The document discusses various topics related to business ethics including definitions of ethics, morality, and business ethics. It describes different ethical theories like teleological, deontological, and virtue ethics as well as concepts such as moral absolutism and relativism. The document also outlines objectives, sources, and nature of ethics providing an overview of this important subject.

1. Dr. Hansini Premi
Asst. Professor
IBS, IUD

4.  Ethics is called “Ethicus” in Latin language and
“Ethicos” in Greek.
 This word has originated from “ethos” meaning
character or manners
 Ethics is thus said to be the source of morals;
recognised rules of conduct.
ETHICS

5.  Moral principles that govern a person's behaviour or the
conducting of an activity
 The branch of knowledge that deals with moral principles.
 Fundamental principles of decent human conduct. It includes
study of universal values such as the essential equality of all
men and women, human or natural rights, obedience to the
law of land, concern for health and safety and, increasingly,
also for the natural environment.

9. BUSINESS ETHICS
Business ethics (also corporate ethics) is a form of applied
ethics or professional ethics that examines ethical
principles and moral or ethical problems that arise in a
business environment.
It applies to all aspects of business conduct and is relevant
to the conduct of individuals and entire organizations

10.  According to Crane, "Business ethics is the study of
business situations, activities, and decisions where
issues of right and wrong are addressed.”
 Baumhart defines, "The ethics of business is the
ethics of responsibility. The business man must
promise that he will not harm knowingly."

11. NATURE OF ETHICS
 Ethics is a subject that deals with human beings. Humans by their nature are
capable of judging between right and wrong, good and bad behaviour.
 There was an argument whether ethics is a science or an art. But experts
were of the opinion that ethics is more of science than an art. Because it is
a systematic knowledge about moral behaviour and conduct of human
beings.
 Ethics is a normative science. The term normative implies a guide or control
of action. So, normative ethics tells us what we ought to do.
 Ethics deals with human conduct that is voluntary and not formed by any
persons or circumstances.

12. OBJECTIVES OF ETHICS
The primary objective is to define the highest good of man and set a
standard for the same.
Here, ethics deal with several interrelated and complex problems which
may be of psychological, legal, commercial, philosophical, sociological
and political in nature.
Ethics should be guided by virtues like:
 Truthfulness
 Accuracy
 Objectivity
 Impartiality
 Fairness
 Public accountability

13. OBJECTIVES OF ETHICS CONTD..
 Ethics are a study of human behaviour. Makes evaluative assessment
about that as moral or immoral.
 Ethics establish moral standards/norms of behaviour.
 Ethics make judgment upon human behaviour based on these standards
and norms.
 Ethics prescribe moral behaviour, makes recommendations about how to
or how not to behave.
 Ethics expresses an opinion or attitude about human conduct in general.
 The very basic objective is to define the greatest good of man and
establish a standard for the same.
 Suggests moral behaviour and prescribes recommendations about dos and
don’ts.

14. UNDERSTANDING ETHICS
Presented By:
Dr. Poonam Kaushal
Assistant Professor
IBS, IUD

16. IMPORTANCE OF BUSINESS ETHICS
1 • Stop business malpractices
2 • Improve consumer confidence
3 • Survival of business
4
• Protecting consumers confidence
5
• Protecting employees, shareholders etc.
6
• Develops good relations b/w business and society
7 • Healthy competition
8 • Smooth business functioning
9 • Satisfaction

21. THE FIVE STAGES OF A CONSCIOUS COMPANY
 In the 1970’s, a few small businesses began elevating the capitalist
system by putting purpose ahead of profit, caring for all their
stakeholders (not just their shareholders) and protecting people,
health and the environment. These small businesses have grown to
some familiar names you know: Patagonia, Whole Foods, and The
Body Shop.
 Decades after starting Whole Foods, founder John Mackey would
team up with marketing professor Raj Sisodia to coin the
term Conscious Capitalism to describe the potential of business to
make a positive impact on the world.
 Today, businesses like Patagonia and The Bodyshop have become so
evolved in their impact, culture and product that they have
become the standard by which other conscious businesses are
measured.

