Business Ethics and Corporate Governance ppt. is Study material for MBA/PGDM students.

1. BUSINESS ETHICS AND
CORPORATE GOVERNANCE
Prof. KANCHAN KUMARI

2. INTRODUCTION TO BUSINESS ETHICS
 Ethics examines the rational justification for our moral judgments;
it studies what is morally right or wrong, just or unjust. In a broader
sense, ethics reflects on human beings and their interaction with nature
and with other humans, on freedom, on responsibility and on justice.
 Ethics is what guides us to tell the truth, keep our promises, or help
someone in need. There is a framework of ethics underlying our lives
on a daily basis, helping us make decisions that create positive impacts
and steering us away from unjust outcomes

3. MEANING OF ETHICS
 Business Ethics studies how to deal with corporate governance,
whistleblowing, corporate culture, and corporate social responsibility. It
emphasizes standard principles prescribed by governing bodies. Non-
compliance with business ethics leads to unnecessary legal actions.
 1. pertaining to or dealing with morals or the principles of
morality; pertaining to right and wrong in conduct. 2. being in
accordance with the rules or standards for right conduct or practice,
esp. the standards of a profession

4. DEF. OF BUSINESS ETHICS
 Business ethics refers to implementing appropriate business policies
and practices with regard to arguably controversial subjects. Some
issues that come up in a discussion of ethics include corporate
governance, insider trading, bribery, discrimination, social
responsibility, and fiduciary responsibilities.
 The term business ethics refers to the set of moral principles that
guides a company's conduct. These principles govern every aspect of
the company's operations, including its interaction with the
government and other businesses, its treatment of its employees and
its relationship with its customers. Whenever any ethical dilemmas or
controversies arise, a business references these foundational principles
to help resolve those situations.

5. ETHICAL
PERFORMANCE
 Ethical performance protects your reputation and makes you an
appealing choice for new hires. All too often, however, businesses find
themselves splashed across the media for irresponsible and destructive
behaviour.
 An organization that is perceived to act ethically by employees can
realize positive benefits and improved business outcomes. The
perception of ethical behavior can increase employee performance, job
satisfaction, organizational commitment, trust and organizational
citizenship behaviors

6. ETHICAL
PERFORMANCE MANAGEMENT

7. TYPES OF ETHICS
 Four Branches of Ethics
• Descriptive Ethics.
• Normative Ethics. Virtue ethics. Deontological ethics. Consequentialism
(Teleology)
• Meta Ethics.
• Applied Ethics.

8.  Descriptive ethics is a form of empirical research into the attitudes
of individuals or groups of people. In other words, this is the division
philosophical or general ethics that involves the observation of the
moral decision-making process with the goal of describing the
phenomenon.
 Descriptive ethics, on the other hand, approaches the study of
morality or moral phenomena by asking different questions. In
this approach attempts to describe and explain moral action, moral
decision making, and moral phenomena. For example, how do
individuals process and resolve perceived moral conflicts?

9. NORMATIVE ETHICS
 Normative ethics is the study of ethical behavior and is the branch of
philosophical ethics that investigates the questions that arise regarding
how one ought to act, in a moral sense
 Normative ethics is about intrinsic value, right and wrong, and/or
virtues. The following are claims concerning normative ethics: It is
wrong to kill people just because they make you angry. We should fight
to free slaves when necessary, even when doing so is illegal.

10. META ETHICS
 Metaethics is the study of moral thought and moral language. Rather
than addressing questions about what practices are right and wrong,
and what our obligations to other people or future generations are –
questions of so-called ‘normative’ ethics – metaethics asks what
morality actually is. The metaethicist is interested in whether there can
be knowledge of moral truths, or only moral feelings and attitudes, and
asks how we understand moral discourse as compared with other forms
of speech and writing.

11. APPLIED ETHICS
 Applied ethics refers to the practical aspect of moral considerations.
It is ethics with respect to real-world actions and their moral
considerations in the areas of private and public life, the professions,
health, technology, law, and leadership.
 Applied ethics, also called practical ethics, is the application of ethics
to real-world problems. Practical ethics attempts to answer the
question of how people should act in specific situations. For example, is
it ethical for a business owner to bluff during negotiations with another
company

12. SOURCES OF ETHICS
 Primarily ethics in business is affected by three sources
 Culture- Ethical culture can be defined as a set of experiences, assumptions, and
expectations of managers and employees about how the organization
encourages them to behave ethically or unethically. Measuring and building an
ethical culture is a challenging task that offers enormous long-term rewards.
 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.
Customs and Traditions: Practices that are handed over from generation to
generation become part of societal standards.
 laws of the state-State law refers to the law of a federated state, as
distinguished from the law of the federation of which it is a part. It is used
when the constituent components of a federation are themselves called states.

13. ETHICS AND BUSINESS
 Ethics is what guides us to tell the truth, keep our promises, or help
someone in need. There is a framework of ethics underlying our lives
on a daily basis, helping us make decisions that create positive impacts
and steering us away from unjust outcomes.
 The discipline comprises corporate responsibility, personal
responsibility, social responsibility, loyalty, fairness, respect,
trustworthiness, and technology ethics.

15. FACTORS INFLUENCING BUSINESS ETHICS
 Factors Influencing Business Ethics
• Culture. Culture refers to the social norms, customs, and beliefs of a
society or group. ...
• Personal Code of Ethics. ...
• Legislation. ...
• Government Rules and Regulations. ...
• Ethical Code of the Company. ...
• Social Pressures. ...
• Ethical Climate of the Industry.

16. OBJECTIVE OF BUSINESS ETHICS
• Respect for human rights: creating an ethical work environment that respects all employees
regardless of their race, gender, religion, ethnicity or sexual orientation.
• Responsible business practices: adopting business practices that promote social responsibility, such
as reducing the company’s carbon footprint, minimizing waste and pollution, and supporting local
communities.
• Fair wages: establishing a fair wage structure and providing job security to employees.
• Transparency: maintaining transparency in all aspects of the business and its operations.
• Confidentiality: protecting the confidential information of customers and employees.
• Respect for the environment: implementing practices that minimize the use of natural resources and
reduce the company’s impact on the environment.
• Animal welfare: avoiding testing products on animals and supporting animal welfare organizations.
• Support for the community: engaging in activities that contribute to the local community, such as
sponsoring local charities, volunteering, and providing employment opportunities.

17. MORALITY AND ETHICS
 Both morality and ethics loosely have to do with distinguishing the
difference between “good and bad” or “right and wrong.” Many people
think of morality as something that's personal and normative,
whereas ethics is the standards of “good and bad” distinguished by
a certain community or social setting.
 Morality is a system or set of ideas about right vs. wrong and good
vs. evil behaviour; it is subjective rather than objective, and is part of
the philosophical study of ethics.

18. THANK YOU
PROF. KANCHAN KUMARI