2. Unit- 1
◉Introduction to business ethics
◉Concept of Ethics
◉Ethics and Morality
◉Sources of Ethics
◉Theories of business ethics
Deontological
Teleological
3. ETHICAL DILEMMA
You are applying for the job of sales associate. You have just found
out that you will be given a personality assessment as part of the
application process. You feel that this job requires someone who is
very high in extraversion, and someone who can handle stress well.
You are relatively sociable and can cope with some stress but
honestly you are not very high in either trait. The job pays well and it
is a great stepping-stone to better jobs.
Discussion Questions
◉How are you going to respond when completing the personality
questions?
◉What are the advantages and disadvantages of completing the questions
honestly?
◉Are you going to make an effort to represent yourself as how you truly
are?
◉What are the advantages and disadvantages of completing the questions
in a way you think the company is looking for?
5. What does an ethic mean to you?"
Some years ago, one sociologist asked
business people, "What does an ethic mean to
you?" Among their replies were the following:
◉"Ethics has to do with what my feelings tell
me is right or wrong.“
◉"Ethics has to do with my religious beliefs."
◉"Being ethical is doing what the law
requires."
◉"Ethics consists of the standards of behavior
our society accepts.”
◉"I don't know what the word means."
6. Business ethics
Business ethics refers to contemporary
organizational standards, principles, sets of
values and norms that govern the actions and
behavior of an individual in the business
organization.
"Managing ethical behavior is one of the most
pervasive and complex problems facing business
organizations today"
7. Business ethics
Business Ethics are:
◉ Normal principles and standards that define
right and wrong behavior in the world of
business.
◉ What is right and wrong is determined by
public interest groups/ business
organizations.
9. Researchers at the Institute of Leadership and Management in the UK asked
1600 managers what they think is unethical behavior in a workplace.
◉Here's the complete list:
◉Taking shortcuts / shoddy work: 72%
◉Lying to hide mistakes: 72%
◉Badmouthing colleagues: 68%
◉Passing the buck 67%
◉Slacking off when no one is watching: 64%
◉Lying to hide your colleagues' mistakes: 63%
◉Taking credit for other colleagues' work: 57%
◉Lying about skills and experience: 54%
◉ Taking low value items: 52%
10. “
Kinds of Unethical Behavior in Business
Theft
Lying to employees
Violating company internet policies
Vendor Relationships
Bending the Rules
Environmental damage
Wages and Working Conditions
Misusing company time
Mistreating Employees
Misrepresentation
Financial Misconduct
Abusive behavior
11. Importance of Ethics
Stop Business
Malpractices
Improve
Customers'
Confidence
Survival of
Business
Safeguarding
Consumers' Rights
Protecting
Employees and
Shareholders
Develops Good
Relations
Creates Good
Image
Smooth
Functioning
Consumer
Movement
Consumer
Satisfaction
Importance of
Labour/ employees
Healthy
Competition
12. ◉Stop Business Malpractices : Some unscrupulous businessmen do business
malpractices by indulging in unfair trade practices like black-marketing, artificial
high pricing, adulteration, cheating in weights and measures, selling of duplicate
and harmful products, hoarding, etc. These business malpractices are harmful to
the consumers. Business ethics help to stop these business malpractices.
◉ Improve Customers' Confidence : Business ethics are needed to improve
the customers' confidence about the quality, quantity, price, etc. of the
products. The customers have more trust and confidence in the businessmen
who follow ethical rules. They feel that such businessmen will not cheat Them.
◉Survival of Business : Business ethics are mandatory for the survival of
business. The businessmen who do not follow it will have short-term success,
but they will fail in the long run. This is because they can cheat a consumer only
once. After that, the consumer will not buy goods from that businessman. He will
also tell others not to buy from that businessman. So this will defame his image
and provoke a negative publicity. This will result in failure of the business.
Therefore, if the businessmen do not follow ethical rules, he will fail in the
market. So, it is always better to follow appropriate code of conduct to survive in
the market.
◉Safeguarding Consumers' Rights : The consumer has many rights such as
right to health and safety, right to be informed, right to choose, right to be heard,
right to redress, etc. But many businessmen do not respect and protect these
rights. Business ethics are must to safeguard these rights of the consumers.
13. ◉Protecting Employees and Shareholders : Business ethics are required to
protect the interest of employees, shareholders, competitors, dealers, suppliers,
etc. It protects them from exploitation through unfair trade practices.
◉Develops Good Relations : Business ethics are important to develop good
and friendly relations between business and society. This will result in a regular
supply of good quality goods and services at low prices to the society. It will also
result in profits for the businesses thereby resulting in growth of economy.
◉Creates Good Image : Business ethics create a good image for the business
and businessmen. If the businessmen follow all ethical rules, then they will be
fully accepted and not criticised by the society. The society will always support
those businessmen who follow this necessary code of conduct.