22. THE FIVE STAGES OF A CONSCIOUS COMPANY
 Understanding where you sit on this continuum and how to move your
company to the next stage is what needs to be understood.
 Stage 1: Bad Actor
Lie, cheat and steal to make a profit
 At this stage, a business has an almost total absence of purpose beyond
making money, and has a similar lack of ethics and care for others.
 Of course, no company admits this.
 Some who are here may not even know it, but the company’s culture will
always reveal the truth eventually.

23. THE FIVE STAGES OF A CONSCIOUS COMPANY
Stage 2: Rule Follower
Obey the letter of the law
 At this stage, a business will ostensibly obey the rules of the game, and
also take full advantage of others however it legally can. These
companies won’t do something proactive for non-fiduciary stakeholders
unless it is legally required, and they will take advantage of every
loophole to save and make money.
Stage 3: Fair Player
Do no intentional harm, but “business is business”
 At this stage, a business has an ethical core of “do no harm.”
 It’s leaders will not consciously act in a way that takes unfair advantage
or inflicts pain on people. They may seek to offset externalities through
limited corporate social responsibility efforts and other damage-
mitigating strategies. They will simultaneously compete fiercely to
maximize shareholder return, which they see as the purpose of their
company.

24. THE FIVE STAGES OF A CONSCIOUS COMPANY
Stage 4: Good Citizen
Take measures to have a net-positive impact
 At this stage, a company would like to produce a net-positive return for
society through its operations.
 These companies encourage employee volunteerism, contribute toward a
wide range of charitable concerns, and usually strive to create an
enjoyable workplace culture. These business recognize that investing in
social capital and goodwill creates important returns.
Stage 5: Conscious Company
Embody a specific, measurable purpose beyond profit
 At this stage, a company is aware of its power to achieve a specific,
important purpose beyond profit.
 It designs its culture and operations to leverage everything at its disposal
to fulfill that mission. Growth and profit remain, but no longer for their
own sake. they are now necessary factors for achieving the purpose.

26. ETHICS AND MORALS
Source of Principles
 Ethics are external standards that are provided by institutions, groups,
or culture to which an individual belongs. For example, lawyers,
policemen, and doctors all have to follow an ethical code laid down by
their profession, regardless of their own feelings or preferences. Ethics
can also be considered a social system or a framework for acceptable
behavior.
 Morals are also influenced by culture or society, but they are
personal principles created and upheld by individuals themselves.
Consistency and Flexibility
 Ethics are very consistent within a certain context, but can vary greatly
between contexts.

27. ETHICS AND MORALS
 For example, the ethics of the medical profession in the 21st century are
generally consistent and do not change from hospital to hospital, but they
are different from the ethics of the 21st century legal profession.
 An individual’s moral code is usually unchanging and consistent across
all contexts, but it is also possible for certain events to radically change
an individual's personal beliefs and values.
 Conflict between Ethics and Morals
 One professional example of ethics conflicting with morals is the work of
a defense attorney. A lawyer’s morals may tell her that murder is
reprehensible and that murderers should be punished, but her ethics as a
professional lawyer, require her to defend her client to the best of her
abilities, even if she knows that the client is guilty.

28. ETHICS AND MORALS
 Another example can be found in the medical field. In most parts of the
world, a doctor may not euthanize a patient, even at the patient's request,
as per ethical standards for health professionals. However, the same
doctor may personally believe in a patient's right to die, as per the doctor's
own morality
 Origins
 Much of the confusion between these two words can be traced back to
their origins. For example, the word "ethic" comes from Old French
(etique), Late Latin (ethica), and Greek (ethos) and referred to customs or
moral philosophies. "Morals" comes from Late Latin's moralis, which
referred to appropriate behavior and manners in society. So, the two have
very similar, if not synonymous, meanings originally.

33. SOURCES OF ETHICS
Important sources of ethics include:
 Religion: Religion is the most important source of ethics, as religious
teachings often prescribe what is right and wrong and society subscribes
to such norms.
 Traditions: Practices that are handed over from generation to generation
become part of societal standards.
 Family: Family is the fundamental unit of the society and they establish
certain standards for a functioning society. A child is first educated about
ethical norms in family.
 Human conscience: Conscience helps a man to differentiate between
good and bad, and certain standards for society are acceptable for
all conscientious men.
 Government laws: Sometimes, certain standards are imposed on the
society through laws, which over time are accepted by society and forms
part of its ethical system
 Role Models and Philosophers: They inspire people and help in societies
discovering or assimilating new virtues.

