PRACTICAL
Cosmology
Origin of universe
Ontology
The theory of being
Metaphysics
Meta (beyond) physikon
(nature)
Psychology
Human/animal behavior
Theodicy
God on logical abstraction
Epistemology
Theory of knowledge
Semantics
Words and its linguistic
forms
Axiology
Discourse of value judgment
Aesthetics
Principles of beauty and art
Logic
Reasoning to establish truth
Ethics
From Greek word “ethos” means
“Characteristic way of acting” which
is proper to as a rational being.

Ethics & Morality
Morality
o Morality refers to the quality of goodness or
badness in a human act.
o Good is described as moral and bad as immoral.
o It means conformity to the rules of right conduct.
Ethics
o Ethics refer to the formal study of those standards
and conduct.
o It is also often called “ moral philosophy”.

Ethics As Normative
Science
• Ethics is considered a Normative Science
because it is concerned with the
systematic study of the norms of human
conduct, as distinguished from formal
sciences such as Mathematics, chemistry
physics etc..
• Ethics is a normative science because it involves a
systematic search for moral principles and norms that
are justify our moral judgments.

Three Categories of
General Ethics

Three Categories of
General Ethics
o Descriptive ethics maintains objectivity in
studying human behavior but it does not
provide a clear standard of morality.
o It simply describes how people act and
does not prescribe how people should act.

Three Categories of
General Ethics
Involves moral judgment based on ethical
norm or theory.
This consists both the basic moral
principles and values and the particular
moral rules that govern people’s behavior,
which is right or moral and wrong or
immoral.

Three Categories of
General Ethics
It does not describe moral beliefs of
people, does not evaluate the process of
moral reasoning, but simply analyzes the
usage and meaning of words.

THE PROBLEM OF ETHICAL
RELATIVISM & SITUATION ETHICS
Ethical Relativism
o Ethical relativism claims that when any two
cultures or any people hold different moral
values of an action, both can be right.
o An action may be right for one person or
society and the same action taken in the same
way may be wrong for another reason, and yet,
both persons are equally correct.

THE PROBLEM OF ETHICAL
RELATIVISM & SITUATION ETHICS
Approaches to Morel Difference
There is no Moral Truth
There is no Universal Truth
Deep down, we can find basic Moral
Truth
There is one Universal Moral Truth

THE PROBLEM OF ETHICAL
RELATIVISM & SITUATION ETHICS
There is No Moral Truth
There is no ultimate right or wrong.
Moral views differ from one person to
another.
This results to a subjective morality, in
which case, what is good for one person
may be bad for another.

THE PROBLEM OF ETHICAL
RELATIVISM & SITUATION ETHICS
There is No Universal Truth
 Each Culture has its own set of rules
that are valid for that culture, and we
have no right to interfere, just as they
have no right to interfere with our rules.
 This ethical paradigm maintains that
there are moral truths that exist but
these truths are relative and dependent
on cultures and beliefs of people.

THE PROBLEM OF ETHICAL
RELATIVISM & SITUATION ETHICS
Deep down , We can Find Basic Moral
Truth
Despite differences, people of different
cultures can still agree on a certain moral
basics.
There are some common ground on basic
moral principles.
This is called “Soft Universalism”

THE PROBLEM OF ETHICAL
RELATIVISM & SITUATION ETHICS
There is One Universal Moral Truth
This view is also
known as hard
universalism or
moral absolutism.
This moral
paradigm
maintains that
there is only one
universal moral
code that
everybody must
follow.
Because this moral
code is universal and
objective, moral
problems, and moral
conflicts can be
solved through
proper moral
reasoning.

Deontological Vs. Teleological Approaches
To Ethical Evaluation of
Human Conduct
A
C
T
I
O
N
Motives/Intentions
End of the actor
Means/Action itself
End of the Act
Non -
Consequentialist
Consequences/Result,
Probable and actual
Consequentialist

Deontological Vs. Teleological Approaches
To Ethical Evaluation of the Human Conduct
Deontological Ethics
• Also known as non-consequentialist
approach is a body of ethical theories that
measures and evaluates the nature of a
moral act based on the validity of the
motive of an act.
• This means that if the motive or intention
of the act is good, then regardless of the
consequences, the whole action is good.