◉ Smooth Functioning : If the business follows all the business ethics, then
the employees, shareholders, consumers, dealers and suppliers will all be
happy. So they will give full cooperation to the business. This will result in
smooth functioning of the business. So, the business will grow, expand and
diversify easily and quickly. It will have more sales and more profits.
◉ Consumer Movement : Business ethics are gaining importance because of
the growth of the consumer movement. Today, the consumers are aware of
their rights. Now they are more organised and hence cannot be cheated easily.
They take actions against those businessmen who indulge in bad business
practices. They boycott poor quality, harmful, high-priced and counterfeit
(duplicate) goods. Therefore, the only way to survive in business is to be honest
and fair.
14. ◉ Consumer Satisfaction : Today, the consumer is the king of the market. Any
business simply cannot survive without the consumers. Therefore, the main aim
or objective of business is consumer satisfaction. If the consumer is not satisfied,
then there will be no sales and thus no profits too. Consumer will be satisfied
only if the business follows all the business ethics, and hence are highly needed.
◉ Importance of Labour : Labour, i.e. employees or workers play a very
crucial role in the success of a business. Therefore, business must use business
ethics while dealing with the employees. The business must give them proper
wages and salaries and provide them with better working conditions.
◉There must be good relations between employer and employees. The
employees must also be given proper welfare facilities.
◉ Healthy Competition : The business must use business ethics while dealing
with the competitors. They must have healthy competition with the competitors.
They must not do cut-throat competition. Similarly, they must give equal
opportunities to small-scale business. They must avoid monopoly.This is
because a monopoly is harmful to the consumers.
15. Ethics vs. Morals
Ethics Morals
Origin Greek word "ethos" meaning“
character”
Latin word "mos" meaning "custom”
What are they? The rules of conduct recognized in
respect to a particular class of
human actions or a particular group
or culture.
Principles or habits with respect to
right or wrong conduct. While morals
also prescribe dos and don'ts,
morality is ultimately a personal
compass of right and wrong.
Where do they
come from?
Social system - External Individual - Internal
Why we do it? Because society says it is the right
thing to do.
Because we believe in something
being right or wrong.
Flexibility Ethics are dependent on others for
definition. They tend to be
consistent within a certain context,
but can vary between contexts.
Usually consistent, although can
change if an individual’s beliefs
change.
Acceptability Ethics are governed by professional
and legal guidelines within a
particular time and place
Morality transcends cultural norms
16. Morals
Morals are the social, cultural and religious beliefs or values of an individual or
group which tells us what is right or wrong. They are the rules and standards
made by the society or culture which is to be followed by us while deciding
what is right. Some moral principles are:
Do not cheat
Be loyal
Be patient
Always tell the truth
Be generous
Morals refer to the beliefs what is not objectively right, but what is considered
right for any situation, so it can be said that what is morally correct may not be
objectively correct.
17. Ethical Performance
◉Ethical business performance means adhering to society’s basic rules
that define right and wrong behavior
◉Major Social challenges faced by business is to balance ethics and
economics.
◉Society wants business to be ethical and economically profitable at
the same time
Whereas
Ethics conflicts with profits,
20. Deontology Teleology
Deontology is an approach to ethics
which adheres to the theory that an
end does not justify the means
teleology is an approach to ethics that
adheres to the theory that the end
always justifies the means.
Deontology is also known as duty-
based ethics
teleology is also known as results-
oriented ethics.
Deontology adheres to the Golden
Rule which is to do unto others what
you want them to do unto you
it is also referred to as the greatest
happiness principle because it
justifies an action if it produces the
greatest happiness and least amount
of pain.
Deontology teaches to be fair and not
to use others for selfish reasons
teleology teaches about doing
whatever actions produce a result
that is agreeable to a person.
Teleology examines past experiences
in order to predict the results of a
present action
deontology follows what is morally
right based on the values that are
instilled in each person.
21. Deontological ethics
◉The term deontological comes from greek word “deon”
meaning “duty”
◉This approach is duty based, action based
approach, also called humanitarian approach.
◉ for example, the harming of some individuals
in order to help others. To the deontologist, each
person must be treated with the same level of
respect and no one should be treated as a
means to an end.
22. Teleological ethics
◉The word teleology comes from Greek ‘telos’ which means end or
purpose.
◉Teleological theories of ethics focus on the consequences
caused by an action and are often referred to as "consequentalist"
theories
◉This is an ethics approach where actions are judged morally
based upon their consequences.
◉One example of teleological ethics is ‘utilitarianism’. It states those
actions right that produces the greatest number of happiness to the
greatest number of people.
◉This is an ethics approach where actions are judged morally
based upon their consequences.
◉One example of teleological ethics is ‘utilitarianism’. It states those
actions right that produces the greatest number of happiness to the
greatest number of people.
23. Situational ethics
◉In situational ethics right and wrong depend upon the situation.
◉There are no universal, moral rules or rights. Each case is unique and
deserves a unique solution.
◉It teaches that ethical decisions should follow flexible guidelines rather
than absolute rules.