34. ETHICAL THEORIES

36. ETHICAL THEORIES
 Meta-ethics: about theoretical meaning and reference of moral
propositions and how their truth values (if any) may be determined.
 It is concerned with what we mean when we use words like “ good”,
“bad”, “right” and “wrong”. It does not tell us what we can do or cant do.
 Normative Ethics: about the practical means of determining a moral
course of action
 Normative Ethics is focused on the creation of theories that provide
general moral rules governing our behavior, such as Utilitarianism or
Kantian Ethics.
 The problem here is there is no agreement among ethicist on which moral
principals are right ones.

37. ETHICAL THEORIES
 However most ethicists do agree, that if a moral principles is to be
accepted, it must be:
 Prescriptive: formulated as a imperative or a command( proposed action
is obligatory).
 Universal: Not restricted to a particular group but is applicable to any
person in a given situation.
 Overriding: should be a primary consideration in action assessment
 Public: presupposes social interaction
 Practical: must be achievable by an average individual in ordinary
circumstances.

38. THREE DIFFERENT NORMATIVE THEORIES
1. Teleological theory
 Teleology finds its etymology in the Greek word ‘telos’ which
means “end” and logos, “science”.
 The teleological approach is also called “consequentialism”.
 It determines the moral worth of any action by the consequences or
outcomes of that action.
 An action is good if its consequences are good; an action is wrong
if its consequences are bad.
 Hence, for judging an action morally, we have to consider its
actual or likely results.

39. Consequentialists have offered three definitions of “good”. Each of these
definitions gives us a different consequentialists moral theory. These three
theories are :
Egoism
an ethical theory that treats self-interest as the foundation of morality.
Utilitarianism
the doctrine that an action is right in so far as it promotes happiness, and that the
greatest happiness of the greatest number should be the guiding principle of
conduct.
Altruism
disinterested and selfless concern for the well-being of others.
THREE DIFFERENT NORMATIVE THEORIES

40. Altruism vs. Utilitarianism vs. Egoism: a comparison through an
(admittedly unrealistic) example
Three men, A, B, and C, are arrested and put in jail. None of the men have
committed a crime. They each know nothing about each other except for the
fact that they are all innocent.
A is pulled aside and given three choices:
1: He will be given one year in prison, B and C will each get ten years,
2: All three will each be given five years in prison, or
3: He will be given 20 years in prison, B and C will each get 1 year.
Assuming that external factors are ignored (the happiness of the men's
families, later consequences of each option, etc.), and that each man would
suffer equally from each year spent in prison,
Altruism would say to take #3, as he should live for others.
Utilitarianism would say to take #2, as that would minimize the amount of
overall suffering.
(Normative) Egoism would say to take #1, as that would minimize one's
own suffering.

41. THREE DIFFERENT NORMATIVE THEORIES
2. Deontological theory: The word is derived from the greek word “deno”
meaning “duty” or “obligation". It focuses on certain fundamental duties that
have as human being such as not committing murder or theft
 Duties to God (honouring him and praying to him)
 Duties to self (Preserving ones life and sharing happiness)
 Duties to others ( Family duties, social duties)
 Deontological theory states that ethical behavior should follow an
established set of rules or principles in all types of situations. Even though
the actual outcome of following established moral principles may differ, the
result does not determine whether the action is ethical. For example,
according to deontological theory, it would always be unethical to lie even if
lying would prevent an unfavorable consequence, such as death

43. THREE DIFFERENT NORMATIVE THEORIES
 Virtue Theory: Aristotle used the term “virtue” to explain our moral obligations.
This theory emphasis character development rather than the articulation of
abstract moral principles that guide actions.
 Virtue are those dispositions of character which an individual considers to be
good.

44.  Applied Ethics: about how moral outcomes can be achieved in specific
situations.
 Often deals with controversial moral issues such as abortion female
feticide etc.
 Descriptive Ethics: also known as comparative ethics, is the study of
people’s beliefs about morality

45.  Descriptive ethics: What do people think is right?
 Meta-ethics: What does "right" even mean?
 Normative (prescriptive) ethics: How should people
act?
 Applied ethics: How do we take moral knowledge
and put it into practice?