Deontological Vs. Teleological
Approaches
To Ethical Evaluation of the Human
Conduct
Teleological Ethics
 Came from the Greek word “tele” which
means far or remote. Known also as
Consequentialist theory measures the
morality of an action based on its
consequences and not on the motive or
intention of the actor.
 If the consequence is good, regardless what
motive is, the act is always morally good.

Corporate Social Responsibility
(CSR) & Ethics

Definitions and Relationships
Corporate social responsibility (CSR) is the process by which
businesses negotiate their role in society
In the business world, ethics is the study of morally
appropriate behaviors and decisions, examining what "should
be done”
Although the two are linked in most firms, CSR activities are no
guarantee of ethical behavior

Recent Evidence of CSR
Interest
An Internet search turns up 15,000 plus
response to “corporate citizenship”
Journals increasingly “rate” businesses (and
NGOs) on socially responsive criteria:
• Best place to work
• Most admired
• Best (and worst) corporate reputation

CSR CONTINUUM
Maximize
firm’s profits to
the exclusion of
all else
Balance profits
and social
objectives
Fight social
responsibility
initiatives
Do more than
required; e.g.
engage in
philanthropic
giving
Integrate
social
objectives and
business goals
Do what
it takes to
make a
profit;
skirt the
law; fly
below
social
radar
Comply;
do what
is legally
required
Articulate
social value
objectives
Lead the
industry
and other
businesses
with best
practices

CSR are Grounded by Opposing Objectives
(Maximize Profits to Balance Profits with Social
Responsibility) and so Activities Range Widely
 Do what it takes to make a profit; skirt the law; fly below
social radar
 Fight CSR initiatives
 Comply with legal requirements
 Do more than legally required, e.g., philanthropy
 Articulate social (CSR) objectives
 Integrate social objectives and business goals
 Lead the industry on social objectives

Businesses CSR Activities
Philanthropy
• give money or time or in kind to
charity
• Integrative philanthropy—select
beneficiaries aligned with
company interests
Philanthropy will not
enhance corporate
reputation if a company
• fails to live up to its
philanthropic image or
• if consumers perceive
philanthropy to be
manipulative

Integrate CSR Globally
• Incorporate values to make it part of an
articulated belief system
• Act worldwide on those values
– Cause-related marketing
– Cause-based cross sector partnerships
• Engage with stakeholders
– Primary stakeholders
– Secondary stakeholders

Business Ethics
Development
• The cultural context influences
organizational ethics
• Top managers also influence ethics
• The combined influence of culture and
top management influence
organizational ethics and ethical
behaviors

The Evolving Context for
Ethics
• From domestic where ethics are shared
• To international where ethics are not shared
when companies:
– Make assumptions that ethics are the same
– Ethical absolutism—they adapt to us
– Ethical relativism—we adapt to them
• To global which requires an integrative
approach to ethics

Emergence of a Global
Business Ethic
 Growing sense that responsibility for righting
social wrongs belongs to all organizations
 Growing business need for integrative
mechanisms such as ethics
o Ethics reduce operating uncertainties
o Voluntary guidelines avoid government impositions
 Ethical conduct is needed in an increasingly
interdependent world—everyone in the same
game
 Companies wish to avoid problems and/or be good
public citizens

Ways Companies Integrate
Ethics
• Top management commitment in word and
deed
• Company codes of ethics
• Supply chain codes
• Develop, monitor, enforce ethical behavior
• Seek external assistance

External Assistance with Ethics
Industry or professional
codes
Certification programs,
e.g., ISO 9000
Adopt/follow global
codes
• Caux Round Table Principles

Reasons for Businesses to Engage in
Development of a Global Code of
Business Ethics
• Create the same opportunity for all businesses if
there are common rules
• Level the playing field
• They are needed in an interconnected world
• They reduce operating uncertainties
• If businesses don’t collaborate, they may not like
what others develop

Four Challenges to a Global Ethic
– Global rules emerge from negotiations and will
reflect values of the strong
– Global rules may be viewed as an end rather
than a beginning
– Rules can depress innovation and creativity
– Rules are static but globalization is dynamic