◉Since circumstances alter cases situationism holds that in practice what
in sometimes and places e call right in other times and places it can be
wrong.
◉This approach says that actions aren’t considered bad and harmful until
and unless it is performed with a wrong intension.
◉This ethics says end can justify means.
1. Misusing company time
Whether it is covering for someone who shows up late or altering a time sheet, misusing company time tops the list. This category includes knowing that one of your co-workers is conducting personal business on company time. By "personal business" the survey recognizes the difference between making cold calls to advance your freelance business and calling your spouse to find out how your sick child is doing.
2. Abusive behavior
Too many workplaces are filled with managers and supervisors who use their position and power to mistreat or disrespect others. Unfortunately, unless the situation you're in involves race, gender or ethnic origin, there is often no legal protection against abusive behavior in the workplace. To learn more, check out the Workplace Bullying Institute.
3. Employee theft
According to a recent study by Jack L. Hayes International, one out of every 40 employees in 2012 was caught stealing from their employer. Even more startling is that these employees steal on average 5.5 times more than shoplifters ($715 vs $129). Employee fraud is also on the uptick, whether its check tampering, not recording sales in order to skim, or manipulating expense reimbursements. Ethical alert: The FBI recently reported that employee theft is the fasting growing crime in the U.S. today.
4. Lying to employees
The fastest way to lose the trust of your employees is to lie to them, yet employers do it all the time. One of out every five employees report that their manager or supervisor has lied to them within the past year.
5. Violating company internet policies
Cyberslackers. Cyberloafers. These are terms used to identify people who surf the Web when they should be working. It's a huge, multi-billion-dollar problem for companies. A survey conducted recently by Salary.com found that everyday at least 64 percent of employees visit websites that have nothing to do with their work. Who would have thought that checking your Facebook page is becoming an ethical issue?
Theft
Theft at work comes in a variety of forms, and oftentimes employees do not view it as unethical behavior, believing no one gets hurt by the action. Employees take home office supplies, use business computers for personal tasks, pad expense accounts and abuse sick time or allotted personal days. Unethical behavior also includes having another employee punch a time card, or not punching out for lunch hours or other nonapproved time off. Though these may seem like minor infractions, they eventually have an impact on the bottom line of the company, which then hurts all employees. Theft also affects employee morale and is disheartening to those who choose to behave ethically.
Vendor Relationships
Businesses that buy from and sell products to other businesses are sometimes subject to unethical behavior. The practice of accepting gifts from a vendor in exchange for increased purchasing is not only unethical, it may have legal repercussions. The same can be said for offering a customer kickbacks to increase his purchasing habits. Ethics policies often contain guidelines for giving or accepting gifts with vendors or other business associates, such as a cap on the value of the gift. Other businesses strictly forbid giving gifts or any other item with monetary value. This is a safeguard to prevent any perception of unethical behavior.
Bending the Rules
Bending the rules in a business situation is often the result of a psychological stimulus. If an employee is asked to perform an unethical task by a supervisor or manager, he may do it because his allegiance to authority is greater than his need to abide by the rules. Turning the other way to avoid trouble for another employee is still unethical, even though the motivation may be empathetic. For example, knowing that a coworker is having issues outside work justifies watching him leave early each day without reporting it. Withholding information that can change an outcome also falls under the umbrella of unethical behavior, even if the perpetrator believes he is doing what is in the best interest of the business. For example, if a poor earnings report is withheld until after a stockholder meeting.
Environmental
Unethical behavior by companies, such as releasing pollutants into the air, can affect cities, towns, waterways and masses of people. Though accidents can occur, the release of harmful toxins into the environment due to lax safety standards, improper maintenance of equipment or other preventable reasons is unethical. If a business willingly continues production of a product knowing inherent environmental risks exist, it can certainly be categorized as unethical behavior.
Wages and Working Conditions
Other unethical practices include not paying workers a fair wage, employing children under the legal working age and unsafe or unsanitary working conditions. Any practices that are not in compliance with fair labor standards and federal working guidelines fall into this category.
Deontology is also referred to as duty-based ethics. It is an approach to ethics that addresses whether the motives behind certain actions are right or wrong instead of focusing on whether the results of the action are right or wrong. It is based on each individual’s duty or obligation towards each other, all living things, and the environment based on moral beliefs and values. It teaches about always acting in good faith and adheres to the Golden Rule to treat others the way you want to be treated by them.
The Ten Commandments are examples of deontology. They are moral duties that we have been taught since we were children, and we are molded by them in the way that we should treat others, to be fair and not using them to serve selfish intentions.
Teleology or consequentialism is referred to as results-oriented ethics. It focuses on the purpose of each action and whether there is an intention or meaning for the action. It deals with the consequences of an action. It involves examining past experiences in order to figure out the results of present actions. An example of which is utilitarianism which is also referred to as the greatest happiness principle. It measures how much overall pleasure can be derived from a certain action and how much pains averted.