47. MORAL ABSOLUTISM
 Moral absolutism asserts that there are certain universal moral principles
by which all peoples’actions may be judged. It is a form of deontology.
 The challenge with moral absolutism, however, is that there will always be
strong disagreements about which moral principles are correct and which
are incorrect.
 For example, most people around the world probably accept the idea that
we should treat others as we wish to be treated ourselves. But beyond that,
people from different countries likely hold varying views about everything
from the morality of abortion and capital punishment to nepotism and
bribery.
 Moral absolutism contrasts with moral relativism, which denies that there
are absolute moral values.
 So, while moral absolutism declares a universal set of moral values, in
reality, moral principles vary greatly among nations, cultures, and
religions

48. MORAL ABSOLUTISM
 The moral absolutism definition is the view that there are moral
laws that are universal and unconditional. They are universal
because they apply to everyone at all times. They are unconditional
because they are not affected by circumstance, culture, or any other
contextual condition. In other words, they are moral rules that
always apply with no exceptions.
 Lying is immoral
 Domestic Violence is immoral
 Slavery is unjust and immoral
 Killing someone is immoral

50. ETHICAL/ MORAL RELATIVISM
 According to moral relativism, two people with different experiences
could disagree on whether an action is right or wrong, and they could
both be right. What they consider right or wrong differs according to
their contexts, and both should be accepted as valid.
 One advantage of ethical relativism is that it allows for a wide variety of
cultures and practices. It also allows people to adapt ethically as the
culture, knowledge, and technology change in society. This is a good
and valid form of relativism.
 The disadvantage of ethical relativism is that truth, right and wrong, and
justice are all relative. Just because a group of people think that
something is right does not make it so. Slavery is a good example of
this. Two hundred years ago in America, slavery was the norm and
morally acceptable. Now it is not.

52. RIGHTS
 What is a right? A right is a justified claim on others. For example, if I
have a right to freedom, then I have a justified claim to be left alone by
others. Turned around, I can say that others have a duty or
responsibility to leave me alone. If I have a right to an education, then I
have a justified claim to be provided with an education by society.
 The "justification" of a claim is dependent on some standard
acknowledged and accepted not just by the claimant, but also by society
in general. The standard can be as concrete as the Constitution, which
guarantees the right of free speech and assures that every Indian
accused of a crime "shall enjoy the right to a speedy trial in the court,"
or a local law that spells out the legal rights of landlords and tenants.
 Moral rights are justified by moral standards that most people
acknowledge, but which are not necessarily codified in law; these
standards have also, however, been interpreted differently by different
people.

53. NEGATIVE AND POSITIVE RIGHTS
 One of the most important and influential interpretations of moral rights is
based on the work of Immanuel Kant, an eighteenth century philosopher.
Kant maintained that each of us has a worth or a dignity that must be
respected.
 This dignity makes it wrong for others to abuse us or to use us against our
will. Kant expressed this idea in a moral principle: humanity must always
be treated as an end, not merely as a means.
 To treat a person as a mere means is to use a person to advance one's own
interest. But to treat a person as an end is to respect that person's dignity
by allowing each the freedom to choose for himself or herself.
 Kant's principle is often used to justify both a fundamental moral right,
the right to freely choose for oneself, and also rights related to this
fundamental right. These related rights can be grouped into two broad
categories—negative and positive rights.

54. NEGATIVE AND POSITIVE RIGHTS
 Negative rights, such as the right to privacy, the right not to be killed, or
the right to do what one wants with one's property, are rights that
protect some form of human freedom or liberty, . These rights are called
negative rights because such rights are a claim by one person that
imposes a "negative" duty on all others—the duty not to interfere with a
person's activities in a certain area. The right to privacy, for example,
imposes on us the duty not to intrude into the private activities of a
person.
 Kant's principle is also often used to justify positive or, as they are often
called, welfare rights. Where negative rights are "negative" in the sense
that they claim for each person a zone of non-interference from others,
positive rights are "positive" in the sense that they claim for each person
the positive assistance of others in fulfilling basic constituents of human
well-being like health and education.

55. NEGATIVE AND POSITIVE RIGHTS
 Many people argue that a fundamental right to freedom is worthless if
people aren't able to exercise that freedom. A right to freedom, then,
implies that every human being also has a fundamental right to what is
necessary to secure a minimum level of well being. Positive rights,
therefore, are rights that provide something that people need to secure
their well being, such as a right to an education, the right to food, the
right to medical care, the right to housing, or the right to a job.
 Positive rights impose a positive duty on us—the duty actively to help a
person to have or to do something. A young person's right to an
education, for example, imposes on us a duty to provide that young
person with an education. Respecting a positive right, then requires more
than merely not acting; positive rights impose on us the duty to help
sustain the welfare of those who are in need of help.

56. CONFLICT OF RIGHTS
 Whenever we are confronted with a moral dilemma, we need to
consider whether the action would respect the basic rights of each of the
individuals involved. How would the action affect the basic well-being
of those individuals? How would the action affect the negative or
positive freedom of those individuals? Would it involve manipulation or
deception—either of which would undermine the right to truth that is a
crucial personal right? Actions are wrong to the extent that they violate
the rights of individuals.
 Sometimes the rights of individuals will come into conflict and one has
to decide which right has priority. For example, that everyone has a
right to freedom of association as well as a right not to be discriminated
against. But suppose a private club has a policy that excludes women
from joining.

57. CONFLICT OF RIGHTS
 How do we balance the right to freedom of association—which would
permit the club to decide for itself whom to admit—against the right not to
be discriminated against—which requires equal treatment of women? In
cases such as this, we need to examine the freedoms or interests at stake
and decide which of the two is the more crucial for securing human
dignity. For example, is free association or equality more essential to
maintaining our dignity as persons?
 Rights, then, play a central role in ethics. Attention to rights ensures that
the freedom and well-being of each individual will be protected when
others threaten that freedom or well-being. If an individual has a moral
right, then it is morally wrong to interfere with that right even if large
numbers of people would benefit from such interference.

61. KANTIAN ETHICS
 Kant believes that in doing this people will come to recognize that
certain actions are right and wrong irrespective of how we might feel
and irrespective of any consequences. For Kant, actions are right if
they respect what he calls the Categorical Imperative.
 For example, because lying fails to respect the Categorical
Imperative it is wrong and is wrong irrespective of how we might
feel about lying or what might happen if we did lie; it is actions that
are right and wrong rather than consequences. This means that
Kant’s theory is deontological rather than teleological. It focuses on
our duties rather than our ends/goals/consequences.

62. JUSTICE & FAIRNESS
 Justice means giving each person what he or she deserves or, in more
traditional terms, giving each person his or her due. Justice and fairness
are closely related terms that are often today used interchangeably.
There have, however, also been more distinct understandings of the two
terms.
 While justice usually has been used with reference to a standard of
rightness, fairness often has been used with regard to an ability to judge
without reference to one's feelings or interests; fairness has also been
used to refer to the ability to make judgments that are not overly general
but that are concrete and specific to a particular case. In any case, a
notion of being treated as one deserves is crucial to both justice and
fairness.

63. JUSTICE & FAIRNESS
 Most ethicists today hold the view that there would be no point of talking
about justice or fairness if it were not for the conflicts of interest that are
created when goods and services are scarce and people differ over who
should get what. When such conflicts arise in our society, we need
principles of justice that we can all accept as reasonable and fair
standards for determining what people deserve.
 But saying that justice is giving each person what he or she deserves does
not take us very far. How do we determine what people deserve? What
criteria and what principles should we use to determine what is due to
this or that person?

64. PRINCIPLES OF JUSTICE
 The most fundamental principle of justice—one that has been widely
accepted since it was first defined by Aristotle more than two thousand
years ago—is the principle that "equals should be treated equally and
unequal's unequally." In its contemporary form, this principle is
sometimes expressed as follows: "Individuals should be treated the same,
unless they differ in ways that are relevant to the situation in which they
are involved." For example, if Jack and Jill both do the same work, and
there are no relevant differences between them or the work they are
doing, then in justice they should be paid the same wages. And if Jack is
paid more than Jill simply because he is a man, or because he is white,
then we have an injustice—a form of discrimination—because race and
sex are not relevant to normal work situations.

66. ETHICS OF JUSTICE
The ethics of justice constitutes an ethical perspective in terms
of which
 ethical decisions are made on the basis of universal principles
and rules,
 and in an impartial and verifiable manner with a view to
ensuring the fair and equitable treatment of all people.
The ethics of justice deals with moral choices through a
measure of rights of the people involved and chooses
the solution that seems to damage the fewest people